MOVING FORWARD IN INDIA An Analysis of IKEA’s Indian Distribution Network Development

Abstract

Warehouses and distribution centers form an integral part of the supply chain. However, determining how many are needed to effectively supply a market is a complex question. This is especially true when entering a new market. IKEA has long been a company heavily focused on efficient logistics operations and is set to enter the Indian market in November 2018. This thesis identifies the main differences impacting distribution between the European and Indian market and investigates how these differences can impact IKEA’s distribution strategy in India. To conduct this case study, several in-depth interviews with IKEA personnel based in both Europe and India were conducted and their answers were contrasted to the existing literature base. Additional comparisons were also made with another interviewee from the private freight transport sector in India. The findings revealed that while there are similarities between the European and Indian market in terms of geographical size, potential local sourcing and ownership structure, there are significant differences in terms of available infrastructure, land acquisition, and state legislations. The result is that deliveries in India are much less reliable from a time standpoint which would suggest the need to pursue a decentralized distribution strategy.