The Absence of IKEA - A Study into the South African Furniture Market

Abstract:  Title: The Absence of IKEA - A Study into the South African Furniture Market  Research questions:- Is the South African furniture market favourable for IKEA? - Would it be beneficial for IKEA to have production there? - How could IKEA promote itself if they were going to enter the South African market? Purpose of the research: The purpose of the paper is to identify possible opportunities and threats for IKEA in the South African furniture market by describing the market from a furniture company’s perspective. The paper will also point out strengths and weaknesses on the South African market that can be helpful for Swedish furniture firms that are interested in establishing business in South Africa. Methodology:Different method approaches were used including; observations, a survey among consumers and interviews with the Swedish Trade Council, a marketer and furniture companies. The information gathered through these approaches was complemented with previously published data. Conclusion:It was discovered that the investment climate in South Africa is favourable and that there is a market for IKEA. However, considering the current condition of the market, we argue that the market is not favourable enough from a manufacturing perspective and therefore not beneficial for IKEA to set up production. The biggest threat identified is the furniture store Mr Price because of its similar concept. To begin with IKEA should focus on brand building followed by in store marketing. Keywords:South Africa, IKEA, Market analysis, External analysis, Marketing mix, South African furniture market, Black Diamond.