International investments : A location analysis of India

Abstract: This degree project is written on assignment for IKEA in order to develop knowledge about India as an investment country and recommend which states in India have the most potential for a future investment. Further, we will examine which kind of knowledge approach that is best suited for a foreign investment decision. The degree project will treat the subject internationalization and establishment in foreign countries. Companies are becoming more and more globalized and the competitive advantages tend to shift from large companies with extensive knowledge and experience to companies with unique insights and knowledge. This means that in order to succeed in the internationalization process, a firm must create knowledge about the foreign country. There exist various theories within the internationalization research, but the most prominent models are the Innovation-relation model (I-model) and the internationalization process model (IPmodel). We have used qualitative interviews and interviewed respondents from IKEA Sweden, IKEA India, IKEA suppliers, Ericsson, Sandvik and the Swedish export council in India and further a short questionnaire have been used in order to reach the result. The result has shown that the states that have the best investment climate, according to our empirical data, are Andhra Pradesh, Gujarat, Maharashtra and Tamil Nadu. Further the result will show the need to use both experienced based as well as objective knowledge to be able to make an as cost-efficient investment as possible.