As shown above, there is a lack of brand strength in the Latin American furnishing market. This is turn shows that somewhat easy for new businesses to enter the market. Examples of such business however, are those well established diversified retailers, such as supermarkets and department stores entering the market.
Advantages for retailers occur within the market on a small scale with either one or several outlets, for which fixed costs and entrance barriers are fairly low.
However, the impact of the current global economic recession on the retail environment can discourage the entrance of new furniture businesses into the high-street in the medium term. There is however little government regulation which only concentrates on health and safety of the products. Overall, Datamonitor (2009) sees that the threat of new entrants to the furniture market in South America is considered to be strong. It is therefore important that establishes its presence in the region before other multinational companies decide to enter the South American. By being a entering such region, IKEA can be as successful as Telefonica has been since 1990 (Griffin and Pustay, 2009). It can generate more sources of revenue as well as establishing new customer base before competitors.
Read more: http://www.ukessays.com/essays/marketing/a-case-study-ikea-in-brazil-marketing-essay.php#ixzz3ylIRHXHl