Mexico Greenfield Venture

Mexico Greenfield Venture

AB220: Global Business

Danielle David

02/18/2012

IKEA is a Swedish furniture manufacturer, which has invented a new idea of building reasonably priced furniture. They have now wanted to launch a new line of Green homes for young married couples as a Greenfield venture. These homes would be 350 sq. ft. - 420 sq. ft. that comes with a bedroom, bath, kitchen and living room. Larger units will have the option of an infant room or small extra bedroom. The homes are made of straw; are fireproof and can resist a hurricane they are reasonably priced 4,000 for the smaller units and 6,000 for the bigger units. They will come with an assembly plan and roof top solar panels. Windows and doors are the only thing not included besides furniture which can be purchased separately. IKEA is having a hard time deciding where they should launch this new Greenfield venture either India or Mexico, I think that Mexico would be the best option.

One reason I think this Greenfield venture would fit Mexico best is because of their way of lifestyle, its family oriented but small family oriented. Mexican families are for the most part the husband, wife, and children, usually the household sizes are smaller than that of the Indian families, their families are larger and all live under one roof. “The family usually consists of the man, his wife, their kids, the man's parents and unmarried sisters, if any. The man has to necessarily make his parents live with him and has to look after them” (http://family.jrank.org/pages/1164). The size of these homes would not be practical for families in India there would not be enough room, and the overcrowding would make for a very unhappy lifestyle.

Another reason why I think Mexico would be a better location then India is because Mexico’s economy and population is nothing compared to India. Bringing this new venture to Mexico would not only help raise the economy, housing, prices, but the unemployment rate as well....