IKEA's Shrewd & Secretive Ascent to the Top

IKEA's Shrewd & Secretive Ascent to the Top

Sarah Coffey
Feb 28, 2011

IKEA, how do I love thee? Let me count the ways... you're affordable, accessible, and you look good. So what if visiting you can bring on a panic attack, assembling your furniture is a tooth-and-nail struggle, and you tend to fall apart after one or two apartment moves? Steadily growing sales indicate that most of us are willing to accept the shortcomings of our favorite Swedish megastore, but the Economist reveals that IKEA could be hiding a few things…

THE GOOD
IKEA has mastered the art of flat-packing, saving money and energy and passing the benefits on to the consumer. It's popular — particularly among Europeans, who make up 80% of its sales (with Germans buying the most, accounting for 15%). It's affordable, and it has a reputation for progressive employment practices — 40% of its top 200 managers are female.

THE BAD
In the Economist's words, "behind IKEA's clean image is a firm that is very Swedish, secretive by instinct and, some say, rigidly hierarchical." Ingvar Kamprad, IKEA's founder, made a public apology for supporting a Swedish facist group in the 1940s, after evidence of his involvement was discovered in the 1990s. The company has been called out for corruption in Asia (where it was accused of using child labor), Russia (where senior executives allegedly accepted bribes), and Europe (where it has been criticized for using private holding companies to avoid paying higher taxes).

THE REST
For the Economist's take on how IKEA's "lean operations, shrewd tax planning and tight control" have played out in the international marketpalce, read the full article:

The Secret of IKEA's Success | The Economist

Photo: IKEA Kouhoku by Flickr member midorisyu used under Creative Commons License 2.0

Created with Sketch.