Sounds + Food 'n' Retail

I've included just the top-25 and annotated their focus. What's interesting, but not surprising, is that the majority of companies in that list are not independent horeca-orientated, apart from two: Hennie van der Most and Sjoerd Kooistra, both Dutch horeca-entrepreneurs.

The majority is hotel-chains, though the top-10 is quite diverse; a number of convenience-(fast)food places, resorts, as well as retailers. Interesting that both Ikea and Hema are on that list. Hema, as far as I know, has not been on the horeca-market for long (no revenue reported in 2006), but is already reaping significant successes. Probably my favourite retailer in the Netherlands, btw. Ikea, as I reported before, has been in the restaurant-business since 1971.



You can see the complete top-100 at Misset Horeca.

Hey, a little busy at the moment, but here's some links, I've enjoyed recently.

• Jim Donald's, former Starbucks' CEO, month by Patricia Sellers (Fortune): After listening to an interview with Frank Addante on Venture Voice, where he said "Time is a finite asset!", I looked up "time-management CEO" on Google, and this is the first thing I found. Some good tips on meetings, getting up at 6, and generally managing your time.


• Monocle design-notes by Dan Hill: I printed this 32-page (!) document out this morning, and it will probably take me a few days to digest it, but I'm already enjoying the first few pages, where he writes about the vision behind Monocle as a mag. and as an internet-publication and how the multi-disciplinary team reflected this.


• 10 Ways to Improve Your Programming Productivity by Matt Moore: I love productivity-stuff, and think most of these tips apply to any activity really.


• The 7th Deadly Claim — “Best Value” by Jeff Sexton (Future Now): "The problem for most companies is that they don’t do BOTH well: Either they don’t do enough to persuade customers of the product’s value, or they price their high-quality item even higher than what they’ve been able to substantiate to the market."


• How Facebook Is Like Ikea by Tim Harford (Slate): Considering I wrote about something related a few months ago…

Just some finishing up on the IKEA-book. Following graph describes the structure of IKEA's business, as far as I understand it.

1: Stores - The way the company expands horizontally, is through a tightly controlled franchising system. This both saves costs and minimises international risks.
2: Sales & service - the company is tightly integrates its sales- and service-operations with customers, the latter taking over 80% of the work (and loving it). Huge cost-savings, also benefiting customers.
3: Supply, manufacturing, design - The company is equally well-integrated back up the value chain, with suppliers, manufacturing, and design, and has—since the 90s—been expanding its operations in that direction. Some cost-savings by introducing savings up the logistics-chain, and more flexibility in manufacturing.
4: Management structure - non-public virtual entity that licenses the IKEA brand and is able to offset international tax-differences by being located in Belgium/the Netherlands and changing the terms of licensing-agreement as needed.

You can draw your own conclusions from that, together with what I've written before.

Things that stuck out from the book included:

• Ingvar Kamprad, the founder, who has both a trader's mentality and is at the same time a community-person;


• Sweden, IKEA's country of origin, whose restrictive tax policies actually resulted in pushing the business to become a global company;


• IKEA's cost-philosophy, which is very frugal and part of the company-culture, and also transmitted to the supply side and to customers. Some problems retaining top-employees as wages are not competitive;


• Its franchising-system, which somewhat surprised me, can be explained by the scientific way in which IKEA's operations has been built up. The more rational, the "easier" (a relative term) to replicate. It's also in line with the business's rapid global expansion and its drive to push down costs;


• It's a private company, which makes it less visible and (relatively) less accountable to the public.


• Its vertical integration with suppliers and customers, enabling it to quickly respond to new trends and problems, as well as introduce higher cost-savings than its competition.

I'm glad to get this out of my life. It is probably the last bit of procrastination left over from the period spent writing my thesis. Following is a continuation of my coverage of IKEA's growth as a business, which I began, in a wordy fashion, by looking at the Scandinavian years. I decided to shorten that somewhat, as really the book (if you can read it) already does a great job of describing IKEA, though my version is perhaps easier to digest.

1961 - Already when Ingvar Kamprad started trading, he had formed relationships with suppliers from abroad. He employed this strategy also when he launched IKEA, forming relationships with Polish and other Eastern European suppliers, which gave him a drastic price-advantage over his competitors.

1973 ca. - After the incubation-time in Scandinavia, Switzerland was the first country, that IKEA expanded too. Reasons included its neutrality, a healthy economy, low taxes, and a greater entrepreneurial spirit.

1973 ca. - When the Kamprad family left Sweden, they founded several foundations in the Netherlands, Switserland, Panama, and the Dutch Antilles.

1974 onwards - Expansion in Germany, Munich (one of the wealthiest cities in DE). The store was a great success, and Germany is still a pillar of profitability for IKEA today.

1975 - first stores opened in Australia, Honk-kong, and Canada, through franchising. In 1980, IKEA took over the Canada-chains, as those were not being run well.

1978 - First store in the Netherlands. It did not go well at all, due to a lagging marketing-campaign. Only in 1982 onwards did IKEA book successes with the Dutch. 1994 started a huge boom of expansions in the Netherlands (more detail was provided about Dutch branches, because the book was Dutch). Belgium also saw stores after 1978.

1982 - IKEA set up Stichting INGKA Foundation in the Netherlands, which was Kamprad's way of keeping IKEA for IKEA instead of having to give it away after he died. It was in charge of IKEA from then on.

1983-4 - stores in Gran Granaria, Tenerife, and Saudi-Arabia.

1984 - IKEA starts "IKEA Family" loyalty program for customers and also introduces its first luxury furniture product-lines.

1985 - first store in USA and kept expanding. Famously (I read at least 1 case-study about it) there was some teething-trouble at the beginning and it took a while for IKEA to find the correct formula for the US market.

1986 - 60-year old Kamprad steps back as CEO and gives reigns away to 35-year old Anders Moberg.

1989 - the fall of the Berlin wall. The roughly 500 suppliers that IKEA had been working with in the Eastern block, suddenly found their economic situation drastically change and prices started to go up. Out of loyalty, IKEA vowed to pay up to 40% of the price-increases for its Polish partners.

1991 - the Eastern European crisis lead to a strategy-change. IKEA became a producer of furniture. Due to its long-lasting relationship and involvement with suppliers, it possessed the necessary know-how, and becoming a producer would also have positive effects on its flexibility. IKEA could focus on Just-in-Time production to overcome the production-problems it had had in the past. In 1991, it took over a Swedish producer of wood-products, and after the privatisation of the Polish furniture-industry, IKEA took over three companies there in 1992 as well. This became part of a trend and every-time it had the chance, it would take over a supplier in Eastern Europe.

1991 onwards - also saw an IKEA expansion of stores in Eastern-Europe.

1992 - IKEA took over Habitat, a British retailer of furniture, that had previously caused a style-revolution in Britain. Until now, IKEA had not expanded to the UK, and it was assumed that it was Habitat's strength that was keeping it at bay. It was forced to sell, after expanding to France, Germany, and Spain, which had caused it to make huge losses. IKEA also used its presence in those countries as launch-pads, keeping Habitat as a separate brand.

1998 - China! Already having been a supplier of IKEA's since the 70s, and generally believed to be a huge opening market, IKEA opens its first store in Shanghai, through a joint venture with a Chinese firms. It was an exploratory step as the Chinese were not yet economically ready for the type of products the IKEA offered, though the assumption was that China's economy would grow 10% per year. IKEA wasn't competing on price either, basically being more expensive than any local competitor. Only after severe price-drops, did the business take off.

2000 - Russia. The company had already had talks in 1988 to open for business there, however the collapse of the Russian empire delayed that. Finally, based in part on Kamprad's gut-feeling, the decision was made. It was a good one. In year 2, the annual revenue was $260 million, making it one of the most successful expansions ever. 45,000 people applied to 600 vacancies in the first store. Due to high import-taxes of 28%, the decision was also made to start producing furniture locally also.

And everything else… is history.

Note that, as I used a single source for this time-line, a Dutch/German book on IKEA's 11 secrets, this blogpost cannot be taken as an ultimate authority on IKEA's growth-strategies. At the very least, I got some dates wrong.

Final thoughts
In my first post about IKEA's growth, I wanted to make clear that how a business expands is largely related to its origins. The relationship with Eastern-Europe is both due to a cultural proximity with that region, as well as Ingvar Kamprad's drive to lower costs. Germanic countries were also a logical step because of linguistic, and hence cultural similarities, as well as similar economic conditions.

Territories with which it was as yet unfamiliar, were being expanded into in a risk-reducing fashion, through franchising in Canada, China, and Australia, and later on in China, through joint ventures also. The acquisition of Habitat in the UK, could be perceived as a risk-reducing move also.

It is generally recognised that European firms are better at managing international expansion, simply because of the compressed experiences they get from growing in heterogeneous Europe, which makes them more flexible in other countries also. Still, you could see that certain culturally remote countries posed some difficulties, such as the US and China, and even the campaigns in Germany and the Netherlands did not proceed flawlessly.

All that aside, to me the most interesting part of all of this was IKEA's shift in strategy in the 90s, turning from being a retail-outlet to a producer-retailer hybrid. It is both a radical shift, but from what I understand, a very logical one.

That's it. Tomorrow, I'll publish some notes about the biggest pros and cons about IKEA's business.

The picture is a mash-up of the Evolution 101 podcast logo and IKEA's logo.

So, I finally finished the book on IKEA, which, sadly, is NOT yet available in English, though there are other choices + I seem to remember reading that it will be released soon.

In any case, a great book, which taught me a lot about the mentality that reigns inside IKEA, how logistics are organised, what determines design, what determines price, how people are managed, and… the most boring/interesting part: how IKEA evades taxes. That last one is really worth a read… they basically designed a complex financial structure, which enables them to offset tax-differences in various countries. As you may know the tax-levels in Sweden, its country of origin, are somewhat insane and have marked the company in a way that the Swedes probably didn't intend.

So what to do next. I'm a strong believer in making things actionable, vs. the passive digestion (& forgetting) of facts, and, in order to make this book useful, I need to do something about it. I previously thought about writing about the way that IKEA expanded internationally, as that sheds some insight into cultural differences of countries and the considerations a business has to make when launching there. It's also relevant IF you care about how the origins of a business determine where and how it will grow. I may still do that, but since it's a lot of work, I'll do it in note-form.

Something will probably come out of it. You can read about my previous coverage of IKEA here.

Next book: The Disney Way
While IKEA taught me about retail (and some extras), I'm hoping to learn more about how to organise entertainment. As I wrote a few days ago, a strong theme in my life is how to tell stories, in whatever form, but there is a whole process behind that and, while I have a rough view of what that is, I'm hoping that the Disney book has some practical tips.

I'll probably supplement this with The Toyota Way at some point, as I have a certain fascination for supply-chain management also.

Yes, yes, I read entirely too much…

FYI, previous book-reviews include:

• eBay's "The Perfect Store"
• McDonalds "Grinding It Out" here and here
• Starbucks' "Pour Your Heart Into It" here and here.

• the War of Art, a mid-book review

Every now and again, you come across something that changes the colour of your perception, that allows you to see the world in different ways. One such moment happened after reading a chapter in the IKEA-book, I wrote about before (1 & 2), on how the customer is deeply involved in the logistical process and the effects and cause of it.

As you may, or may not know, when you shop at IKEA, you generally go into the store, choose the furniture you want, pick up the already-boxed version of that item, put it in a cart, pay, drive home, and assemble it with some tools that are in the box. All-together, the customer at IKEA does 80% of the work related to sales.

I had read, in my bachelor, I think, that the reason that IKEA introduced this system was because of when it first opened its store, there was such a mass of people that their staff couldn't handle it, and that they then just decided to let the mob do all that stuff. I thought that the reason that system remained was cost-saving; I mean, how cheap is that to let customers do all that work for themselves, right? Well, that's definitely a reason, but only part of the story.

The other part is the effect it had on customers. Because you always ask yourself, why would someone go through that, when they can just pay the store a little extra for the transport and the assembly? And that's where it gets interesting.

To start, IKEA, even though it offers low-cost goods, is well-positioned for the middle-class market. The stores are outside the city, and pretty much all their customers have cars, which they can use to transport the furniture back home. I'm not 100% sure if this was by design or a consequence of other factors. But at the very least, the conditions for making the customer part of the logistics process are in place. Still, you kind of wonder. Aren't these exactly the people that could afford a little extra service?

The explanation is culture. Western culture, you could argue, has seen a shift towards individualism. People are over-informed, over-serviced, over-indulged. Sales-clerks and waiters can't wait to throw themselves at you and ask you if you're happy, if you want another…, and another, and another. It's exhausting, both for the store and for the clients.

In comes this place, which tells you, very Scandinavian, here… go do it yourself. Like a party, where you can mix your own cocktails. Where you control what goes in and what comes out. And most of all, where you get the feeling that you are part of a productive ecosystem. It's the good kind of stress.

The book quotes some sociologists, Robert Jungk and Ivan Illich, according to whom, a society which receives too many services, where every screw has a handyman, is a broken society. Services, they say, destroy activities. For every small chore, you can call an expert and let them do work that you actually do yourself. On a larger scale, services destroy the entrepreneurial drive. Also Thomas Düllo, according to whom, we live in a world of indirectness, and because of this, it's very exciting to be asked to do something. A French student was also quoted, calling IKEA: "Lego for Adults."

And there are definitely signs that suggest that society wants to move into another direction: open source, Wikipedia, Make-magazine, do-it-yourself, self-help, etc. Probably even blogging. A collection of niches to be sure, but growing ones.

Ever since reading that chapter, I sit in restaurants, stores, etc. and wonder how this principle can be worked into their or other businesses. For instance, is the take-away coffee part of it, or McDonalds' policy of throw-it-away-yourself, or Amazon. All of these "features" cause both a downward-shift in the bottom-line of "service" businesses, but they also remove the "service." And these businesses are unarguably booming too.

But I also wonder which services can be removed, and which shouldn't. More on that when I have the answer. Or perhaps you have it yourself? Let me know in the comments.

The picture is courtesy of Marco.org

This is part I of my coverage on IKEA's growth, based on my reading of the book "The 11 secrets of IKEA" (more on this at the end of this article). You can read a previous blogpost on IKEA's "strange alien values" here. I'll continue this series as follows. Starting with Scandinavia, I'll go into how Ikea grew in this area. I'll then continue with Europe, and finally finish with the giants, the USA, China, and Russia.

Some years ago, I worked on a project where we would try to find out how businesses expanded internationally. In this case, we looked at the tire-industry, and three companies, Bridgestone, Goodyear, and Michelin, and dug through tons of annual reports and news-releases to understand where, when, how, and why these companies expanded beyond their national borders.

The reasons these three companies make such an excellent case-study, is that they all originated from different continents and thus reflect different cultures. It is nearly an unwritten rule that US-companies perceive the world as a single market and make little effort to adapt to local conditions; that Japanese companies are very hierarchical in their structure; and that European companies, as a consequence of the cocktail that is Europe, internationalise quite quickly (or not at all). And for all international activities, it is another soft rule that they would expand to countries with some cultural, legal, and linguistic similarities first.

IKEA is of course a European firm, or rather, a Swedish one, and a preliminary conclusion would be that it would internationalise quite quickly also, yet starting in Scandinavia, then the rest of Europe, then the world. Another assumption would be that it would thread carefully (read: slowly or not at all) in areas which reflected alien values (to IKEA). As will be shown, this did indeed happen.

Ingvar Kamprad and Sweden
A business usually has different components, many of which reflect the values of the founder, and again the values of the society he or she grows up in. IKEA's founder, Ingvar Kamprad, was born in 1926, on a small farm in Sweden. He respected the feeling of community he experienced there. His grandmother, who had migrated from Germany at the end of the 19th century, taught him the value of hard work and encouraged his entrepreneurial spirit.

Ingvar Kamprad had started IKEA as an import-export business, and much of the way IKEA would be run would reflect that idea. When you're a trader, the idea is that the product doesn't matter and to be as efficient as possible (a modern-day example: eBay). In order to save costs, IKEA tried to get preferential treatment with its suppliers, started with selling products via mail-order, and ultimately set up a storefront, which was actually just a warehouse.

Of course, Sweden itself, with its strong socialist values, had a large degree of influence in the way IKEA took shape. Internally, the business was run quite informally, and in many ways reflected the communal environment where Ingvar Kamprad had grown up in. Similarly, the business of IKEA was not meant to be elitist, rather aimed at middle-class families, a large component of Swedish society. Sweden also had a long tradition in furniture and design and that was another influential factor.

IKEA
IKEA was set up in 1943, already a successful mail-order business, and soon after Kamprad would start a business-degree to learn the theory of distribution. After some years of studying, working for other businesses, and finally military service, IKEA's first employee was hired in 1948. This was also the year that Kamprad decided he wanted to make IKEA big and to that effect, started a folder-campaign via a regional newspaper.

The competition in this business was tough, however, plenty of mail-order-businesses in Sweden, and the competitive landscape orientated itself around lowering prices. A natural consequence was that the quality of products also went down. Because Kamprad was made aware of this through countless letters from customers, he came up with the idea of having customers check the products themselves, which is how IKEA, the store, was born.

Two features were important here, one was that the primary way to order was still the catalogue, and the store a complementary service. And two, the self-assembled furniture, which grew out of the need to ship products more safely. This also brought a new degree of involvement by IKEA with their suppliers, essentially bringing innovation upstream, which help suppliers to save costs, and downstream, as self-assembly became a large cost-saver for customers also.

At the same time, IKEA's new retail-focus brought in a new level of competition, that of other furniture-retailers. Afraid of the popular and far cheaper business-model of Kamprad's, and angry at the obvious copying of designs that IKEA was doing also, these retailers started pressuring local suppliers to no longer work with IKEA. This forced Kamprad to use some questionable business-practices, such as starting anonymous daughter-companies to deal with these suppliers, amongst others. In the end, it also lead to him to having to look abroad for new suppliers, which I will write more extensively about in following blogposts.

Noteworthy was that before expanding to the Swedish capital, Stockholm, IKEA had already opened an outlet in Oslo, Norway's capital, in 1963. Two years later, the first IKEA was opened in Stockholm, which turned out to be a massive success. IKEA was well-fitted for the times also. The Swedish socialist government had implemented an ambitious plan for urbanisation, which involved building a million houses between 1965 - 75. Since IKEA was well-able to meet the booming demand for cheap furniture, this was a match made in heaven.

In 1971, IKEA unleashed another innovation. A restaurant, which served food to the clientele at affordable prices. This was another way for IKEA to become a lifestyle-trendsetter, and also started the urban legend that meatballs were Swedish (IKEA's recipe was actually British).

Scandinavia
While IKEA was already established in Norway, and had suppliers in Denmark, it opened its first retail outlet there also, in 1969. Towards the end of the 70s, there were altogether 6 different IKEA-stores in the rest of Scandinavia. All of which were personally owned by Ingvar Kamprad.

It was not long after, 1973, that he and his family also moved to Denmark, to flee the insane taxation-system in Sweden, which I explained in my last post.

Final thoughts
Clearly, much of what made IKEA successful world-wide, started with innovations introduced in Sweden. IKEA's mail-order- and warehouse-model, its close integration with suppliers, its focus on providing cheap lifestyle products, and also its internal frugality—which I did not speak of, but IKEA-employees are traditionally paid below market-value. All of which fits with my philosophy of "where you are from and when you are from matters a great deal to where you are going."

IKEA's international expansion started with Scandinavia, which was a region with a lot of cultural similarities to Sweden. As I will explain later, this is a trend that would continue in Europe also. At the same time, the reason that IKEA expanded internationally, could also in large part be explained by the competitive pressures inland—IKEA's troublesome relationship with Swedish suppliers—and with the socialist regime, which was largely incompatible with running a profitable business, and forced Ingvar Kamprad to look elsewhere for a more business-friendly environment. This was also the philosophy, when expanding into Europe, which I describe in a future post.

All in all, IKEA makes an interesting case-study, because it is a European business, and it is interesting to see which of its values were compatible with other countries and which countries presented more difficulty and why. Much more on this in future posts.

The book "The 11 secrets of IKEA" is sadly not available in English. If you do read Dutch, I do recommend picking the book up here, and for German, check the German Amazon-store here. For other book-reviews, check out my look at eBay's "The Perfect Store" here, McDonalds "Grinding It Out" here and here, as well as at Starbucks' "Pour Your Heart Into It" here and here. The picture is courtesy of Culinaryartsblog.com

The five-forces model, as developed by Micheal E. Porter, illustrates the biggest factors that may enter into the strategic decision-making process. These are, on a vertical level, suppliers and customers, on a horizontal level, competition from products, new entrants (can also be vertical), and rivals.

To explain the horizontal/vertical, often when you talk of horizontal, you mean companies and products that are on the same level as you, competing for the attention of the same customers (and suppliers). Vertical relationships are those which a company depends on, either their relationship with suppliers or their relationship with customers. Each of these also operates on their own horizontal axis. The more powerful players on that level become, the more they can affect players on the other levels.

There are different levels of importance per force, depending on the context and type of the firm. When a company is more powerful horizontally, a market-leader, even a monopolist, it does not have to worry about suppliers as much, and is perhaps able, financially, to integrate vertically, taking over some of its suppliers and/or some of the middle-men that stand between the company and its customers. Vertical integration can be important when you want to control the supply chain for some reason, e.g. to increase the level of quality of your products. It can also become important if competition on your horizontal axis is threatening or may become so in the future.

3 examples
You can see this play out in a number of retail-situations. Apple, which is strictly focussed on design and marketing, outsources the manufacturing of most of its products, but is fairly vertically orientated towards the customer-side, doing most of its business in its retail-locations and online stores. Because of this concentration of power in the middle and proximity to the customer, it also has more power over its suppliers, able to make strong demands, and it's also better equipped to compete with horizontal players like HP or Sony, who are not as vertically integrated towards the consumer. The added benefit of a close customer-presence is also that you can use this as an opportunity to create customer-focussed products, something a lot of non-verticallly integrated players are not so good at.

Another fascinating company is Amazon, who spotted an opportunity to surpass brick & mortar stores, by becoming a distributor with a web-based store-front. Traditionally, the book-industry was organised as follows. A book gets printed, it then gets distributed, it then lands in a store, and then the customer buys it. Amazon integrated three of these functions: distribution, store, and customers (four, if you include ebooks into the formula). The end-result was that the customer became empowered: he could review books, even sell books second-hand. Which disempowered other stores where this was not possible, and publishers, who were before able to simply push out best-sellers downstream. Publishers are still powerful of course, essentially acting as a gatekeeper to writers, but this will change as soon as online publishing can be consumed comfortably.

A final example is Ikea, which is surprisingly similar to Amazon. It also started as a distributor, back in the day when a store-front was a newspaper-advert and phone-line. Ikea saved money, by working closely together with manufacturers in Poland, even building and buying machinery for them. The end-result were standardised designs, at low costs, and produced on a massive scale. It became close to the customer, by using its warehouses as store-fronts, and enabling customers to buy via catalogue and later via the web-site. Its competition was the traditional furniture store, conservative and producing designs that were both expensive and focussed on exclusivity (which translates to small-scale production). Because of this perceived strength, they were arrogant enough to not worry so much about prices on the vertical axis, both from their suppliers and for their customers. All of which could be exploited by some frugal and out-of-the-box thinking (a combo which fits surprisingly well together).

These are all three examples of durable goods. If you get into food however, even restaurants, the formula changes. But that is a story for another day.

Be a thief
Isn't 5-forces fun? I think so. So what can we learn from this? For one, that it's important to consider strategy on multiple axes. How will a business deal with its suppliers, its customers, its competition?

Also, it is actually a weakness to be too vertically or horizontally integrated, as that creates a certain arrogance and/or passivity towards how you deal with these parties. New entrants will eventually come, and probably on a different axis all-together. Being too integrated, means that the business has many dependancies, which will make it all that more slower to react to changes.

What I think always pays off, is to be close to customers. By constantly adjusting your strategy, so that the value proposition for customers is increased and personalised for them, you ensure a certain loyalty (which gives you time to change) and you can sense it sooner when their attention drifts towards other types of products.

A final thought. Business is very much an art-form and in art there is one great saying: "Good artists copy, great artist steal." The copying refers to that everything has been done to a degree. People have sold computers, books, furniture, and those products are clearly fulfilling a demand, which, for now, continues to exist. Where people can innovate is in creating new combinations of things. In other words, if you copy a competitor's business-model, you gain only the part of the market that does not already get served by the existing business-model.

If instead you steal the good parts from other business models, and create your own combinations of these good things, you can create greater value-propositions for customers than already exist. This applies just as much to combinations of five forces, as it does for anything else.

As has become my custom, during my brief life as a blogger, I like to review books, while reading them, not necessarily after I'm finished. The book, I'm currently reading, is aptly titled "Ikea - The Secret of Its Success," a Dutch translation of a German biography of the business and its founder, Ingvar Kamprad. I've until now read very little in terms of European business, and looked forward to getting a grasp on the European mentality if there is such a thing. To be honest, there are vast cultural differences between countries in Europe, though Ikea's continental growth does serve as an interesting lens to understand some of the issues at play.

My initial thought when meeting people and businesses is that where you are from and when you are from matters a great deal to where you are going. There are a great number of social values that come from living in a given location, at a given time. Similarly, Ikea has had a particular past, which I think define the company and explain its goals.

Where Ikea's from, Sweden, is a strange, alien place to me, even more so, 80 odd years ago, when Ingvar Kamprad, Ikea's founder was born, and 60 years ago, when he founded the company. Painfully, I notice that my own business-education has been coloured by "Western" values, or rather Anglo-saxon capitalist ones, which give (the illusion that) individuals (have) pretty much free reign to reach their dreams, and Ingvar's story is very different from that (though he did achieve his dream, I think).

Briefly, before I describe Ikea's history, what is different about the company, as opposed to other multinationals?

• It is still a private company
• It thinks like a community, which has major consequences on work-relations and innovation
• Work-relations: historically, wages are kept low, workers are treated like family, there are no large power-differentials, and I don't think people get fired much.
• Innovation: the way the business develops often comes out of collaborative thinking—how can we make life easier for our workers, how can we make life easier for our customers? Very organic, pragmatic, and frugal!