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Bill Brown

A complicated man.

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Since IKEA is opening its first store in Phoenix soon, it’s worthwhile to understand the retailing giant better. This recent article (and its similarly lengthy follow up) does a grand job of covering that subject.

Some interesting tidbits:<ul><li>The origin of flatpack: “At which point he uttered the 12 words that would come to transform a culture: ‘Oh God, then, let’s pull off the legs and put them underneath.’”</li><li>It’s pervasiveness and impact: “It has been calculated that 10% of Europeans currently alive were conceived in one of Ikea’s beds.”</li><li>On the catalog shooting logistics: “Just next to the studios, there are whole rooms filled with props to enhance this effect: thousands of entirely green books, entirely red books and entirely blue books - so that even the bookshelves match perfectly with the rugs and the covers of the sofa-beds.”</li><li>IKEA as religion: “Like at least one other major world religion, Ikea began in a shed.”</li><li>On the costcutting measures: “During the 1990s, the company is said to have marketed one line of picture-frames made entirely out of rubber offcuts from a Volvo factory.”</li><li>On the founder’s vision: “By the time [founder Ingvar] Kamprad wrote The Testament of a Furniture Dealer, his vision had grown more precise, more evangelical, and, you might argue, a fair bit more anally retentive. ‘You can do so much in 10 minutes’ time,’ he declared. ‘10 minutes, once gone, are gone for good … Divide your life into 10-minute units, and sacrifice as few of them as possible in meaningless activity.’”</li><li>On the business structure to avoid Sweden’s oppressive taxation: “Kamprad set about creating a business structure of arcane complexity and secrecy. Today, therefore, The Ikea Group is ultimately owned by the Stichting Ingka Foundation, a charitable trust based in the Netherlands. A separate company, Inter Ikea Systems, owns Ikea’s intellectual property—its concept, its trademark, its product designs. In a labyrinthine arrangement, Inter Ikea Systems then makes franchise deals with The Ikea Group, allowing it to manufacture and sell products.”</li><li>Being inexpensive doesn’t sacrifice profits: “… between 17% and 18% of the price of the average Ikea product is pure profit.”</li></ul>It’s an interesting antipode to Wal-Mart on many levels, though each company reflected the quirks and personality of its founders.