How would you describe the structure of the Swedish furniture industry in the 1950s? What were the implications for the cost structure and customer responsiveness of the typical Swedish furniture manufacturer and retailer? Was a similar structure evident in other countries as well? How did IKEA try to exploit this?

IKEA is one of the world’s most successful global retailers. In 2007, IKEA had 300 home furnishing superstores in 35 countries and was visited by some 583 million shoppers. IKEA’s low-priced, elegantly designed merchandise, displayed in large warehouse stores, generated sales of €21.2 billion in 2008, up from €4.4 billion in 1994. Although the privately held company refuses to publish figures on profitability, its net profit margins were rumored to be approximately 10%, high for a retailer. The founder, Ingvar Kamprad, now in his 80s but still an active “advisor” to the company, is rumored to be one of the world’s richest men.