Disruptions to business sectors don’t happen overnight

Full disruptions to business sectors don’t happen overnight. The writing is usually on the wall. https://t.co/SRIsv02YwB

— Harvard Business Review (@HarvardBiz) July 25, 2022

Thank God for Ikea. It’s like a benevolent force with some sort of silent hand behind every aspect of the company.

But Ikea could have been a restaurant, like McDonald’s, had Ikea been a business that attempted to expand rapidly over the past 15 years.

Its business model is based on high-volume, low-cost sourcing, and on taking advantage of economies of scale by offering standard quality at affordable prices. And Ikea has done that. It has stores in more than a dozen countries and an annual turnover of a trillion dollars.

But Ikea’s business model has been severely shaken by what happened in Sweden in 2016, when one of Ikea’s most popular products, its textiles and curtains, were recalled from stores because of a fire risk.

That is a problem, because now it’s no longer possible to buy curtains or textile products from Ikea without buying another Ikea product first. In December 2016, Ikea set up showrooms where customers can buy alternative products. At the end of 2017, it opened a similar concept store in Toronto, and another one in Brooklyn last year.

Today, the threat of shutdowns is again circling the corner. Last week, the last stores closed in the Swedish town of Blomberg. In Switzerland, another 75 stores are on the brink of shutting.

And in Denmark, there is talk of a national referendum on Ikea leaving the country, after a Danish commission said it had failed to produce quality goods at affordable prices.