Tale of two traders

Under the appropriate theme of Northern Light, the heads of two of Sweden’s biggest and best-known retailers took centre-stage to shed a little light on the success of their businesses.

For Ikea, group president Anders Dahlvig outlined the thinking and philosophy behind the furniture and furnishing group’s international growth. And Kenneth Bengtsson, president and CEO of supermarket operator ICA, explained how a co-operative approach has established ICA as “the leading Nordic retailer”.

While ICA’s heartland remains the Baltic states, fellow Swedish retailer Ikea has cultivated its brand and style throughout Europe and beyond.  Dahlvig described the growth of the business – 200 stores in 24 countries, 35 factories in nine countries, 1,300 suppliers in 53 countries, 95,000 coworkers and annual sales of 314.6bn.  “There is nothing wrong with businesses creating wealth for owners and managers, but there has to be more to it than that,” he said.  Ikea had created a “real point of difference” early on and had maintained it.

In fact, Ikea had established numerous points of difference from its traditional competitors – with big, modern, out-of-town stores offering low-priced, flat pack products in a self-service environment, promoted through its catalogues.

Dahlvig listed five competitive advantages:

• design, function and quality at low prices
• Scandinavian design
• inspiration, ideas and solutions
• everything in one place
• “a day out”.

“But most important of all,” he added, “is the fact that we have credibility because we are seen to deliver on what we say.  We’re a company with heart and soul.

”ICA’s growth – with 2,300 stores in Scandinavia – has been based on cooperation and collaboration, Bengtsson said.  At the root of its operation is an agreement with each store manager.  Under this, ICA holds 91 per cent of the shares at the outset, with 99 per cent of the ownership switching to the store after four or five years.  The store then pays royalties to ICA.

This arrangement, said Bengtsson, enabled stores to become established and self-standing in their communities, independent and responsive to local needs but with support from ICA to keep them moving forward.  ICA’s strengths lay in its broad product range, including own label goods, ready-to-eat meals and health foods, as well as in central support activities such as advertising and marketing.

“The Nordic market continues to change,” said Bengtsson. “But change is always easier when you have strong values and bonds with your customers.”

Download the Ikea presentation - Download the ICA presentation