Anorak | Why breaking up Ikea prove Marx was wrong

Why breaking up Ikea prove Marx was wrong

by | 18th, January 2012

WHAT’S the problem with Ikea? Should it be broken up? And why does it prove that Marx was wrong ?

Anders Dahlvig, the flat-pack pioneer’s boss from 1999 until 2009, said IKEA faced the prospect of slowing growth and rising costs. He said the chain had struggled under his watch to come to terms with its scale and develop the processes required to manage a company with £20bn of revenue and operating in 41 countries.

Mr Dahlvig said it had taken his 10 years at the helm to introduce benchmarking disciplines but that he had underestimated the “forces” within IKEA opposed to the changes and had left with the job “only 50pc there”. Instead, he argued that IKEA’s octogenarian founder Ingvar Kamprad and his three sons, who own the company through a Dutch foundation, should consider splitting the business in three.

“Let’s say we cut Ikea in three pieces – one in North America, one in Europe and one in Asia – everyone do their own product development; their own supply chain. Their own thing,” said Mr Dahlvig.

What has this to do with Marx being wrong?

Well, Marx said that a market based economy would invetiably lead to monopoly. For there is something called economy of scale and thus businesses would just, as they grow larger, become more efficient. And that more efficiency leads them to grow some more, and the feedback loop keeps going until every industry has just the

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Posted: 18th, January 2012 | In: Money Comments (13) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink

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  • evil

    Marx isn’t necessarily wrong here if Ikea gets bought up by a larger furniture company or by a global conglomerate looking to diversify into the furniture trade. Splitting Ikea into three would in fact make it more likely that part of it could be taken over by another company. Theres also an argument that ‘ diseconomies of scale ‘ is just a synonym for inefficiency.

    Its said that the ultimate capitalist society is a single company controlling everything. Thankfully that hasn’t happened yet !

  • dairy

    is there a larger furniture company than IKEA….?

  • If they are going to break up IKEA they will need an allen key and a phillips #2 screwdriver

  • percy stilton

    …& someone standing over you with a book of instuctions in one hand & a cup of tea in the other, occasionally shouting out “ says here you’re doing it all wrong”…

  • When we go to IKEA, we wander round admiring some of the furniture but then come away with kitchen utensils we don’t really need.

  • And tea lights, hundreds of ’em!!

  • :LOL: I forgot about the tea lights.

  • percy stilton

    ..& the meat balls…& the pickled herring….

  • percy stilton

    after all no home is an IKEA home without tea lights..pickled herring & meat balls…plus you don’t need a screwdriver or an allen key for these three…

  • coolandcalm

    I love IKEA. I too have tea lights, kitchen utensils and three Daves. (the laptop table). It seems like admitting failure to come out of the ‘marketplace’ with the trolley not quite full…

  • I bought some magnetic measuring spoons last time we went (to the new one near Manchester). They stick to everything in the drawer that’s metal, apart from each other, and they’re triangle shaped so don’t fit into my spice bottles. A pretty useless purchase really.

    Mind you, I didn’t need a screwdriver or allen key for them.

  • June

    We have tealight holders which we got from Ikea by way of St John, we also have a set of Allen keys which did not come from Ilea, they are pre Ikea and came with something else which???memory escapes me.

    On one occasion we went to Ikea at Lakeside and left empty handed

  • coolandcalm

    I have never come out of Ikea Lakeside empty handed! We go on a monday morning (relatively quiet) and have a veggie breakfast to start us off then its into the marketplace! All this talk has made me want to go again….. 🙂