I want to explore Swedish business giants H&M, IKEA, and Volvo.
Volvo was founded in 1927, IKEA in 1943, and H&M in 2947.
Volvo was started by two employees to Swedish Ball-Bearing company, SKF. Assar Gabrielsson, a SKF Sales Manager, and Engineer Gustav Larson. The car was designed for Sweden's geography and climate, and in the beginning was financed with extra sales commissions that Assar earned, but as the company grew, it did not make profit for years. SKF kept helping to finance the company as a subsidiary of SKF. Volvo was almost sold to an American automobile entrepreneur, Charles Nash, but Assar was confident that Volvo would soon make profit, and sure enough, the next year showed a small profit. Now that Volvo proved that it could survive without the continued investment by SKF, Volvo was put on the Stockholm stock market and SKF sold most of their shares.
Volvo is an example of a company built out of a need, but with much support from another pre-existing company. There were still risks involved with the venture, but the risk was seemingly minimized by the assistance of continued investment by SKF.
H&M was created in 1947 by Erling Persson in Västerås (a city I have been to many, many times!), as a store that sold women's clothing. He got the idea following a post-WWII trip to the United States as he was very impressed by efficient, high-volume stores. 20 years later, Persson acquired a hunting-equipment store (Mauritz Widforss), which included an inventory of men's clothing, which caused Persson to expand to menswear. Merging the women's store (originally called Hennes) with the Mauritz Widforss gave the store the new name H&M.
The store expanded to outside of Sweden around the same time as the merger, and it wasn't until the 1990's when the store was large enough to create a strong international presence. The brand is known for its fast-fashion clothing offerings, a concept also utilized by international fashion store "Zara" (my personal favorite). The idea is to get designs from catwalk to store in the fastest time to capitalize on the current market trends.
IKEA was created by a 17-year old natural entrepreneur Ingvar Kamprad in Sweden. Ingvar sold matches to his neighbors via his bicycle as a little boy, and then the expanded his sales to include fish, Christmas tree decor, seeds, pens and pencils. He founded IKEA as a company to back all of his different sales activity, and as he diversified his portfolio of things to sell, he included furniture in 1948, when he was 22 years old. The sales were mostly mail-order.
One of the company's strength lied in Ingvar's stinginess. The firm is known for the attention it gives to cost control, operational details and continuous product development, allowing it to lower its prices while continuing to expand. Ingvar had those values very strongly in his own life. A characteristic that many will find as IKEA's defining quality is the cheap furniture that can be assembled by the consumer.
IKEA is an enormous private company, and its success can be attributed to its fine-tuned supply chain, its unique concept and strategy, and its inexpensive, chic product offering.
These three businesses are prime examples of Swedish businesses that had a good idea, strong entrepreneurs, and continued motivation to grow the company. The stories mirror those of many American companies, and the big differences lie in the need posed in the country, in Volvo's case, but also in the current trends in the marketplace. These companies may try to stay on top of trends, but one could argue that their heavy influence now allows them to be trend-setters.
This is a picture of a popular mall area in Stockholm!