The Ikea-syndrome vs. the Walmart-syndrome

ballz2wallz · 10-16-2006, 09:45 AM

In a recent Newsweek article, McGuire talks about the issues faced by Swedish companies, and how they get around them. The issues mainly discussed are the price to keep employees in a Swedish business, and how those businesses get around them...no employees at all. The result is Ikea. Certainly more of the economy is affected when you have very few jobs to be had, a larger welfare state, etc. You can imagine the impact around all of Sweden.

Now consider the near antithesis of Ikea, here in our very own country; Walmart. Walmart finds ways to avoid paying for its employees (ie health insurance, etc.), however does provide those people with jobs.

What would a comparison of the two situations look like?

Scrum · 10-16-2006, 09:56 AM

A little off subjest, but does Ikea actually manufacture their products, or do they buy them like Walmart does?

PetriW · 10-17-2006, 05:08 AM

Sweden has not had welcomers, people who pack your groceries, people who wash your car and similar extremely unqualified labor for a very long time. Swedes in general accept this as a natural thing.
The jobs are instead in other areas of the company, such as production, marketing, clerks, administration. I firmly believe that not having many of these low status jobs (this is how we term them in sweden) lets us focus on other things. Our low status jobs are instead working at a burger joint, cleaning or taking up quick marketing jobs or similar.
We compete with efficiency, not low wages.

I've had this discussion with Motivez many times but it just doesn't seem Americans understand that welcomers are just not a necessary thing, not for the general job market or for customer loyalty.

Ikea uses this to it's extreme, giving total control to the customer with a lower pricetag bait. I would not say Ikea is a general example of all things swedish but it probably shows the other end compared to walmart.
There was a discussion about this in a thread about Walmart failing in Germany, the German market is not all that unsimilar from the swedish one.

Edit: Ikea does not own any factories apparently, they have their own designers but hire whichever company is cheapest to produce their stuff.

PetriW · 10-17-2006, 05:29 AM

The article goes on to comment on the out-sourcing phenomenon, this is very very old news, this started in the 90ies already and general consensus among economists here seem to be that it has meant MORE jobs, not in unqualified production but in management and sales.

As for the Swedish election, the difference between the right and left in sweden is not all that great. The right won the election through promising to focus on jobs while keeping the welfare state, the left simply promised to raise welfare payout. In essence the swedish workers voted for some change, just not too drastic change.

Probably because the Swedish people are worried that not more people have jobs when at a top in the economy.

I think it's important to not overestimate the "impact" the right will have on the Swedish welfare state. And remember that the Swedish right would be labeled a communist party in the US for it's radical ideas!

PetriW · 10-18-2006, 06:49 AM

Oh and about Pizza Hut. In Sweden you only visit them once.

You arrive and there's a nice sign that you shouldn't take a seat until a table is designated. You wait for 10 minutes then some snotty kid comes and asks you to sit at a table in an empty restaurant. And the slices are expensive as hell.
Sorry, I prefer spening my money elsewhere.

I asked some friends about their Pizza Hut experience and they agreed.

ballz2wallz · 10-18-2006, 08:31 AM

Originally Posted by PetriW

Oh and about Pizza Hut. In Sweden you only visit them once.

You arrive and there's a nice sign that you shouldn't take a seat until a table is designated. You wait for 10 minutes then some snotty kid comes and asks you to sit at a table in an empty restaurant. And the slices are expensive as hell.
Sorry, I prefer spening my money elsewhere. I asked some friends about their Pizza Hut experience and they agreed.

Pizza hut is a lot more popular over here than that. Mostly because people can afford it. Which is due to the fact that Pizza Hut doesn't have to pay out the ass for employees.

PetriW · 10-18-2006, 11:52 AM

Originally Posted by ballz2wallz

Pizza hut is a lot more popular over here than that. Mostly because people can afford it. Which is due to the fact that Pizza Hut doesn't have to pay out the ass for employees.

So you're telling me I should expect to pay more for a pizza than for a restaurant visit? Heck, pizza hut is more expensive than the local pizza place which is within walking distance, and they have better pizzas and more variations than pizza hut does... (Fyi, pizza hut meal $10, pasta at a good restaurant $10, mcdonalds meal $6-7, standard lunch restaurant meal $7.)

That just doesn't float and has nothing whatsoever to do with Swedish labor costs. If I can get way better food and service somewhere else Pizza Huts problem isn't labor cost related.