2. Is it better for IKEA to own its factories or to contract for its products? In 1943 a 17-year-old Swedish boy started what was to become a multibillion dollar company by selling work pants and other farm supplies door to door. Ingvar Kamprad began selling farm implements under the name IKEA, which is an acronym for his name and where he was born. Today Inter IKEA Systems BV is the owner and franchiser of the IKEA concept. IKEA retailers worldwide operate on a franchise basis. Most, but not all, IKEA retailers belong to the IKEA Group

(154 stores), which includes IKEA retailers, the product development center IKEA of Sweden AB and IKEA trading and wholesaling companies. IKEA group activities are coordinated by IKEA International A
S in Denmark. The IKEA Group is owned by a charitable foundation in The Netherlands. IKEA of Sweden AB is responsible for the entire product range on behalf of Inter IKEA Systems BV. In 2002 the company had a turnover (sales volume) of US$10.8 billion. IKEA is the world’s largest furniture and home furnishing retailer with 175 stores in 32 countries as of the end of 2002