World’s Largest Furniture Maker to Remain a Private Company

January 31, 2013

Unlocking Word Meanings
Read the following words/expressions found in today’s article.

1. stock exchange 
[stok] [iks-CHEYNJ(n.) – a place where stockholders buy and sell capitals or stocks
Example: Selling capital in the stock exchange saved the company from debts.

2. founder [FOUN-der(n.) – a person who starts or establishes something
Example: Steve Jobs, founder of Apple Inc., launched his company in California, USA.

3. remarkable [ri-MAHR-kuh-buhl(adj.) – notable or extraordinary
Example: The worldwide news featured the company’s remarkable success.

4. net profit [net] [PROF-it(n.) – the total profit of a company after all expenses are paid
Example: The company’s net profit remains high even after taxes have been settled..

5. frugal [FROO-guhl(adj.) –thrifty; careful not to waste money or other resources
Example: To avoid overspending, the CEO started to be very frugal.

Read the text below.

Ikea, world’s largest furniture company, will remain unlisted in the stock exchange, said the 86-year-old founder Ingvar Kamprad last December.

Ever since its establishment as a family-owned business in 1943, Ikea has always been a private company.

Kamprad believes that being privately-held allows Ikea to be more flexible in developing the business successfully. The Ikea founder also added that being private is one of the reasons behind Ikea’s remarkable success.

As proof of Ikea’s success, the company’s annual earnings report shows that Ikea’s brand was worth nine billion euros in August last year. The company also gained a 10.3% increase in its net profit in 2011.

Because of Ikea’s success, Kamprad was named as the richest man in Switzerland last year, having a net worth of 32 billion euros. Some disagree with this claim, however, saying that Ikea is owned by a group of people and not just Kamprad.

Nonetheless, Kamprad’s frugal attitude seems to have contributed a lot to Ikea’s success. Per Heggenes, CEO of Ikea foundation, relates Kamprad’s disinterest in material things. To this day, Kamprad still uses an old Volvo car, flies in an economy class plane, and even rides the company shuttle when visiting the stores.

Viewpoint Discussion
Enjoy a discussion with your tutor. 

Discussion A

·         What are the disadvantages of being a private company?
·         If you were to own a company, would you like it to be privately-managed just like Ikea? Why or why not?

Discussion B

·         Do you think it is important for a business person to be frugal? Why or why not?
·         How can people become more frugal?


January 31, 2013