Rubric for Port Improvement Plan (PIP) Outline and PresentationI.docx

Rubric for Port Improvement Plan (PIP) Outline and
Presentation
Integration of course concepts
25%
Completeness of analysis
30%
Logically supported conclusions, recommendations
25%
Bibliographic support, APA format
10%
Grammar, spelling, and punctuation
10%
TOTAL
100%
116-015 IKEA in Saudi Arabia (A)
IKEA in Saudi Arabia (A) 116-015
KA RTHIK RA MANNA
JÉRÔME LENHARDT
MA RC H OMS Y IKEA in Saudi Arabia (A)
On October 1, 2012, the Swedish newspaper Metro revealed on
its front page that Inter IKEA Systems B.V. (hereafter Inter
IKEA Systems) – one of Sweden’s most iconic companies and
the world’s largest furniture retailer – had erased all images of
women from its fall 2012 catalog for Saudi Arabia.1 The Metro
article compared pages depicting women models from Inter
IKEA System’s Swedish catalog to the equivalent pages in its
Saudi catalog from which the women had been removed (see
Exhibit 1a for a picture of the Metro front page and Exhibit 1b
for further pictures of the differences between the Swedish and

Saudi catalogs). The newspaper article immediately sparked
additional media attention and criticism directed against the
IKEA brand. In Sweden, government officials raised questions
about how Inter IKEA Systems was living up to its own values
and commitments to human rights and gender equality.
Worldwide, news outlets and social media platforms like
Twitter were abuzz, with some critics accusing Inter IKEA
Systems of betraying the company’s Scandinavian values and
yielding instead to pressure from the conservative Islamic
state.2 (Saudi law and culture was generally considered very
strict towards women, barring them, for instance, from driving
and requiring them to have the consent of a male “guardian” to
travel abroad or work.3)
Faced with the growing backlash, the company considered its
potential responses. It could reissue its catalog with women
included, but this approach risked running afoul of Saudi
censors who could impose harsh penalties against organizations
considered violating local laws.4 Three IKEA stores had been
opened since 1983 in Saudi Arabia, through a local franchisee,
Ghassan Alsulaiman Furniture Co.5 It was wary of putting this
operation in jeopardy. Alternatively, Inter IKEA Systems could
do nothing at all, hoping for the crisis to blow over. But the
company was known internationally for its commitment to
social and economic development and to human rights. It was
even a signatory to a United Nations compact to this effect.6 So
much of its brand identity was tied into its progressive social
image, as marketing journalist Rob Gray explained, “This is the
same company that in the 1990s ran one of the first TV
commercials in the U.S. to feature a gay couple – and received
bomb threats in response. Obliterating women in an act of
censorship certainly didn’t look good to many IKEA customers
in markets around the world more used to a liberal, inclusive
stance from the brand.”7 Moreover, some consumers in its key
home markets in Northern Europe and in the U.S. were even
threatening a boycott.8

Professor Karthik Ramanna, Research Associate Jérôme
Lenhardt (Europe Research Center), and Senior Associate Marc
Homsy prepared this case. This case was developed from
published sources. Funding for the development of this case was
provided by Harvard Business School and not by the company.
HBS cases are developed solely as the basis for class
discussion. Cases are not intended to serve as endorsements,
sources of primary data, or illustrations of effective or
ineffective management.
Copyright © 2016 President and Fellows of Harvard College. To
order copies or request permission to reproduce materials, call
1-800-545-7685, write Harvard Business School Publishing,
Boston, MA 02163, or go to www.hbsp.harvard.edu. This
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reproduced, posted, or transmitted, without the permission of
Harvard Business School.
IKEA
The IKEA brand’s origins dated to 1943, when, at the age of 17,
Ingvar Kamprad started his own company in Sweden selling
fish, vegetable seeds, and magazines by bicycle. He called the
company IKEA, which combined his initials with those of his
family farm, Elmtaryd, and parish, Agunnaryd, located in
southern Sweden. Four years later he started a mail-order
catalog.9 In 1948, Kamprad added furniture and house wares to
his mail-order products, and in 1951, opened a display store in
nearby village of Älmhult to allow customers to preview
products before buying. The first IKEA store outside Sweden
opened in 1963 in Norway. Two years later the company opened
its flagship store in Stockholm. In 1974, IKEA opened its first
store in Germany. By the late 1970s, the company had expanded
to Asia and Canada. IKEA opened its first store in the U.S. in
1985 and in Great Britain in 1987.10 In 1983, IKEA decided to
create Inter IKEA Systems, the franchisor of the IKEA brand

and concept, which licensed its intellectual capital to several
different franchisees, and in return received an annual fee of 3%
of their sales.11 The company maintained that franchising was
established to secure longevity and independence for the IKEA
brand and concept and to expand the business and maintain an
entrepreneurial spirit. Some alleged that this somewhat
obfuscating corporate structure was effected to lower the
company’s tax obligations.12 By 2012, Inter IKEA Systems was
the leading furniture retailer, manufacturer, and franchisor in
the world – with a 5% global market share – and the only one
with a global footprint. U.S.-based Ashley Furniture Industries
Inc., its nearest competitor, had a 1.2% market share and was
present only in the U.S. and Canada.13 Company Values
From the start, Kamprad sought “to create a better everyday life
for the many people” by selling affordable, quality furniture to
mass-market consumers around the world.14 He believed his
company would succeed if it operated according to a particular
set of values, “The true IKEA spirit is still built on our
enthusiasm, from our constant striving for renewal, from our
cost consciousness, from our readiness to take responsibility
and help, from our humbleness in approaching our task and on
the simplicity of our way of doing things.”15
In 2000, IKEA Group, the largest franchisee of Inter IKEA
Systems, developed its code of conduct— the IKEA Way on
Purchasing Products, Materials and Services (IWAY)— to
specify minimum acceptable standards for working conditions
and environmental standards at its manufacturing suppliers.16
In 2004 IKEA Group became a participant in the United Nations
(UN) Global Compact, an initiative for companies to follow
standards and best practices globally, by taking the
responsibility of universally upholding human right standards
(see Exhibit 2a for the Compact principles and their location in
IKEA Group’s 2012 Sustainability report). IKEA Group also
signed the UN Guiding Principles on Business and Human
Rights launched in 2011 (see Exhibit 2b for a selection of the
general and founding principles) and the Children’s Rights and

Business Principles launched by UNICEF, Save the Children,
and the UN Global Compact in 2012.17
The same year, IKEA Group outlined the company values in its
“People and Planet Positive” strategy, which focused on three
areas: (1) a more sustainable life at home for consumers; (2)
resource and energy independence for the company; and (3) a
better life for people and the communities touched by IKEA
Group, by producing a positive effect on people’s daily lives,
through supporting and respecting human rights where the
company had influence through its business.18 In addition, the
owner of IKEA Group, the Stitching INGKA Foundation,
funded the IKEA Foundation, a charity registered in the
Netherlands, which donated money to organizations focused on
protecting children from child labor and empowering girls and
women.19 In February 2012, the IKEA Foundation donated EUR
700,000 to the Half the Sky movement, a global group of NGOs
using stories, videos, and social media to support women rights
in developing countries.20 Operations and Financial Results
By 2012, Inter IKEA Systems franchised 338 IKEA stores in 40
countries, the large majority of them (298 in 26 countries) to
IKEA Group and the rest to eleven local franchisees
worldwide.21 Between September 2011 and August 2012,
eleven new IKEA stores had opened and seven IKEA stores had
been relocated worldwide (see Exhibit 3a for the number and
location of IKEA stores by August 2012 and Exhibit 3b for the
breakdown of sales per region by August 2012). IKEA Group
also operated and managed several company-owned furniture
factories and was responsible for all new product design and
development and for supply chain management.
The IKEA Group employed 139,000 workers and recorded 690
million store visits in the year 2012. From September 2011 to
August 2012, it recorded sales of EUR 27.6 billion (up 9.5%
from 2010-2011), representing 94% of all IKEA franchisees’
retail sales,22 and profits of EUR 3.2 billion (up 8% from
20102011). (See Exhibit 4 for key financial data about IKEA
Group from September 2010 to August 2012.)

IKEA Group’s sales were dominated by Europe (70%), followed
by North America (16%), Asia and Australia (8%), and Russia
(6%). Germany was IKEA Group’s main market, with 14% of
sales, 23 while Sweden was IKEA Group’s sixth largest market,
with 5% of global sales.24
By August 2012, the IKEA brand offered a range of 9,500 home
furnishing solutions and products, showcased in their IKEA
catalog. The company printed 212 million catalogs in 29
languages and 62 editions.25 From year to year, the catalog was
updated based on feedback from the previous year. Inter IKEA
Systems indicated that the catalog needed to be relevant in all
of IKEA’s markets and at the same time reflect what the brand
stood for. Inter IKEA Systems had the overall responsibility for
the content of the IKEA catalog.26 The company reported that
the catalog’s content varied only slightly between markets,
mostly due to differences in the local product range and service
offerings. Some products differed due to local size, function,
comfort and cultural preferences. For instance, the mattress
product range featured larger-sized beds in the U.S., whereas in
Russia, multi-generational living in small spaces led to a wider
range of sofa beds.27
IKEA in Saudi Arabia and in the Middle East IKEA’s History
and Operations in Saudi Arabia and the Region
Of the eleven non-IKEA Group companies that owned and
operated IKEA stores worldwide in 2012, four were in the
Middle East region: One franchisee was responsible for the
United Arab Emirates (UAE) market, one for Kuwait, one for
Israel, and one for Saudi Arabia, Ghassan Alsulaiman Furniture
Co.28
The first IKEA store in Saudi Arabia opened in 1983 in Jeddah.
Saudi Arabia was the first country in the Middle East in which
IKEA sold its products.29 IKEA stores then opened in Kuwait
(1984), Dubai (1991), and Israel (2001).30 According to
observers, IKEA chose its new locations generally based on
certain criteria such as population density, market growth

potential, and brand awareness.31 However, IKEA’s first store
in Saudi Arabia was established in 1983 as a pilot project to test
the market, long before the brand had any recognition within the
local community.32
In 1990, a second IKEA Saudi store opened in Riyadh. In 2004
IKEA closed down the two existing stores and opened two
IKEA “concept stores” in the same cities, each measuring about
28,000 square
3
meters and employing 290 employees. The third IKEA store in
Saudi Arabia opened in November 2008 on the east coast of the
city of Dhahran (22,000 square meters and 245 employees).33
All three stores featured an array of design and home
improvement solutions, all of which helped to cement the
company’s position as market leaders, with sales increasing at a
double-digit rate for each year between 2007 and 2011.34
As of 2012, IKEA sales in the Middle East represented about
2% of IKEA’s sales globally (see Exhibit
3b for Inter IKEA sales by region). 35 IKEA’s Strategy in Saudi
Arabia and the Region
Inter IKEA Systems had a tradition of abiding by local norms in
the Middle East. For instance, IKEA's world-renowned
meatballs were Halal in the UAE and Saudi Arabia (see Exhibit
5 for a picture of the meatballs in Sweden and in Saudi Arabia).
In accordance with local customs, restaurants in the Saudi IKEA
stores were split into two areas separated by a partition: one
section for families and women, the other area for single men.
Inter IKEA Systems also allocated rooms in its Saudi stores to
be mosques, usually used for prayer several times a day. During
prayer time, IKEA stores closed their doors for new customers
for around 25 minutes, while allowing customers in the store to
continue shopping, a practice prevalent among all other retail
stores in Saudi Arabia.36 Unlike IKEA stores in several other
countries around the world, there was no music in the IKEA
stores in Saudi Arabia, in line with local customs.
On most occasions, Inter IKEA Systems kept the same model

nomenclature in its Saudi stores as in its other stores globally.
For example, it kept the Swedish product names Karlstad and
Ektorp, instead of tailoring them to the local Arabic language.
However, part of IKEA’s offering was also tailored to suit local
demand. The company for instance developed special
collections during the month of Ramadan (see Exhibit 6 for a
picture of the Ramadan collection). Moreover, its wine glasses
were simply called “glasses,” given alcohol was prohibited in
the country. According to the IKEA range manager in Saudi
Arabia, some product ranges were removed altogether from
IKEA’s Saudi offerings since they were not aligned with Saudi
preferences: Christmas-themed products for instance were taken
out from the product range.37
In line with local traditions, Inter IKEA Systems in Saudi
Arabia targeted the entire family with its advertisements. The
company’s Saudi stores displayed women dressed in traditional
local clothes and wearing a headscarf, while men in its online
ads wore the traditional long white dress. Similar advertisement
customizations were prevalent in other stores in the Middle
East, such as in Dubai, Abu Dhabi, and Kuwait.38 In 2010, the
marketing manager of the IKEA store in Jeddah commented on
the difference between IKEA ads in Saudi Arabia and
elsewhere. “We asked Inter IKEA Systems to replace the women
with men in the catalog in order to be able to get the declaration
from authorities to let the catalog enter the country,” he said.
“In our Riyadh store we have received some complaints from
some customers asking us to replace or remove the pictures of
the women who are without a full traditional dress and
headscarf so we replaced the ads with fully covered women,” he
added.39
IKEA store employees in Saudi Arabia were of various
nationalities: while some employees were Saudi citizens,
several others were Yemenis, Dutch, British, Swedish,
Jordanian, and Pakistani, among other nationalities. Moreover,
most employees were men, with exceptions made for employees
working in the children’s sections.40

Inter IKEA Systems’s localization ground strategy in Saudi
Arabia had appeared to have succeeded in increasing the
brand’s popularity and store footfall. In fact, the 2004
reopening of its Jeddah store witnessed a long waiting line of
more than 8,000 customers some of whom camped overnight to
claim their credit vouchers and buy IKEA products.41
Other Western companies also adapted their practices to Saudi
Arabia, where Booz & Co estimated the local retail market at
$84.8 billion in 2012.42 When U.S. coffee company Starbucks
opened its coffee shops in Saudi Arabia in early 2011, it
removed the long-haired woman from its logo, keeping solely
her crown.43 British retailer Marks & Spencer hired exclusively
female sales staff for its female lingerie store in Saudi
Arabia.44 Spanish cloth brand Zara did not play music in its
Saudi stores, and also blurred the images of female models on
video screens in their stores to abide by Saudi customs.45
Saudi Society Political Context
The Kingdom of Saudi Arabia was an independent monarchy.
The king, also custodian of the Two Holy Mosques of Mecca
and Medina, Islam’s holiest sites, was head of the state and
governed the country through a council of ministers on which he
served as president.
Following the Iraqi invasion of Kuwait in 1990 and the
resulting uncertainties in the Arabian Peninsula, the Basic Law
of Saudi Arabia[footnoteRef:1] was issued by a royal decree in
1992. It reaffirmed the kingdom’s status as an Islamic
Monarchy and formalized its system of government: [1: The
Basic Law of Saudi Arabia formalized several aspects of the
constitutional framework of the country. ]
The Kingdom of Saudi Arabia is a sovereign Arab Islamic State.
Its religion is Islam. Its constitution is Almighty God’s Book,
The Holy Qur’an [Holy Book in Islam], and the Sunna
(Traditions) of the Prophet (Peace Be Upon Him).46
This “constitution” left some room for interpretation, leading to

variations in implementation from one king to another. Late
King Fahd, king of Saudi Arabia from June 1982 until his death
in 2005, commented on criticism he received from Western
media upon the issuance of the Basic laws. He stated that there
is no harm in benefiting from knowledge emerging from
Western democracies, but he added that Western values as a
whole were not suitable for Saudis.47
Part of the reforms of King Abdullah bin Abdul Aziz (hereafter
King Abdullah), who ascended the throne in 2005, was to
establish the new Law of Judiciary, giving the judicial system
more independence and establishing the Supreme Judicial
Council to oversee the judicial system.48 Still, Sharia law
remained the overarching basis for the legal system, and arbitral
award, local or international, was not enforceable if it was non-
compliant with Sharia law and public policy.49
Sharia law was derived from the Qur’an, considered by Muslims
to be a revelation from God, and the Hadith, which included
reports and narratives of the life of Prophet Muhammad. Sharia
law prescribed both religious and secular duties.50 Sharia
judicial proceedings had significant differences from other legal
traditions. For instance, in Sharia courts, judges’ verdicts did
not set binding precedents.51 The law was mostly unwritten,
leaving judges with significant discretionary power, which they
often exercised in favor of tribal traditions.52
Adoption and application of Sharia law varied from one
Muslim-majority country to another.53 For instance, Turkey had
a secular system where Sharia law played no role in the nation’s
legal framework.54 Other countries such as Kuwait adopted a
mixed legal system with some reliance on
5
Sharia.55 Saudi Arabia’s legal framework was based entirely on
Sharia and was interpreted according to a strict form of Islam
known as the way of the Salaf (righteous predecessors) or
Wahhabism. Women in Saudi Arabia
Saudi Arabia was a signatory country (with
reservations[footnoteRef:2]) to the UN Convention on the

Elimination of all Forms of Discrimination Against Women
(CEDAW).56 At the same time, Saudi Arabia in 2012 ranked
131st out of 135 countries on the Global Gender Gap Index. The
kingdom ranked better on some of the sub-indices of that index
than on others: while it ranked 55th in terms of gender equality
in health and survival and 91st for gender equality in
educational attainment, it ranked 133rd in both equality in
political empowerment and on economic participation and
opportunity57 (see Exhibit 7 for the Gender Gap reportsfor
Saudi Arabia from 2006 to 2012). [2: One reservation was that
Saudi Arabia would not follow terms of the convention that
contradicted Islamic Law. ]
The Commission for the Promotion of Virtue and Prevention of
Vice (Mutaween), sometimes called the “religious police,” was
a special committee of around 3,500 Saudi men that handled the
enforcement of the kingdom’s strict moral code, including the
ban on women driving, the public dresscode requirements for
women, and the separation of the sexes in public spaces.58
Enforcement of restrictions on women varied by region, due to
variations in local traditions dating to before the advent of
Islam. For instance, the west coast city of Jeddah was relatively
permissive due to its historical interaction with other regional
civilizations, while Riyadh and the surrounding central region,
which had been isolated from the outside world for much of
Arabian history, had stricter traditions.59
King Abdullah was seen as a reformer and pro-woman, at least
in a relative sense. Since he became king in 2005, the kingdom's
Global Gender Gap Index improved from 0.52 to 0.57 (on a
scale of zero to one, with one being the best score for gender
equality), considered the 13th most improved country globally
on that index in 2012. In a first for the country, in 2009, King
Abdullah named a woman to the council of ministers,
appointing Noor Al-Fayez as deputy minister for women’s
education.60 In September 2011, the king announced the right
for women to vote in the 2015 municipal elections.61

In June 2012, although the decision was strongly opposed by
hard-liner clerics, the kingdom announced that it would allow
women to compete in the Olympics, while stating that the Saudi
female competitors would be dressed to “preserve their
dignity.”62 Women in Saudi Media
The Saudi Ministry of Culture and Information oversaw the
kingdom’s media policy (including advertising). Saudi citizens
were provided freedom of expression consistent with Islamic
values. This included spreading ethical virtues and Islamic
teachings.63
Prior to 1979, women regularly appeared in Saudi television and
newspaper ads. On November 20th 1979, a group of 500
Islamic-extremist insurgents calling for the overthrow of the
king and the royal family seized the Grand Mosque of Mecca.
Two weeks later the Saudi Army ended the siege, captured the
insurgents and released the hostages. In the aftermath of the
insurgency, King Khaled, Saudi Arabia’s king at the time,
followed an approach of appeasement of hardliners, choosing to
give more power to religious conservatives. Photographs of
women in newspapers were banned, then women in
television. Gender segregation became more prevalent and the
religious police became more assertive.64
Later on, in the wake of hardliner criticism of the kingdom’s
support for U.S. military operations in the region, the Saudi
Law of Printing and Publication issued by a Royal Decree in
2003 required all printed material to go through the Ministry of
Culture and Information before being published. The stated
purpose was to ensure that the material was free from content
insulting to Islam or the interest of the state. In case the

material violated the laws, the Ministry could, depending on the
violation, levy a range of penalties. These included, requiring
the material be withdrawn from circulation, a financial penalty,
and shutting down the offending business.65
Direct censorship was prevalent in Saudi Arabia: “offending”
articles imported into the country were excised or blackened, or
pages were glued together. Offenses ranged from news critical
of the administration to pictures in fashion magazines of bare
legs and couples kissing or embracing66 (see Exhibit 8 for an
example). Doing Business in Saudi Arabia
As part of the country’s economic reform process, the Saudi
Arabian General Investment Authority was established in 2000
with the objective of promoting investment in the kingdom and
encouraging a robust business environment.67 In 2012, Saudi
Arabia ranked 22nd on Ease of Doing Business out of 185
countries according to the World Bank. As a comparison, the
United Arab Emirates ranked 26th, Qatar 40th and Kuwait
82nd.68 At the same time, businesses in Saudi Arabia faced
problems they would usually not otherwise face in other
countries in the Middle East. According to some businessmen
working in the kingdom, Saudi laws and regulations were not
well-documented, and efforts to try to find relevant laws
sometimes proved challenging. Moreover the subjective nature
of the judicial system as well as the occasional crackdowns on
media outlets and bloggers added ambiguity and caused fear
among the business community.69
One entrepreneur recalled an instance when his company, which
operated children’s play areas in malls, was choosing new
mascots. When his designers suggested animations of a boy and
a girl, a heated debate broke out among his managers, with
some thinking the mascots would bring scrutiny from the
religious police given that the characters would appear together
in ads. The entrepreneur eventually decided to use animated
animals as mascots, after failing to receive guidance from the
relevant authorities.70
Discussions with business managers operating in Saudi Arabia

revealed that just as the censorship rules governing businesses
were unclear so too were the possible penalties. Some
businesses found in violation of censorship rules were fined
while others were forced to shut down entirely. In the event of
being shut down, a business’ ability to reopen depended in part
on the owner’s relationships with the establishment.71
Moreover, standards of vigilance by government and religious
authorities varied across different media channels. What was
usually acceptable on the Internet was not necessarily
permissible in print magazines.72
Foreign executives in the country reported that multinational
corporations were generally expected to adhere to the same
rules as local companies. In fact, several multinational
companies operating in the country had adopted strategies that
embraced the conservative local culture. For instance, Tide, a
U.S.-based detergent brand, owned by Proctor and Gamble, had
launched a product specially formulated to clean Saudi women’s
black robes (Abayas). To market the product, Tide had chosen
the slogan “Proud of my black Abaya,” which was seen by some
as a double entendre: in addition to celebrating the product’s
coloring abilities, the slogan was meant to affirm the
conservative principles that dictated that women be fully
covered (see Exhibit 9 for picture of Tide Abaya campaign).
The IKEA Saudi Catalog Scandal
On October 1, 2012, an article titled “Women Cannot be
Retouched Away” in the issue of the free Swedish newspaper
Metro revealed that the fall 2012 catalog of Inter IKEA Systems
for Saudi Arabia had erased women out of the catalog (see
Exhibit 1). While in other non-Saudi versions of that catalog
there were women around the IKEA furniture, they had been
airbrushed out of its pages in the Saudi Arabian version. Even a
photo of one of IKEA’s female designers had been removed.73
The IKEA Saudi catalog, which was also available online,
otherwise looked exactly the same as other editions. Observers
noted that the main content of the 62 editions of the 2012 IKEA

catalog was the same in most markets, although Inter IKEA
Systems said that in the past it may have adapted the images to
please fashion-related tastes of local markets (and in at least
some cases seemed to align them with cultural standards).74
A spokeswoman for IKEA Group, which produced the catalogs
on behalf of Inter IKEA Systems, indicated that IKEA had
airbrushed women out of several Saudi catalogs since its first
store opening there in the 1980s.75 The Metro newspaper noted
that it was not forbidden to depict women in advertising or print
in Saudi Arabia and that Inter IKEA Systems had self-censored
its catalogs distributed in the Middle East for 20 years (alleging
that during the 1990s pictures of women completing chores
were left in catalogs while one of a women lounging on a couch
reading a book was eliminated).76 The Reaction in Sweden
The Metro publication immediately sparked criticism against
the IKEA brand in Sweden, including from Swedish government
officials raising questions about how the IKEA brand was living
up to its own values. Sweden's European Union Minister
Birgitta Ohlsson called the move "medieval” on Twitter.
Sweden’s trade Minister, Eva Björling said, “You cannot
remove or retouch women out of reality. If women aren't
allowed to be seen or work, then Saudi Arabia is losing half of
its intellectual capital.”77 Former Director of the Swedish
Gender Equality Agency, Claes Borgström, added, “I think that
Swedish industry must adhere to the ethical rules. One should
not contribute to market and sell its products in a way which
discriminates against women.”78
Swedish Gender Equality Minister Nyamko Sabuni said that
Inter IKEA Systems was a private company that made its own
decisions, but added that it also projected an image of Sweden
around the world: “For IKEA to remove an important part of
Sweden’s image and an important part of its values in a country
that more than any other needs to know about IKEA’s principles
and values—that’s completely wrong,” adding, “Therefore it is
a pity that it is there they choose to abandon part of their
values, in this case equality.”79

A Swedish IKEA store customer was also quoted as saying, “I
simply think it is silly. We exist in a society with women and
men. You can’t just remove women. I’m Arab, I’m Muslim but I
simply think women exist in society and should take part.”80
The Global Reaction
The outcry quickly spread around the world, picked up by news
outlets and social media platforms like Twitter, with editors
arguing about whether Inter IKEA Systems was bowing to
pressure from censors in Saudi Arabia or adapting to the
country’s cultural sensibilities.81 Jacqui Hunt, a director in the
London office of Equality Now, a global non-governmental
organization fighting discrimination against woman around the
world, indicated: “Women are equal and integral members of
society and cannot just be airbrushed out. The IKEA Group has
to take responsibility for the messages it is sending and take
extra care, particularly as a global corporation, to promote
messages of equality and nondiscrimination of all peoples.”82
Observers also wondered if IKEA‘s brand image and sales could
be affected.83 In August 2012, Inter IKEA Systems said it
estimated the value of its brand at EUR 9 billion, or just over
$11 billion, – the 31st most valuable brand in the world
according to advertising company WPP PLC’s Millward Brown.
Political analyst Dee Madigan added, “A visit to IKEA is a
quasi-visit to Sweden. Their values are akin. IKEA is a brand
that prides itself on inclusiveness and social decency. And
Sweden is a country that prides itself on its strict gender
equality protections.”84 Madigan estimated that the issue
therefore caused a fair bit of brand damage in Inter IKEA
Systems’s home and global markets.85 Ardi Kolah, a brand
marketing lecturer in London echoed that thought, “What IKEA
failed to recognize was that they are a Swedish, not Saudi
Arabian brand, and that people regarded it as a ‘global brand
ambassador’ and representative of Swedish culture globally.”86
Ann Elizabeth Mayer, a professor of legal studies and business
ethics at Wharton added, “IKEA has gone out of its way to
advertise its support for [NGOs defending women rights].

Where do things stand now that IKEA has taken an ill-
considered step that leaves it open to criticism for becoming an
active collaborator in official Saudi strategies to render women
invisible and powerless?”
As a result, individual comments about boycotting IKEA
products appeared on several websites and social media. NGO
Human Rights Watch Executive Director Kenneth Roth for
instance received on his Twitter page several calls from the
U.S. and Northern Europe to boycott IKEA products.87
Reaction of Saudi Media
Saudi media did not show much interest in the news. The media,
largely regulated, simply channeled the news from Metro
magazine without providing opinions. Al-Arabiya, a major pro-
Saudi News Channel, reported the news with the headline: “A
vanishing act? IKEA ‘erases’ women from Saudi catalog.”88
Some Saudi bloggers and activists provided their opinions on
the matter: “We’re beyond that right now in Saudi Arabia,”
blogger Eman Al Nafjan, famous for defying traditions by
driving a car in June 2011, told CNN. “With Internet and
satellite TV, there's really no such thing anymore as blacking
out women or airbrushing out women. I would be upset if
something like Google was doing it, but for IKEA to do it,
that’s just marketing – it’s not such a big deal.”89 She later
tweeted that people should be more upset at car companies, such
as GMC, for marketing their cars in a country where women are
not allowed to drive.90
The Decision
As the worldwide media coverage of its activities in Saudi
Arabia grew, and as experts and consumers started to weigh in
on social media, Inter IKEA Systems had to consider how to
respond.
Exhibit 1a Metro Front Page on October 1, 2012
Source: http://www.reuters.com/article/2012/10/02/us-ikea-
saudiarabia-idUSBRE8910O320121002 and Copyright:

Reuters/Henrik Montgomery/Scanpix/Files, accessed July 2015.
Note for Description:A person holds a copy of the Metro daily
newspaper in Stockholm October 1, 2012, with its front page
comparing images for the IKEA catalogs in Sweden (L) and
Saudi Arabia (R) for next year. The Saudi version of the
otherwise identical photos does not show a woman.
Exhibit 1b Other Pictures of IKEA Saudi Catalog Compared
with IKEA Swedish Catalog of 2012
i. IKEA Var Nya Collection in Swedish catalog (above) and
Saudi Catalog (below), 2012
Source: http://knowyourmeme.com/photos/412717-ikea-
catalogue-photoshop-controversy#media-title, accessed July
2015.
ii. IKEA Table Collection in Swedish catalog (left) and Saudi
Catalog (right), 2012
Source: http://knowyourmeme.com/photos/412717-ikea-
catalogue-photoshop-controversy#media-title, accessed July
2015.
Exhibit 2a UN Compact Reference Table and Principles,
and Location in IKEA Group Sustainability Report FY2012
Source: IKEA Group Annual Sustainability Report, 2012,
page 94, accessed July 2015.
Exhibit 2b UN Guiding Principles on Business and Human
Rights (2011), Extracts

Source:
www.ohchr.org/Documents/Publications/GuidingPrinciples
BusinessHR_EN.pdf, accessed July 2015.
14
13
116-015
-15-
Exhibit 3a
IKEA Stores by Country, Worldwide, by August 2012
(including all IKEA Franchisees)
Source:
http://supplierportal.ikea.com/factsfigures/Documents/Facts%20
and%20figures%202012.pdf, accessed July 2015.
Note:
Stores opened between September 2011 and August 2012 are in
blue.
Exhibit 3b IKEA Sales, from all Franchisees, by Region, by

August 2012
Source: Inter IKEA Systems 2012 Facts
and Figures, accessed July 2015,
http://inter.ikea.com/Global/Page%20files/FactsandFigures_201
1.pdf, accessed July 2015.
Note: Based on the pie chart, casewriters’ analysis led to
estimate sales from Middle East to 2% of global sales.
Exhibit 4 IKEA Group Financial Figures from 2010 to 2012 (in
euro million), FY ending August of each year
Income Statement
2010
2011
2012
Revenue
23,539
25,173
27,628
Cost of sales
12,454
13,773
15,723
Gross Profit
11,085
11,400
11,905
Operating Cost
7,888
7,808
8,423
Operating Income
3,197
3,592
3,482

Total financial income and expense
76
165
427
Income before minority interests and taxes
3,273
3,757
3,909
Tax
781
781
695
Income before minority interests
2,976
2,976
3,214
Minority interests
-10
-10
-12
Net income
2,688
2,966
3,202
2010 2011 2012
Balance Sheet
Property, plant and equipment
15,982
16,173
17,264
Other fixed assets
2,683
2,416

2,672
Total fixed assets
18,665
18,589
19,936
Inventory
3,415
4,387
4,664
Receivables
2,238
2,077
2,270
Cash and securities
16,955
16,828
17,878
Total current assets
22,608
23,292
24,812
Total assets
41,273
41,881
44,748
Group equity
22,841
25,411
29,072
Long-term liabilities Other non-current
4,296
3,123
2,523
liabilities
1,325
1,469

1,625
Total non-current liabilities
5,621
4,592
4,148
Short-term liabilities
7,724
7,107
6,814
Other payables
5,087
4,771
4,714
Total current liabilities
12,811
11,878
11,528
Total equity and liabilities
41,273
41,881
44,748
Source: Casewriters, based on IKEA Group 2011 and 2012
annual reports.
Exhibit 5 IKEA Swedish Meatballs: Sweden (left) vs. Saudi
Arabia (right)
Source: David Eskander, Mohamed Kotaiba Abdul Aal, “Does
IKEA Culture Apply Abroad,”Karltstad University, October
2010, http://nwc.co/blog/2008/10/tweetup-ikea-trip-swedish-
meatballs/, accessed July 2015.

Exhibit 6 Ramadan collection - IKEA Saudi Arabia
Source: IKEA Saudi Arabia Website, http://ar.ikea.com/sa/ar/,
accessed July 2015.
Exhibit 7 Global Gender Gap Report - Saudi Arabia (2006-
2012)
Source: Global Gender Gap Report, 2012, Saudi
Arabia,
http://www3.weforum.org/docs/WEF_GenderGap_Report_2012.
pdf, accessed July 2015. Exhibit 8 Censored Advertisement in
Saudi Arabia
Source: Jeddah Daily Photo, May 23, 2009,
https://susieofarabia.wordpress.com/2009/05/23/more-
censorship/, accessed July 2015.
Exhibit 9 Tide Abaya Campaign
Source: Roland Younes, “Tide Abaya”, Youtube, Published
April 2nd, 2013,
https://www.youtube.com/watch?v=IxlBMbJzq3E, accessed
August 2015.
Endnotes
1 Metro. (2012, October 1). Retrieved June 23, 2015, from
Factiva: http://www.metro.se/nyheter/kvinnor-gar-inte-att-
retuschera-bort/EVHlja!2mPseJ6LPTrK2/.
2 Anna Ringstrom, “Swedes slam IKEA for its female-free
Saudi catalogue, Reuters, October 2, 2012.
3 Missing the Picture: IKEA’s Women-free Catalogue in Saudi
Arabia Fails to Protect Company Values and Reputation,
Wharton Knowledge at Wharton, October 16, 2012,
http://knowledge.wharton.upenn.edu/article/missing-the-picture-

ikeaswomen-free-catalogue-in-saudi-arabia-fails-to-protect-
company-values-and-reputation/.
5 Ghassanco Subsidiaries. (n.d.). Retrieved June 22, 2015, from
Ghassanco: http://www.ghassanco.com/Subsidiaries.html.
6 Private Media Partners Pty Ltd. (2012, November 5). Missing
the Picture: IKEA's women-free catalogue disaster. Retrieved
Jne 22, 2015, from Factiva:
https://global.factiva.com/ha/default.aspx#./!?&_suid=14349818
3484305132276790682226.
7 Ardi Kolah, “Why culture matters and how brands get this so
wrong!” Linkedin Pulse, May 1, 2014,
https://www.linkedin.com/pulse/20140501081538-5423737-
why-culture-matters-and-how-brands-get-this-so-wrong.
8 Twitter, “Ikea saudi catalog boycott
search,”https://twitter.com/search?q=ikea%20saudi%20catalog
%20boycott&src=typd.
9 Hoovers, “Inter IKEA Systems B.V. Profile,” accessed July
2015.
10 Hoovers, “Inter IKEA Systems B.V. Profile,” accessed July
2015.
11 Inter IKEA Systems 2012 annual report, page 8, accessed
July 2015.
12 The Economist, “Flat -pack accounting,” May 11, 2006,
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13 Passport, “Inter IKEA Systems Home and garden,
Euromonitor International, June 2012.
14 Ingvar Kamprad, “The testament of a furniture dealer,”Inter
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16 IKEA Group Sustainability Report 2012, accessed July 2015.
17 Private Media Partners Pty Ltd. (2012, November 5).
Missing the Picture: IKEA's women-free catalogue disaster.
Retrieved Jne 22, 2015, from Factiva:
https://global.factiva.com/ha/default.aspx#./!?&_suid=14349818
3484305132276790682226.
18 IKEA Group Sustainability Report 2012, p. 73, accessed July
2015.
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20 IKEA Joins Half the Sky Movement, IKEA Foundation,
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27 Inter IKEA Systems, “Where the IKEA concept comes to
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32 Ikea History, “1980s,” Company website,
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42 Camilla Hall, “Mideast poses marketing minefield,”
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for cropping women out of their Saudi catalogs, the principle is
much more applicable if you wld be upset at #GMC,” Twitter
Post, October 2, 2012, 8:06 AM.
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