When IKEA enters : Do local retailers win or lose?

IKEA is one of the world’s largest retailers, but little is known about how IKEA impact incumbent retailers when deciding to enter a local market. Previous studies on the effects of big-box entry on surrounding retailers have also generated inconclusive results, and mainly been focused towards entry of Wal-Mart in the United States. We contribute to this literature by investigating the effects of IKEA entry on revenues and employment for incumbent retail firms in three Swedish municipalities during 2000-2010. Our results indicate that a new IKEA store increases average revenues for incumbent retailers within the entry municipality by 11%, but also that the effect is highly heterogeneous within the municipality. Retailers that were located up to 1 km from IKEA experienced a 26% increase in revenues when IKEA entered the municipality. However, the positive spillover effect of a new IKEA store on retail revenues diminished with the distance to IKEA, and turned insignificant for retailers in the city centers and those that were located 5-10 km from IKEA. The effects on employment were much less pronounced, and in most cases statistically insignificant.

Öppna arenor och slutna rum : några kommunikationskonsulter i Dalarna ser på opinionsbildning

Syftet med denna uppsats är att ta reda på hur lokala kommunikationskonsulter i Falun/Borlänge-regionen ser på opinionsbildning via professionella konsulter. De centrala begrepp som avhandlas är PR, opinionsbildning och lobbying.Den teoretiska ram som omger undersökningen består av de teoribyggen som skapats av Jürgen Habermas, James E. Grunig och Larsåke Larsson. Habermas ställer sig tveksam till den demokratiska nyttan av professionell opinionsbildning, Grunig är mer positiv och Larsson ser både för- och nackdelar med PR-verksamheten. Larssons undersökning av opinionskonsulter från 2005 refereras också.Undersökningen bygger på intervjuer med ett antal kommunikationskonsulter verksamma i Falun och Borlänge. Den lokala marknaden för opinionsbildande uppdrag diskuteras, men också huruvida politiska uppdrag förser byråerna med politisk färg. Huruvida medarbetarnas engagemang är viktigt och hur hög statusen på opinionsbildande uppdrag är ventileras, samt vilka arbetsmetoder som används. Intervjuerna behandlar också förekomsten av lobbying på lokal nivå. Till slut redogör de intervjuade för sin syn på hur opinionsbildning, PR och lobbying via konsulter påverkar demokratin.Under slutsatser diskuteras resultatet i relation till den teoretiska ramen. Att PR- och reklambranscherna alltmer växer samman och att opinionsbildning är ett vanligt inslag i många projekt är ett faktum som också skymtat fram i den teoretiska ramen. Men reklam- och PR-metoder integreras också i politiken, på gott och ont. Följaktligen växer den gråzon som finns mellan de olika typerna av kommunikation och mellan opinionsbildande och icke-opinionsbildande uppdrag. Det försvårar gränsdragning och tydlighet, men skapar nya kreativa möjligheter.Att den ökade användningen av kommunikationskonsulter kanske kan bidra till en orättvis fördel för resursstarka organisationer diskuteras. Ny teknik, t.ex. Internet, kan dock eventuellt vara den motvikt som gör det möjligt även för resurssvaga grupper att höras i det offentliga samtalet. Kommunikation som maktfaktor tas även upp utifrån termer som lobbying och medias dagordningsfunktion.Några aspekter av den outnyttjade potential som PR har ventileras också. PR som metod är en outnyttjad resurs på det lokala planet, något som kan bero både på okunskap hos de lokala kunderna och ett traditionellt arbetssätt hos byråerna. Utifrån intervjusvaren framkommer att både byråerna, deras kunder och media på landsorten skulle gynnas av ett större samarbete.Resultaten av intervjuerna stöder mycket i den teoretiska ramen, medan somligt förkastas. Som sammanfattning kan sägas att opinionsbildning via konsulter kan användas för både gott och ont. Vilket som blir resultatet handlar som oftast om etik, ansvar, öppenhet och professionalitet.ABSTRACTThe primary target for this report is to find out how communication consultants in the region of Falun and Borlänge views the practice of establishing public opinions by using professional public relations consultants. The concepts in focus are PR, the moulding of public opinion and lobbying.The theoretical framework surrounding this report is the writings by Jürgen Habermas, James E. Grunig and Larsåke Larsson. Habermas has doubts as to the democratic use of professional consultants working with public opinions, Grunig has a somewhat more positive approach and Larsson sees both advantages and disadvantages in a democratic sense with the PR industry. Larssons research concerning consultants working with the moulding of public opinions from 2005 is also reviewed. The research is carried out by interviewing some communication consultants working in the Falun /Borlänge- area. The local market for commissions concerning public opinions is discussed, but also if and how political commissions are forcing a political stamp upon the firms engaging in such commissions. The importance of personal commitment in the consultants and the level of prominence commissions concerning public opinion has in the business is discussed, but also which methods is used and preferred. The interviews also deal with the practice of lobbying in the local arena. Finally the participants state their views on how the moulding of public opinion, PR and lobbying effects the democracy. Conclusively, the result is put in relation to the theories earlier mentioned. The public relations market is merging with the advertising business, that is a fact, and establishing public opinion is a common element in a lot of projects. But methods used for advertising and PR are also integrated in the political sphere, for good and bad. That has made the distinction between different kinds of communication harder, thereby enhancing the difficulties of establishing boundaries and achieving clarity. Yet at the same time it facilitates new creative opportunities.The growing use of communication consultants may contribute to unfair advantages for organisations with large economic resources. New technical development though, such as the Internet for example, may prove to simplify communication for groups with lesser economic power. Communication as an aspect of power is being discussed in terms of lobbying and the agenda setting power of media.Some aspects of the unused potential that lies within PR are also in focus in this report. PR as a method is an unused resource in the local market, which can be due to the local clients lack of knowledge but also to the traditional work carried out by the communication firms. The findings of the interviews show that both communication firms, their clients and the local media would benefit from greater cooperation.The theoretical base in this work is mostly supported by the interviews, though a few of the findings does not agree. The moulding of public opinions by professional consultants can be used for both good and bad. What the result will be is, not surprisingly, a question of ethics, responsibility, openness and professionalism.

The impact of big-boxes on local retail : What happens when IKEA comes to town?

The development of large discount retailers, or big-boxes as they are sometimes referred to, are often subject to heated debate and their entry on a market is greeted with either great enthusiasm or dread. For instance, the world’s largest retailer Wal-Mart (Forbes 2014) has a number of anti- and pro-groups dedicated to its being and the event of a Wal-Mart entry tends to be met with protests and campaigns (Decamme 2013) but also welcomed by, for instance, consumers (Davis & DeBonis 2013). Also in Sweden, the entry of a big box is a hot topic and before IKEA’s opening i Borlänge 2013, the first in Sweden in more than five years, great expectations were mixed with worry (Västerbottens-Kuriren 2011).The presence of large scale discount retailers is not, however, a novel phenomenon but a part of a long-term change in retailing that has taken place globally over the past couple of decades (Taylor & Smalling, 2005). As noted by Dawson (2006), the trend in Europe has over the past few decades gone towards an increasing concentration of large firms along with a decrease of smaller firms.This trend is also detectable in the Swedish retail industry. Over the past decade, the retailing industry in Sweden has increased by around 190 Billion SEK, and its share of GDP has risen from 2,7% to 2,9%, while the number of employees have increased from 200 000 to 250 000 (HUI 2013). This growth, however, has not been distributed evenly but rather it has been oriented mainly towards out-of-town retail clusters. Parallel to this development, the number of large retailers has risen at the expense of market shares of smaller independent firms (Rämme et al 2010). Thereby, the presence of large scale retailers is simply part of a changing retail landscape.The effects of this development, where large scale retailing agents relocate shopping to out-of-town shopping areas, have been heavily debated. On the one hand, the big-boxes are accused of displacing independent small retail businesses in the city-centers and the residential areas, resulting in, to some extent, reduced employment opportunities and less availability for the consumers - especially the elderly (Ljungberg et al 2006). In addition, as access to shopping now tends to require some sort of a motorized vehicle, environmental aspects to the discussion have emerged. Ultimately these types of concerns have resulted in calls for regulations against this development (Olsson 2010). On the other hand, the proponents of the new shopping landscape argue that this evolution implies productivity gains, the benefits of lower prices and an increased variety of products (Maican & Orth 2012). Moreover it is argued that it leads to, for instance, better services (such as longer opening hours) and a creative destruction transformation pressure on retailers, which brings about a renewal of city-centerIIretail and services, increasing their attractivity (Bergström 2010). The belief in benefits of a big box entry can be exemplified by the attractivity of IKEA, and the fact that municipalities are prepared to commit to expenses amounting up to hundreds of millions in order to attract the entry of this big-box. Borlänge municipality, for instance, agreed to expenses of about 350 million SEK in order to secure the entry of IKEA, which opened in 2013 (Blomgren 2009).Against this backdrop, the overall effects of large discount retailers become important: Are the economic benefits enough to warrant subsidies or are there, on the contrary, some very compelling grounds for regulations against these types of establishments? In other words; how is overall retail in a region where a store like IKEA enters affected? And how are local retail firms affected?In order to answer these questions, the purpose of this thesis is to study how entry of a big-box retailer affects the entry region. The object of this study is IKEA - one of the world’s largest retailers, with 345 stores, active in over 40 countries and with profits of about 3.3 billion (IKEA 2013; IKEA 2014). By studying the effects of IKEA-entry, both on an aggregated level and on firm level, this thesis intends to find indications of how large discount retail establishments in general can be expected to affect the economic development both in a region overall, but also on the local firm level, something which is of interest to both policymakers as well as the retailing industry in general.The first paper examines the effects of IKEA on retail revenues and employment in the municipalities that IKEA chose to enter between 2000 and 2011; Gothenburg, Haparanda, Kalmar and Karlstad. By means of a matching method we first identify non-entry municipalities that have a similar probability of IKEA entry as the true entry municipalities. Then, using these non-entry municipalities as a control group, the causal effects of IKEA entry can be estimated using a treatment-control approach. We also extend the analysis to examine the spatial impact of IKEA by estimating the effects on retail in neighboring municipalities. It is found that a new IKEA store increases revenues in durable goods trade with 20% in the entry municipality and the number of employees with 17%. Only small, and in most cases statistically insignificant, negative effects were found in neighboring municipalities.It appears that there is a positive net effect on durables retail sales and employment in the entry municipality. However, the analysis is based on data on an aggregated municipality level and thereby it remains unclear if and how the effects vary within the entry municipalities. In addition, the data used in the first study includes the sales and employment of IKEA itself, which could account for the majority of the increases in employment and retail. Thereby the potential spillover effects on incumbent retailers in the entry municipalities cannot be discerned in the first study.IIITo examine effects of IKEA entry on incumbent retail firms, the second paper in this thesis analyses how IKEA entry affects the revenues and employment of local retail firms in three municipalities; Haparanda, Kalmar and Karlstad, which experienced entry by IKEA between 2000 and 2010. In this second study, we exclude Gothenburg due to the fact that big-box entry appears to have weaker effects in metropolitan areas (as indicated by Artz & Stone 2006). By excluding Gothenburg we aim to reduce the geographical heterogeneity in our study. We obtain control municipalities that are as similar as possible to the three entry municipalities using the same method as in the previous study, but including a slightly different set of variables in the selection equation. Using similar retail firms in the control municipalities as our comparison group, we estimate the impact of IKEA entry on revenues and employment for retail firms located at varying distances from the IKEA entry site.The results generated in this study imply that entry by IKEA increases revenues in incumbent retail firms by, on average, 11% in the entry municipalities. In addition, we do not find any significant impact on retail revenues in the city centers of the entry municipalities. However, we do find that retail firms within 1 km of the IKEA experience increases in revenues of about 26%, which indicates large spillover effects in the area nearby the entry site. As expected, this impact decreases as we expand the buffer zone: firms located between 0-2 km experiences a 14% increase and firms in 2-5 km experiences an increase of 10%. We do not find any significant impacts on retail employment.

Extended local labor markets due to high speed trains : Visualization of estimations in the Swedish national travel demand forecasting tool, SAMPERS

Wider economic benefits resulting from extended geographical mobility is one argument for investments in high-speed rail. More specifically, the argument for high-speed trains in Sweden has been that they can help to further spatially extend labor market regions which in turn has a positive effect on growth and development. In this paper the aim is to cartographically visualize the potential size of the labor markets in areas that could be affected by possible future high-speed trains. The visualization is based on the forecasts of labor mobility with public transport made by the Swedish national mobility transport forecasting tool, SAMPERS, for two alternative high-speed rail scenarios. The analysis, not surprisingly, suggests that the largest impact of high-speed trains results in the area where the future high speed rail tracks are planned to be built. This expected effect on local labor market regions of high-speed trains could mean that possible regional economic development effects also are to be expected in this area. However, the results, in general, from the SAMPERS forecasts indicaterelatively small increases in local labor market potentials.