Over the years many people have gone to IKEA to purchase furniture and fixtures, making IKEA the world’s number one furniture retailer. Among the extras at the furniture store is a restaurant and play area for the kids. In the last week, the little meatballs that are in the restaurant in the European stores, have tested as pork, beef and horse meat. The stores in non European countries are supplied by a different supplier and are unaffected. However, they are affected because most consumers will not know, they will see the headline of horse meat in the meatballs and automatically believe that their IKEA is affected. The issue for IKEA will be how does it communicate and ensure that horse meat is not part of any of its products? and why was horse meat included in the first place? In the IKEA example, the sale of meatballs is a very small percentage of the business, but when you add the phrase Swedish meatballs and link it to IKEA the Swedish company, the issue does not seem so minor after all, the issue is connected to IKEA’s brand awareness.

Linking to dividend producing companies, while most of the time the concentration will be on growing market share, ensuring high margins, profitability and paying the dividend, it is important to ask how does or how did the company deal with its problems? These days, just about every phone comes with a camera, people use them. Prior to cameras, many issues were dealt with differently, now companies have to deal with the issues openly. When consumers feel the company did them wrong, the camera is used. How companies deal with complaints and problems is an important consideration for investing in a company.

There are more questions than answers, till the next time – to raising questions