What helps some family businesses last over a century while others fade away?

The enduring success of family businesses often sparks curiosity—how do some survive for over a century while others falter within a few decades? In today’s competitive landscape, longevity is not just about survival; it’s about strategically engaging with external market forces while holding onto core family values. This article explores the historical dynamics that contribute to the longevity of family businesses, using the Swedish firm Karl Andersson & Söner AB as a case study.

What We Studied

‍Our study applies a business history approach to family business longevity, focusing on the evolution of  Karl Andersson & Söner, a fourth-generation Swedish furniture manufacturer. We examined over 120 years of company data, including interviews with family members, archival materials, and oral histories, to understand how KAS navigated changes in market categories and maintained its family-driven business model.

Key Insights

1. Internal and External Mechanisms‍

The longevity of  Karl Andersson & Söner was driven by both internal family values and external market category dynamics. While many businesses were forced to abandon family-driven strategies,  Karl Andersson & Söner maintained its craftsmanship, aligning with the growing Scandinavian Design category. This balance allowed it to adapt without losing its identity.

2. Engaging with the Market Category

‍KAS played an active role in shaping the Scandinavian Design category by collaborating with renowned designers like Carl Malmsten and Börge Mogensen. These partnerships helped the company stay relevant in a competitive market and contributed to the broader category’s development.

3. Adapting to External Pressures

‍During the 1970s, KAS faced increased competition from low-cost manufacturers like IKEA, leading it to pivot toward high-end markets such as public and corporate clients. This flexibility in customer focus was key to maintaining the company’s high-quality production standards.

Takeaways

1. Family-Driven Values Sustain Success

‍The consistent emphasis on quality craftsmanship and design, rooted in family traditions, has been a critical driver of  Karl Andersson & Söners longevity.

2. Strategic Collaborations Matter

‍Partnering with industry leaders helped KAS not only survive but thrive, even in a saturated market.

3. Adaptation is Key to Survival

‍Shifting focus from price-sensitive private customers to public and corporate markets allowed  Karl Andersson & Söner to continue growing despite industry-wide challenges.

Impact

‍This study sheds light on the critical balance between staying true to family values and adapting to external market pressures. For family businesses, especially those operating in competitive industries, the key to longevity lies in finding ways to engage with their market while maintaining their identity. Future research could explore how other long-lasting family firms manage these dynamics across different industries.

Recommendations

‍Family businesses should consider forming strategic partnerships early in their development, as these alliances can open doors to new markets and protect against competitive pressures. Additionally, focusing on niche markets, like  Karl Andersson & Söner did with public sector clients, can offer long-term sustainability.

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