SELECTION, PLANNING AND MANAGEMENT OF FOREIGN DISTRIBUTORS IN RUSSIA

Abstract

The volume of international trade is growing constantly, and Russian market has big potential for exporters due to rising wealth of population and its big size. Finnish principals also consider Russia as the most attractive market for Finnish companies. Nevertheless, Russia stays a difficult country for doing business because of corruption, non-transparency of companies and insufficient protection of intellectual property. Moreover, there are limited number of empirical studies related to manufacturer’s selection of distributors. Therefore, by choosing Russia as a target country for the study, this thesis is aimed to fill part of this research gap. Also this thesis contribution is to present recommendations for a Finnish manufacturer exporting to Russia using local distributors.

The research question of this thesis is to analyze how selecting, planning and managing foreign distributors is made in Russian market. To complete the goal of constructing a theoretical framework, environment scanning of Russia was analyzed, and relevant literature was reviewed. By conducting interviews with a Finnish manufacturer and two its Russian distributors, empirical evidence was added to the study. The case companies were chosen due to their experience of cooperation between an overseas manufacturer and its local distributors in Russia.

As a result, Russian context was found to be specific due to its economic, social and cultural aspects. These aspects influence selection, planning and management of Russian distributors, so they should be considered by a foreign distributor. Furthermore, recommendations for the Finnish manufacturer were presented. Managerial implications were proposed for foreign companies exporting their products to Russia using distributors; moreover, directions for further research of the topic were listed.