INTERNATIONALIZATION OF FINNISH FOOD INDUSTRY COMPANIES TO RUSSIAN MARKETS

Abstract

Competition in the Finnish food industry is very high and the potential for the growth is minimal, when at the same time potential in the Russian market is tempting. This research will describe the process of Finnish Food Industry companies internationalizing to the Russian market. The goal of the study is to come up with guidelines that could help new companies penetrate to the Russian market. The focus will be on internationalization theories and operation mode theories. Market and industry specific factors are also analyzed. The study is made from the perspective of the Finnish food industry.

Previous studies can be found on the subject but since the changes in the market are fast, a more recent study is needed. For the reason that the market is changing fast, materials used for this paper are relatively new. The goal of this study is to better understand the internationalization of Finnish food industry companies to the Russian markets and what things should be considered. The material for the study was collected with semi-structured interviews. All the interviewed companies have operations in Russia and the interviewed persons are in key positions in the companies.

We can see that that the process towards a more international business environment in Russia has started and the country is now part of the WTO. The process is slow and many problems such as corruption and high bureaucracy still exist in the Russian markets. Finnish food industry companies should analyze their resources and tolerance for the risks before entering. Enough information and knowledge should be acquired before entering the markets. Language skills and culture knowledge in Russia are essential. Companies should be prepared for the problems that will most likely occur when operating in Russia. Most of them are Russia’s internal problems and not so much can be done but to be prepared.