Internationalization of innovative Finnish food sector companies

Abstract

Internationalization provides firms a significant opportunity for growth and value creation worldwide. Especially those companies that operate in small and open economies tend to benefit from foreign market expansion. For example, the small size of Finland’s economy sets limitations to the domestic market opportunities. In addition to Finland’s macro-level strengths, Finnish companies’ innovativeness has gained attention as a potential sustained competitive advantage to support firm internationalization. Despite the identified potential, the Finnish food sector’s internationalization has been modest, and the research in this field has been limited. Thus, this thesis studies the internationalization phenomenon in the context of innovative Finnish food sector companies. The purpose of the research is to explore firm internationalization from the process perspective by investigating companies’ time-based decision making and behavior. The thesis aims to find out how and why do innovative Finnish food companies internationalize?

The research was carried out as a qualitative study because the purpose was to form an in-depth understanding of the internationalization processes of Finnish food companies. In addition to the empirical research, an extensive literature review of various internationalization theories was conducted to develop a theoretical framework of the studied phenomenon. A multiple-case study was selected as the research strategy and two case-companies were selected, one representing a young SME and the other well established MNE. Both case companies were of Finnish origin, they operated in the food sector and had experience of expanding into international markets. The research data was collected through semi-structured interviews with company representatives, as well as by reviewing companies’ websites, publications, annual reports, and newspaper articles.

The key findings of this study show that, in line with the initial hypothesis, food companies can utilize different internationalization strategies depending on their internal capabilities and resources. The accumulation of decisions regarding main internationalization dimensions and the actions taken based on these decisions in relation to time showed two different internationalization processes. The MNE had internationalized incrementally in line with traditional internationalization theories. On the contrary, the SME had internationalized early and rapidly on a global level. In addition, the company’s product portfolio was found to have a significant impact on decision-making and company-level behavior. Lastly, the innovativeness and uniqueness of both the products and the company’s know-how were shown to have a positive impact on achieving a sustainable competitive advantage on a global level.