Internationalization of the Ethnic Food Industry

Abstract

Small companies from newly emerging markets are usually limited in their growth strategy by lack of market in their own countries. This is mainly due to low purchasing power of the population in their countries. Therefore the companies seek possibilities to grow by establishing themselves on foreign markets. However, due to insufficient resources, the SMEs are not in a position to do enough research on the nature of the new environment they will be faced with. As a result, they do not actually know how to position themselves strategically in terms of marketing efforts. The purpose of this thesis is to investigate the ethnic food segment of food industry and to analyze how a small foreign company manufacturing ethnic food can position itself strategically on the Swedish market. We have used a South African SME -- Ethnic Cuisine Investment Ltd (ECI) as our case company. In order to analyze the elements of importance in ECI’s strategy, we briefly investigated the macro-environment in order to identify the drivers in this industry. However, our main focus is on the ethnic food segment of food industry, in order to understand its logic. We also scrutinize the firm’s resources and capabilities, so that we can identify the gaps that need to be filled in order for it to succeed in the Swedish market. The complexity and dynamism of the Swedish market for ethnic food poses several challenges to a small foreign actor. Thus to act efficiently, the company will need to be very committed and goal oriented. The success of the small actor entering this market will depend on how well the company can organize itself in order to achieve effectiveness in its operations.