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Production locations for the internationalising food industry: case study from Russia

Production locations for the internationalising food industry: case study from Russia Purpose – The purpose of the paper is to identify the location decision criteria and their relative weights in the context of food manufacturing internationalisation into emerging markets, and to clarify how supply chain related factors are reflected in the location decision criteria. Knowledge of these factors is considered crucial in understanding the entry and location decisions of foreign food manufacturers into emerging markets where a high level of operational uncertainty may be evident. Design/methodology/approach – The AHP method is utilised in the creation of a location/investment target ‐model, with input from a panel of decision makers in the Finnish food industry. A real‐life application from the Russian agribusiness industry is presented. Findings – Seven criteria reach above average values, namely economic activity potential (10 per cent), consumption potential (9 per cent), available acquisition targets (12 per cent), adequate supply of raw materials (13 per cent), competitive situation (16 per cent), favourable level of input costs (11 per cent), and SCM readiness and know‐how (9 per cent). The significant weight of the last item and the supply chain related factors in general underscore the total demand‐supply network‐oriented thinking in the food industry. Research limitations/implications – Supply chain considerations are a major factor in the food industry location decisions, due to the need to utilise the local sourcing, distribution and service systems in the economy. The downstream, upstream and related service sectors in the supply chain can thereby serve as constraints for the business expansion process. Originality/value – The research addresses the sparsely researched area of linking a firm's internationalisation decision making with supply chain management issues in the emerging market context. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png British Food Journal Emerald Publishing

Production locations for the internationalising food industry: case study from Russia

Harri Lorentz
British Food Journal , Volume 110 (3): 25 – Mar 21, 2008
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References (105)

Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
0007-070X
DOI
10.1108/00070700810858718
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of the paper is to identify the location decision criteria and their relative weights in the context of food manufacturing internationalisation into emerging markets, and to clarify how supply chain related factors are reflected in the location decision criteria. Knowledge of these factors is considered crucial in understanding the entry and location decisions of foreign food manufacturers into emerging markets where a high level of operational uncertainty may be evident. Design/methodology/approach – The AHP method is utilised in the creation of a location/investment target ‐model, with input from a panel of decision makers in the Finnish food industry. A real‐life application from the Russian agribusiness industry is presented. Findings – Seven criteria reach above average values, namely economic activity potential (10 per cent), consumption potential (9 per cent), available acquisition targets (12 per cent), adequate supply of raw materials (13 per cent), competitive situation (16 per cent), favourable level of input costs (11 per cent), and SCM readiness and know‐how (9 per cent). The significant weight of the last item and the supply chain related factors in general underscore the total demand‐supply network‐oriented thinking in the food industry. Research limitations/implications – Supply chain considerations are a major factor in the food industry location decisions, due to the need to utilise the local sourcing, distribution and service systems in the economy. The downstream, upstream and related service sectors in the supply chain can thereby serve as constraints for the business expansion process. Originality/value – The research addresses the sparsely researched area of linking a firm's internationalisation decision making with supply chain management issues in the emerging market context.

Journal

British Food Journal – Emerald Publishing

Published: Mar 21, 2008

Keywords: Supply chain management; Food industry; Emerging markets; Russia; Finland; Plant location and layout

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