eThesis - School of Business electronic theses

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This thesis is concerned with Finnish food companies and their logistical strategies regarding doing business in Russia. However it is not intended solely for food companies per se, rather it is a compilation for companies interested in expanding into Russian markets of diverse best practices and applications describing ways to deal with arising trials and tribulations in terms of logistics after the 1998 crisis in Russia.

Unique trading and business relations of Finnish companies, especially food companies in Russia can be traced to the times of Czar, when Finland was an autonomous region, but a part of the Russian Empire. It was always of great concern for Russia and subsequently for its business partners to develop reliable distribution networks and systems, which is why this writing presents an overview of developments of Finnish food companies in the context of Russian culture, as well as in the context of popular and approachable theories and frameworks of logistics.

The essential question of the study was to understand if there is a correlation between the types of operations Finnish food companies and their logistics arrangements in Russia. The findings include a model proposition. This model states that due to the nature of the fast paced business environment in Russia it is viable for Finnish food companies to develop a combination of local presence in the form of own production and outsourcing techniques, while primarily focusing on the core activities of the firm. Other types of activities are however subject to more flexible logistical considerations. These outcomes were concluded based on secondary research and primary research based on interviews, questionnaires and personal discussions with knowledge holders of the industry.

Additionally, various problems are discussed regarding logistic operations of Finnish food companies in Russia. The major concerns were reported to be traffic congestions in the metropolitan areas, such as St. Petersburg and Moscow.