Summary
The use of organic food in Sweden has gained popularity as it is evident in its rising market (KRAV, 2016) . The organic food market is expected to rise in the coming years according to the recent studies that have been made. The Swedish people are becoming more aware about the dangers involved in consuming non-organic foods which has made them turn to organic foods. The Swedish organic food market is getting competitive as many local stores in the country are starting to sell organic foods due to its increasing demand (Ranninger, 2014) . The two main key players who are competing with each other are the ICA and COOP. What make these stores competitive are mainly the prices of the products they deal in. The organic food market in Sweden has been occupied by ICA, COOP and Axfood and the small retailer stores have to struggle to get a place in the market. Online stores are also coming up and taking over the organic food industry. Due to the growth of this market, new stores are coming up and the already established stores such as ICA and COOP are investing more to have a competitive advantage over their competitors (Gauger, Deichmann and Fitz-Koch, 2016) .
The main purpose of this study is to analyze the competition of the organic food market in Sweden and make an analysis of the industry. The organic food market in Sweden has been growing and the trend is expected to go on (Klint, 2016) . The Swedish people are increasingly becoming aware of the importance of using the organic foods to protect their health and their environment. Due to the rising demand of the organic food, many retailer shops are grabbing the opportunity to enter the market. The existing stores are investing in resources to expand their markets lest new stores take over. The organic food market in Sweden has been taken over by few stores which has made it hard for other retailer shops to enter the market. The strength of the Swedish organic food market is determined by some forces which include; threat of new entrants in the market, bargaining power of both the suppliers and consumers, the stiff competition among the existing retailers and the threat of substitute products and services.
Delegate your assignment to our experts and they will do the rest.
The researchers have studied the research question adequately because they have all the facts about the Swedish organic food market. They took time to conduct interviews among the selected firms so that they can have accurate information. Apart from collecting primary data from the fields, they used secondary data from books, journals and academic articles from the University library to supplement their results. The results of the study are that the organic food market in Sweden is highly concentrated because only few companies are holding the largest market share. The study also reveals that the new entrants are finding it hard to penetrate the market because of the barriers that have been set by the already existing companies. These new firms have to invest in a lot of resources so that they can weaken the barriers. The researchers also learnt from the study that the organic food market is getting competitive because many stores are coming up to fill the demand of this market. These stores deal with almost similar products and what makes them competitive is the price of their goods.
Main Critique
The study shows that the existing stores in the market have to invest in a lot of resources and technology so that they can strengthen the barriers for new entrants not to take over their market share. The study also shows that the competing stores always keep track of their competitors’ progress so that their market share will not be taken over. According to the study, when one store reduces its price of the organic goods, this affects the whole market because customers will rush to buy the products from this store. The other stores retaliate back by reducing the price so that they will not make loses.
This study is important to many groups who have interest in knowing the trend of the competition and industry analysis of the organic food market in Sweden. These groups include the customers, the suppliers, competitors and the firms and companies that want to venture into the industry. This study is important to the customers because they become are of the current situation in the industry. The customers know about the stores that offer the best bargains and which offer quality products at a lower price. The research also helps the suppliers know of which stores offer the best bargains and get aware of the markets that they have not explored yet. The suppliers of these organic foods know about the retailer stores that are leading in this industry and this will make them approach them to supply their products. The study shows that the industry of organic foods is growing and it is expected to do so in the coming years. This is a great relief to the companies that deal in these products because they are assured to increase their profits.
The researchers used questionnaires, telephone interviews and face to face interview to conduct their research. The researchers also used books, journals and academic articles to get secondary information. The research was conducted in four firms that are already established in the industry. These firms are COOP, ICA, COOP Green Room and Bikuspan which is a smaller stall unlike the others which are larger retailer stores. In ICA, the researchers used a questionnaire to collect the relevant information, in COOP and COOP Green Room they used telephone interview while in Bikuspan they conducted a face- face interview. The researcher could have physically visited the other stores but distance was a limiting factor. The telephone interviews conducted were uninterrupted therefore increasing the validity of the information. In Bikuspan retailer shop, there was interruption from the customers who came in to shop in the store.
The information from this research is not reliable because the interviewees may not reveal the correct information over the phone. The interview may also not be clear due to network failure or other technological hitches. Very few interviewees will be willing to expose the correct information about their store over the phone to a stranger. Telephone interviews are not the best source of information because the information got may be not reliable. They should have made an effort and travel to conduct a physical analysis of the stores or use face-face interviews in all the stores just like they did in Bikuspan. Despite them using face- face interview in Bikuspan, there was interruptions from the customers who walked in and out of the store to purchase the organic foods. These interruptions may reduce the reliability of the data collected because the interviewee may answer the questions quickly so that he can attend to the customers.
This paper does not offer sufficient information about the competition in this industry and what the new entrants need to do to overcome the barriers set by the existing market. This study is does not cover the entire market because very few firms were selected for the research. They only selected the firms that are doing well in this industry and leaving out the rest. They could have been fair if they incorporated less profitable stores so that we could learn what they are doing wrong to lose their market share. The fact that they chose the top stores creates an image that all the stores are performing well which might not be the case. The results derived from Bikuspan store were used to generalize the other small and local stores in the country. It is not right to use one firm’s data and conclude that the same trend is in the other stores. Every store is unique and has its own strategies to conduct its businesses (Myte, 2012) .
Conclusion
The main lesson that I learn from this study is that organic foods are healthier than the non-organic foods and they help in conserving the environment better. The study helps me know about the trend in this industry because I have an interest in exploring this market in the near future. I learn that it is possible for smaller stalls to make it in an industry that has been dominated by the larger retailer shops only if they come up with better strategies. The study also helps me learn that substitute products may have the same value but at a reduced cost which will help me save a lot of money when shopping for the organic foods. This study is relevant to me because I am aware of the stores that I will visit to shop for organic foods in case I visit Sweden. The same trend being experienced in the organic food market in Sweden might be the same globally and therefore, many people worldwide will know how to respond to the changes being experienced in this industry.
References
Myte, R. (2012). Competition in the Swedish Food Retail Industry . 1st ed. [ebook] pp.1-27. Available at: https://www.diva-portal.org/smash/get/diva2:537636/FULLTEXT01.pdf [Accessed 1 Dec. 2016].
KRAV, (2016). Krav Market Report 2016 . 1st ed. [ebook] pp.1-44. Available at: http://www.krav.se/sites/default/files/krav_market_report_2016_eng_webb.pdf
[Accessed 1 Dec. 2016].
Ranninger, N. (2014). Growing demand for organic food in Sweden. Food Alert . Klint, D. (2016). Sweden: Organic food sales up 40% in 2015. Fresh Plaza .
Gauger, S., Deichmann, J. and Fitz-Koch, S. (2016). The Swedish Organic Food Market : A Competitor and Industry Analysis . [online] Diva-portal.org. Available at: http://www.diva-portal.org/smash/record.jsf?pid=diva2%3A530452&dswid=-2920 [Accessed 1 Dec. 2016].
