You hear of pressure in the market place on businesses and you recognise the dynamics facing small, medium and large enterprises especially in the current economic environment. An environment that today sees mergers of larger businesses into the global corporate world – Arla takeover of Milk-link (merger? No takeover). An environment where smaller businesses, fleet of foot but not necessarily greedy for profits and expansion but delivering service, style and content succeed. Which leaves the medium sized business with a dilemma so succinctly put by an annual Agriculture & Rural Industries report published last year by MTT in Finland:
Structural changes in the retail sector have created serious challenges to the domestic food industry. It is difficult for the processing sector to preserve its negotiation power against the concentrating retail chains. As they aim for higher efficiency in logistics, the retail chains concentrate their purchases to large processors, but the structural changes in the trade sector are a great challenge to the large food companies as well.
The domestic food producers should produce higher volumes through more cost-efficient means. Only the largest companies with significant nation-wide market shares are able to take full advantage of the economies of scale. Instead, small enterprises have the opportunity to respond to consumer needs through special products and supply of fresh products on the local market. Medium-sized enterprises are the most vulnerable ones, because the product range they offer is usually very similar to the range offered by the large competitors. “