Adding value to gain competitive advantages : agricultural and horticultural firms’ corporate strategies to create wealth

Abstract: The interest in locally produced food is high among Swedish consumers. Yet so, many farmers struggle to be profitable and competitive. The food market has many different competitors, and therefore competition is fierce. For companies that want to stand out, clear strategies focusing on highlighting the uniqueness and creating customer value are required. The European Union have developed a common agricultural policy (CAP), which aims to let the market control the production, and it emphasises Multifunctional agricultural (MFA) companies as a good alternative. Entrepreneurship, diversification and value-adding activities are some examples of what companies can focus on to become more competitive. Smaller companies that lack the competitive advantage that many of the larger companies possess can, by working with entrepreneurial strategies, focus on creating customer value, differentiation, and niche products that provide unique and strong competitive advantages. The purpose of the study is to investigate and highlight small Swedish agricultural and horticultural firms’ corporate strategies to create competitive advantage. The focus is success factors and value-added activities. Common to the participating companies is that they have chosen to move up the value chain, and instead of only producing, they produce, process and market the products under their own brand. Semi-structured interviews with three companies with different orientation and size make the basis for the data collection. Thematic analysis was used to analyse the material, and the analysis resulted in four themes: concept, brand, important assets, and sustainability. All entrepreneurs have chosen to differentiate themselves by creating their own brand, where the farm’s concept is highlighted. The concept permeates all parts of the company and has a clear focus on quality, service, communication, and dialogue towards the customers. Being a transparent and open company has come naturally since the establishment of all companies, and is something that they still emphasise. Much of the dialogue with customers is based on being open with how the products are produced and who the farmer is. The most important resources are the employees, the geographic location, and the owners' characteristics and skills. Entrepreneurship constitutes a major part of the success factor. Seeing opportunities, courage to try new ways, not to be afraid of mistakes, and to be constantly on the lookout for new ideas are the basis for their success. The results show it is possible to create sustainable competitive advantage by adding unique value to ordinary food products. Due to adding high quality, good service, and aiming for an open dialogue with the customers, agricultural and horticultural companies can create niche products being interesting even in a competitive market where a lot revolves around price. It should be noted that the strategies mentioned in the research are not a “quick-fix” and it is not a risk-free solution. For the strategy to be successful it should be underpinned by a thorough analysis of the market, customers, and competitors. Understanding and master entrepreneurial thoughts have been proved to be of considerable character if one should find, retain, and develop key success factors.