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ABSTRACT

Date:       June 4^th, 2010

Title:       The Marketing Entry Strategies of Sandvik Mining in Serbia and Macedonia

Course:    Business Administration

Program: Bachelor Thesis in Business Administration

Authors:  Enock Ofori-Mensah, Sarkaut Karimi & Magdi Elhadi

Supervisor: Prafulla Acharya

Examiner:  Ole Liljefors

Introduction:  Sandvik AB was founded in 1862 by Göran Fredrik Göransson who is the first person in the world to use the Bessemer method in steel industry. Sandvik Group is considered to be a world-leading company which produces high-technology products and has achieved a global business status in more than 130 countries throughout the world. The company sales as at 2009 was 72 billion SEK and boost of 44 000 employees. As a result of the close integration of the production, administration and distribution systems, approximately 70% of the Sandvik Group’s sales are delivered to customers within a week from order. To ensure maximum customer value, R&D at Sandvik involves leading state-of-the-art technology, dynamic patent activities and extensive added value. During the last few years, couples of companies have been finding it difficult to gain a competitive position in foreign markets due to the intense competition from suppliers and competitors and also their failure to conform their marketing strategies to the countries they enter and as a result fail drastically. Companies face a lot of dilemma on which entry mode strategies to adopt when entering new foreign markets. Some pay much attention to their resources whilst others also evaluate the total cost involved in entering the market against the level of profit they will achieve in that markets. For these reasons, the main aim of this research work is to try to identify and describe some of the entry strategies models companies should consider in their internationalization process.

Problem: How has Sandvik Mining Industry entered into Serbia and Macedonia?

Sub questions;

-          What difficulties had Sandvik faced in implementing their entry strategies in these two countries?

-           How and whether participants/interviewees perceive the entry strategies as successful or not?

Purpose: The main objective of this research is to identify, describe and analyze the Marketing entry strategies of Sandvik Mining in Serbia and Macedonia.

Method: In this research work, both qualitative and quantitative research methods were used but most of this research work was based on qualitative research method. The qualitative research was in the form of primary data based on interviews, questionnaire and personal contacts with the sales/marketing manager, Mr. Johan Dotzauer. On the quantitative method, we used secondary data such as Journals, books and the financial information of Sandvik Mining to analyze Sandvik Mining international process as well as in evaluating the success of their internationalization process in Serbia and Macedonia markets.          

Conclusions: In conclusion of this work, we found out that the exclusiveness and the technicality of Sandvik´s products and their thirst for having a strong competitive advantage drives them more and more towards the resource based theory and also partially the network approach in their foreign market entry process. That’s Sandvik Mining adopted two or more entry strategies in its internationalization Process to Serbia and Macedonia Markets. In addition, Sandvik competitive advantage over its rivals Caterpillar and Atlas was due to its resources in the form of infrastructure, hi-tech products and high scaled sales force team. The success of Sandvik Mining entries to Serbia and Macedonia as at now cannot be concluded as successful by us. This is due to the unavailability of the 2010 financial statements for these two markets.

Keywords: Resource Based Theory, Uppsala Internationalization Model, Network Approach and Eclectic/Transaction Cost Approach.