Strategic Actions of Incumbent Firms to Deter Market Entry in the Finnish Grocery Retail Market : an analysis of how incumbent firms deter market entry in Finland’s grocery retail sector
Vauhkonen, Paavo (2026)
2026
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https://urn.fi/URN:NBN:fi:amk-2026050810452
https://urn.fi/URN:NBN:fi:amk-2026050810452
Tiivistelmä
The goal of this thesis is to examine what strategic actions incumbent firms may use to deter market entry in the Finnish grocery retail market. The thesis focuses mainly on S-Group and Kesko, which are the two biggest grocery chains in Finland. The research question is: What strategic actions do incumbents in the Finnish grocery retail market use to deter entry?
The thesis uses a qualitative and theory-guided approach and is based on secondary data only, including academic literature, company publications, market statistics, industry reports, and public news sources. The empirical analysis is built around three main themes that are covered in the theory section: distribution and market access, customer loyalty and switching costs, and cost advantages.
The findings show that entering the Finnish grocery retail market is challenging because the incumbent firms benefit from several advantages at the same time. Distribution and market access are strengthened by widespread store networks, centralized purchasing, supplier relationships, and a nationwide logistics system that covers the whole market. Customer loyalty is supported by loyalty programmes and other monetary benefits, which may increase switching costs and make it harder for consumers to switch to a new entrant. Cost advantages are the results of a large scale, strong purchasing power, and more efficient operating systems.
The findings in the thesis suggest that the combined impacts of various strategic mechanisms that enhance the market position of the incumbent firms, rather than a single barrier, prevent entry into the Finnish grocery retail industry.
Keywords: entry barriers, grocery retailing, Finland, market entry deterrence,
strategic barriers, incumbent firms
The thesis uses a qualitative and theory-guided approach and is based on secondary data only, including academic literature, company publications, market statistics, industry reports, and public news sources. The empirical analysis is built around three main themes that are covered in the theory section: distribution and market access, customer loyalty and switching costs, and cost advantages.
The findings show that entering the Finnish grocery retail market is challenging because the incumbent firms benefit from several advantages at the same time. Distribution and market access are strengthened by widespread store networks, centralized purchasing, supplier relationships, and a nationwide logistics system that covers the whole market. Customer loyalty is supported by loyalty programmes and other monetary benefits, which may increase switching costs and make it harder for consumers to switch to a new entrant. Cost advantages are the results of a large scale, strong purchasing power, and more efficient operating systems.
The findings in the thesis suggest that the combined impacts of various strategic mechanisms that enhance the market position of the incumbent firms, rather than a single barrier, prevent entry into the Finnish grocery retail industry.
Keywords: entry barriers, grocery retailing, Finland, market entry deterrence,
strategic barriers, incumbent firms