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Internationalization Strategies in the German Dairy Industry and their Influence on the Economic Performance of Firms

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  • Meyer, Johannes
  • Feil, Jan-Henning
  • Schaper, Christian

Abstract

Growing milk production, stagnating domestic consumption and ongoing liberalization of the worldwide milk market have led to increasing exports of milk and milk products out of Germany. This situation heightens competition amongst German dairies for market share on foreign markets. The German dairy industry, which comprises of some international corporations and many medium sized companies, including both cooperatives and privately owned companies, therefore has to find strategies with which to compete successfully on international markets. This study analyzes the German dairy industry comparing different internationalization strategies and their influence on the firms’ economic success. 18 German dairy companies have been analyzed. We identified different internationalization strategies with reference to Perlmutter’s EPRG model. To measure economic success, we analyzed annual reports from the dairy companies observed over the years 2010 to 2017 and so calculated different key figures. The influence of different internationalization strategies on economic success is analyzed by a Hausman Taylor estimation where the EBIT-margin is the dependent variable in our model, representing economic success. We found that German dairy industry companies do pursue different internationalisation strategies and that these have different influences on the companies’ economic success.

Suggested Citation

  • Meyer, Johannes & Feil, Jan-Henning & Schaper, Christian, 2019. "Internationalization Strategies in the German Dairy Industry and their Influence on the Economic Performance of Firms," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 10(04), October.
    • Handle: RePEc:ags:ijofsd:345341
    DOI: 10.22004/ag.econ.345341
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    References listed on IDEAS

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    1. Heyder, Matthias & Makus, Christian & Theuvsen, Ludwig, 2011. "Internationalization and Firm Performance in Agribusiness: Empirical Evidence from European Cooperatives," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 2(1), pages 1-17, September.
    2. Anne-Wil Harzing, 2000. "An Empirical Analysis and Extension of the Bartlett and Ghoshal Typology of Multinational Companies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 31(1), pages 101-120, March.
    3. Qian, Gongming, 2002. "Multinationality, product diversification, and profitability of emerging US small- and medium-sized enterprises," Journal of Business Venturing, Elsevier, vol. 17(6), pages 611-633, October.
    4. N Capar & M Kotabe, 2003. "The relationship between international diversification and performance in service firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(4), pages 345-355, July.
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    Cited by:

    1. Wehner, Jasmin & Feil, Jan-Henning & Yu, Xiaohua, 2024. "Investigating market power in the German dairy industry," Sustainable Food Systems Discussion Papers 347738, Georg-August-Universitaet Goettingen, Department of Agricultural Economics and Rural Development.

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