Abstract: Resistance to Inequality as a Competitive Strategy: The Case of the Finnish Consumer Co-op Elanto, 1905-2015

Anitra Komulainen and Sakari Siltala

Abstract

The resistance to inequality is deeply rooted in the co-operative ideology. Has this been a competitive factor, or rather a disadvantage? Is the cooperative business form itself a factor in explaining successes and failures? By examining a Finnish consumer co-op Elanto, we are looking into the rise and fall of consumer co-ops in Europe during the last 100 years. Elanto was established in 1905 to improve quality of products and working conditions in stores. It expanded to a big and successful consumer cooperative. However, Elanto lost its competitiveness and its core value of equality during 1970–2000, but found them again in the 21st century and reached a market share of over 45 percent.

It seems that neither the degree of centralization, the amount of capital, the success of succession, or the filling of a market gap do not alone explain much. Therefore, we will examine value innovation, a unique strategy that creates powerful leaps in value for both the firm and its clients. The theory is called the Blue Ocean Strategy and is developed by W. Chan Kim and Renée Mauborgne. Our study suggests that the business form or organization has only partial explanatory power, and that the value innovation strategy seems to be the crucial competitive factor.

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