Alcohol advertising restrictions in Finland: How changes in the operating environment affect business strategy

Abstract

Research Objectives:

The purpose of this study is to understand the effects of change in the operating environment on the strategy of firms acting in that environment. To study this phenomenon, this research addresses the effects of the new alcohol advertising restrictions (instated in 2015) on the business strategy of alcoholic beverage producers in Finland. To understand how a regulatory change in the environment impacts Finnish alcoholic beverage producers' strategies, the study aims to find out what the firms' strategy processes are, what the relationship between the operating environment and the firm is and how they impact each other, and how change is dealt with in the current dynamic environment.

Methodology:

The empirical data for this study was compiled from six semi-structured interviews with top management team members from some of the largest Finnish alcoholic beverage producing firms. The respondents were selected as they have thorough knowledge and insight on the inner-workings of their respective firms' strategy processes and relationships with the operating environment, and are the central decision makers in the industry and thus play a direct role in the future of the business. The interviews were interpreted through thematic analysis using a systematic coding process.

Findings:

The findings of the study indicate that change in the operating environment has an impact on firm strategy. It is suggested that the greatest impact of environmental change is on the execution of firm strategy, rather than the strategic visioning and position of the firm in the market. Changes in the environment require firms to either adapt their internal resources or obtain new, relevant ones in order to meet the demands of the changed environment, which in turn requires close monitoring of the environment. The findings also suggest that feedback effects exist between firm behavior and the environment. Frequent environmental change results in firms developing resources that help them impact the environment in the longer-term.