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ISHS Acta Horticulturae 1132: XVIII International Symposium on Horticultural Economics and Management

Competition on a local market – a historical study of market gardens in Stockholm

Author:   I. Olausson
Keywords:   garden history, family businesses, generic strategies, Sweden, Michael Porter
DOI:   10.17660/ActaHortic.2016.1132.18
Abstract:
In the period 1880-1930, interest in gardening products rose substantially in the Swedish market. The import of horticultural produce as well as domestic production increased by 20 times. The competition on the market for horticultural produce significantly increased from the 1930s. The costs of fuel and labor rose, and imports took a larger share of the Swedish market as the century progressed, except during the wars. Competition was stiff from countries with lower production costs. After World War II, a series of measures were introduced to stabilize the world economy and kick-start trade. These included the first General Agreement on Tariffs and Trade (GATT), which intended to boost international trade by reducing customs, duties, and trade quotas. At the negotiating table, Sweden was particularly anxious about the export opportunities for major industries. This meant easing imports for some products for the sake of the balance of trade, and one category sacrificed was horticultural products. This resulted in a backlash for the market gardens, and the number of market gardens decreased in favor of large-scale, modern companies with a rationalized and specialized production, often situated in southern Sweden. However, there are examples of small-scale family businesses that survived competition from large-scale companies, increasing imports, and rising costs of fuel and labor. These businesses adapted their production to the demands of local markets. Two of these have been reviewed in case studies: Nilsson's market garden on Runmarö in the Stockholm archipelago, founded in 1929, and Nora market garden in Danderyd, founded in 1938 and still run by the Welander family. Referring to M. Porters generic strategies, Nilsson had a focused strategy, providing a custom range of products to wealthy summer visitors in the Stockholm archipelago. Welander had a differentiated approach, selling products of superior quality, with customers including a delicatessen in Stockholm.

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