Issue Iss4 2008
Hämeenmaa is a business founded on co-operative principles
Hämeenmaa is one of Finland’s 22 regional co-operative societies, which unite to form the S Group. The S Group operates through a regional structure, which consists of these regional co-operatives and Suomen Osuuskauppojen Keskuskunta (SOK), which is its central organisation. Offering basic customer-owner services through locally managed chains, these regional co-operative societies, such as Hämeenmaa, are owned by their customer-owners. The company’s mission is therefore, to produce competitive advantages and services for these customer owners. Indeed, around 80 per cent of the S Group’s retail business is run by regional co-operatives, and Hämeenmaa operates a considerable number of stores and currently employs approximately 2300 people.
2008 promises to be a good year for the organisation. Hämeenmaa continues its strong focus on business development, and the group’s turnover is expected to grow. New stores have been opened and significant investment has been made into new and larger premises for some existing locations.
The S Group operates in seven different areas, which includes the grocery trade, full service stations and fuel sales, specialty goods trade, hotels and restaurants, motor trade, agriculture, and hardware and gardening. Of these business areas, the grocery trade is the largest. The company operates many hypermarkets, supermarkets and smaller convenience stores. SOK is also committed to attending to the management and supervision of the S Group’s overall resources for maximum efficiency. SOK monitors, within the framework of the Co-operatives Act, the operations and best interests of the S Group and its constituent organisations.
Throughout their history spanning more than 100 years, small co-operatives and their central organisation SOK have grown to become a robust group of companies operating on the co-operative principle in Finnish society.
In accordance with its statutes, SOK’s task is to promote and develop the operations of the co-operative societies and other organisations belonging to
the S Group. SOK is in charge of the S Group’s strategic guidance, providing the S Group companies with services related 44to supply chain management, membership and marketing along with general and corporate services, including development activities connected with these services and the SOK’s retail operations.
Other important services for the SOK’s operations are purchasing, rental services and invoicing services for goods delivered directly from manufacturers to the units. Via its nationwide and regional co-operatives, S Group is able to offer its members a wider spectrum of services. In addition, in the Baltic area SOK engages in the hypermarkets, superstore and has three hotels business in St Petersburg. The value of the sales of SOK’s Baltic companies was around 200 million euros in 2005.
The need to establish co-operatives was borne out of the necessity to get quality goods at reasonable prices. Today, the organisation’s objectives remain unchanged: to supply customers with necessary goods and services, easily and inexpensively. Nowadays, the range of services provided by the S Group and its partners cover the fundamental needs of households.
The four pillars of S Group strategic thinking are:
- A focus on customer-owners
- Cost efficiency
- A comprehensive and actively evolving network of locations and a diverse range of services
- Competence development, information-based management and networks of co-operation
The S Group refers to socially responsible business activities that are close to the customer-owner as ‘a people-first market economy.’ The primary cornerstones of its business operations are the co-operative ideology, Finnishness, regionality and the human angle. The fact that customer-owners know the Group’s management, supervisors and staff and that they can easily get in touch with them is another facet of doing business with a human touch.
However, the operational efficiency of a business enterprise is an equally vital aspect of a people-first market economy. In practice, this means a reasonable price level combined with good quality and the ability to pay customer-owners bonuses. The company’s success therefore has a mutual advantage.
Business operations rooted in the co-operative ideology differ in several ways from other forms of business. The principles intrinsic to co-operative ideals – open membership, democracy and the distribution of profit, in other words, the members’ share of a company’s profit – constitute the basis for doing business.
Co-operative enterprises are simultaneously business enterprises and their members’ communities. Above all, co-operative activities within the S Group stand for business that focuses on the customer-owner, close to the ordinary person. The regional and Finnish nature of activities means, for instance, that the regional co-operative enterprises are responsible for business operations. Moreover, the S Group cannot be sold to foreign ownership, though it is international on many fronts.
Hämeenmaa attributes its achievements to the business model of the S Group. Its well established business concepts have given it increased purchasing power and enabled the company to broaden its offering, expanding into previously unexplored areas such as the motor trade and hardware. Being part of the S Group has seen Hämeenmaa reach new heights of success, and this looks set to continue into the future.