Effect of Danish Boycott

In Saudi Arabia people responded to the controversial cartoons published in the Danish and Norwegian media by boycotting the Danish and Norwegian products.

The boycott happened by all most all supermarkets with support of consumers. According to the article that was published in Arab newspaper, in Saudi Arabia, it mentioned that the manager of a flagship supermarket in Jeddah said "imported Danish dairy products accounted for about five percent of their sales in product volume but more in terms of income."

Referring to Porter's five forces, that buyers have the power to play competitors off against each other which ending up affecting the profitability of the industry. It also mentioned that a buyer group is powerful if several characteristics are met, some of which I will be discussing that are related to the Saudi boycott of the Danish products.

First characteristic is when the buyer group is concentrated or purchases large volumes relative to seller sales. Referring to the article it says that the Danish products consist of five percent of their sales in product volume but more in terms of income. Hence, 5% as diary Danish products is not small share, these only Danish products from the diary industry.

Second characteristic is, if the products are standardized or can't be differentiated. In the article it mentioned that "supermarkets labeled the shelves indicating that Danish products have been withdrawn: and in other Shelves were fully stocked with familiar Danish products," added later that customers' feedback toward that was positive and switching to other substitutes was normal. Also considering the buyer power of wholesalers and retailers, where in our case supermarkets chains were very influential on consumers' purchasing decisions. Referring that to Porter said "retailers can gain significant bargaining power over manufactures when they can influence consumers' purchasing decisions.

According to Hamel's business concept innovation, customer interface is how the producer and consumer reach one another.

Relationship dynamic is one element of customer interface which is the relationship between producers and customer. In this case, a boycott Danish product was very effective and influential for the reason that relationship between the Danish companies and the customers was very weak. You can say there was no firm chain that interconnects them.

Another element of customer interface is fulfillment and support which are another reason behind the effective boycott in Saudi Arabia. The Danish companies were not responsive to their customers in such a way that could stop the Danish newspapers or even do anything that could survive their market shares in Saudi Arabia. The Danish companies heavily depended on agents in the Saudi market rather than establishing their main offices in the country and have better insight about the market and its customers.