The Stubai Co-Operative: Using Local Roots for Global Competitiveness
Research Institute for Co-operation and Co-operatives (RiCC), Vienna University of Economics & Business
March 2, 2012
Euricse Working Paper No. 28/12
The Stubai Co-operative, founded in 1897 by several craftsmen and steel manufacturing companies located in the Tyrolean Stubai Valley, has developed in one of the most successful distributors of small steel products in the high quality segment on a global scale. The proposed case study will discuss the reasons for this remarkable success, given that the comparably small Stubai Co-operative is able to challenge big players in the iron manufacturing industry, mainly from the US and the Far East.
The Co-operative combines long-lasting local industrial traditions with a process of advanced professionalization and internationalization. Stubai’s success significantly depends on its legal status as a co-operative, as it provides the optimal framework for the successful collaboration of its members. Through the consistent uniformity of its presence, Stubai was able to establish itself in the international steel manufacturing sector as a brand combining the well-known quality of its products with its locality, the Stubai Valley. In a remarkable use of marketing synergies, the logo of the brand was offered (in a slightly changed version) to the tourism office of the Stubai Valley, thus linking the tourism marketing with the marketing of the Co-operative.
The historical foundations are another facet of the Co-operative’s grounding in the Stubai Valley. The roots reach back to the 14th Century, when the iron production and the iron manufacturing started in the valley. The founding process of the Co-operative is to be seen as an answer to a severe crisis of the market of iron products at that time – where the Co-operative offered better opportunities for the existing small manufacturers – and political interests of the socio-conservatives, who, successfully,
tried to prevent the involvement of a socialist workers movement in the region. Since then, the number of co-operative members has not been significantly modified. The right of membership exclusively belongs to metal processing companies from the valley. To guarantee the necessary pipeline of a specialized, highly skilled workforce, the co-operative also has enabled the foundation of a College for Mechanical Engineering and Manufacturing Technique in Fulpmes, the main place of business. A key to success is the diversity and quality offered by the member companies, which all are specialized on their own products. So, the marketing of a wide range of products under one brand becomes possible. By solely concentrating on local production, the information channels are short, what enables quick responses to new market demands. Furthermore, the Co-operative offers its mainly small sized members the opportunity to bring their products to the world market. At present, the Co-operative records a steady growth. Nevertheless, any substantial growth of the Co-operative is strongly limited by its strict focus on local membership. Therefore, its activities on a global scale are limited to being a niche player. Given the size of its main international competitors and the huge potential of simple economics of scale, this will remain a significant challenge to the Co-operative in the long run.
Number of Pages in PDF File: 16
Keywords: co-operatives, Austria, Stubai, co-operation, tradition and innovation
JEL Classification: D24, K20, L14, L61working papers series
Date posted: March 11, 2012
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