Functional Demand Satiation and Industrial Dynamcis - The Emergence of the Global Value Chain for the U.S. Footwear Industry

Around 1940 Schumpeter draws on an analysis of the U.S. footwear industry as an exemplar case to formulate his famous hypothesis about the positive relation between market concentration and innovative activity. Starting in the 1970s the value chain of U.S. footwear producers disintegrates, eventually separating the process of product innovation from manufacturing in this industry. Studies testing Schumpeter’s hypothesis commonly do not account for the modularity and globalization of an industry’s value chain. Schumpeter having neglected the demand side in his theorizing, we argue that the separation of product innovation and manufacturing in the U.S. footwear industry is influenced by functional satiation effects on demand. If the functional requirements of consumers are met, their willingness to pay for ever more product varieties decreases. Since the early 1970s the ‘oversupply’ of new product varieties and the simultaneously decreasing price level drive market growth beyond functional satiation (Frenzel Baudisch, 2006b). In this paper we argue that this simultaneous price and innovation competition separates the product innovation process from manufacturing to gain economies in both of these processes simultaneously. Discussing the consumers’ motivations to buy products beyond their functional requirements offers a deeper qualitative understanding of the business practices revealed in the historical case of the U.S. footwear industry.Industrial organization, Schumpeter hypothesis, Modular Value Chain, Consumer Behavior, Footwear Industry

Thought for Food: the impact of ICT on agribusiness

This report outlines the impact of ICT on the food economy. On the basis of a literature review from four disciplines - knowledge management, management information systems, operations research and logistics, and economics - the demand for new ICT applications, the supply of new applications and the match between demand and supply are identified. Subsequently the impact of new ICT applications on the food economy is discussed. The report relates the development of new technologies to innovation and adoption processes and economic growth, and to concepts of open innovations and living lab

Personalization, customization and bespoke: Increasing the product offer

It could be said that true luxury products are defined through skill, connoisseur- luxury ship, rarity, craftsmanship and innovation. Luxury brands on the other hand are customization defined by illusions of luxury, fashion, authenticity, lifestyle, aspiration, the global fashion market and profit. Increasingly luxury brands have introduced options to custom- manufacture ize and personalize their products to enhance their offer and thereby creating technology the perception that the customer is purchasing something individual. However, branding these options within the realms of the luxury brand do nothing more than offer craftsmanship variations on a theme. Component pieces within an existing product range are retail produced and offered for sale as part of an existing product category. Offering a customized product changes the perception of the consumer. They believe they are buying something different, but this is far from the reality. Luxury brands offer customization to attempt to diversify and add value to their product offer. If one considers craftsmanship and innovation as core components in creating differentiation between luxury and luxury branded products, it could then be argued that traditional crafted products and the integration of digital technologies challenge the status quo. As customization and personalization are already occupying a place of growing significance and include viable modes of industrialized production, the product offer lacks the integrity that would be associated with a handmade luxury product.Peer reviewe

Thought for Food: The impact of ICT on agribusiness

The paper outlines the impact of ICT on the food economy. On basis of a literature review from four disciplines – knowledge management, management information systems, operations research and logistics, and economics - the paper identifies the demand for new ICT applications, the supply of new applications and the match between demand and supply. Subsequently, the paper discusses the impact of new ICT applications on the food economy. The paper relates the development of new technologies to innovation and adoption processes and economic growth, and to concepts of open innovations and living labs.ICT, Food Economy, Innovation and Adoption, Economic growth, Agricultural and Food Policy,

Use of Ecolabels in Promoting Exports from Developing Countries to Developed Countries: Lessons from the Indian LeatherFootwear Industry

This paper tries to understand whether importers in the North are able to push exporters in the South towards sustainable production, with the help of a case study of the Indian leather industry. After providing a short description of the global leather footwear industry, the first section provides insights into the competitive advantages of different countries, characteristics of developing country exporters and the difference between large and small European buyers of Indian leather footwear. The subsequent section provides an insight into the different chains of influence that exist in trying to make international trade more sustainable with the help of a broad understanding of the means, their effectiveness, their constraints and a few examples of such chains of influence. Section four studies whether ecolabels are in a position to be suitable indicators of sustainability. Further it delves into understanding the perspectives of consumers, producers and regulators on whether ecolabels are useful in promoting sustainable exports. The explanation of how ecolabels conflict with brand dynamics is quite interesting. The policy measures provide clear options for targeting sustainable production. Suggestions include use of eco-elasticity indicator, toolbox approach to environment policy, introducing comprehensive sustainability labels, maintaining a level of mandatory legislations as well as a constructive effort to increase transparency in supply chains. The annexure include the research methodology adopted for the paper, the reason for choosing Europe as destination for the research, a brief overview about types of ecolabels and a small description of integrated product policies.Ecolabels, Export promotion, Leather footwear, Market access

Bata Management System: A Built-In Resilience against Crisis at the Micro Level

The Bata Company became the largest and thriving global enterprise of the 20s and 30s, during the decades of economic crises. Why could Bata prosper when everybody around was contracting, laying people off and passively waiting for governmental bailouts and handouts? Our answer lies in the existence of a unique, inimitable, integrated management system—a rare thing among modern companies operating with patchworks of disconnected, dysfunctionaland non-synergistic, albeit fashionable methods and techniques. Roosevelt’s New Deal was the beginning of the end of management-employee cooperation, strengthening adversarial relations, trade unionism and the final emergence of so-called macroeconomics, reversing the promising microeconomic trends of the time. Resilient, flexible and human-oriented companies are the best protection against government-induced crises.Bata management system, microeconomics, creative destruction, autopoiesis, New Deal, macroeconomics, sustainability, resilience, added value, Austrian school

CONSUMERS’ WILLINGNESS TO BUY FOOD VIA THE INTERNET: A REVIEW OF THE LITTERATURE AND A MODEL FOR FUTURE RESEARCH

In the first part of the paper, existing studies on consumer propensity to buy via the Internet are reviewed in an attempt to shed light on factors explaining consumer willingness to buy food via the Internet. Following a model by Sindhav and Balazs (1999), determinants relating to medium, product, consumer, firm and environment are distinguished. In order to draw the various results together and provide a coherent framework for future research, we then propose a model which combines the Theory of Planned Behaviour and the lifestyle construct. The model can be used to analyse how beliefs affecting consumers intention to buy food via the Internet are formed and changed due to experience with such shoppingNo keywords;

Tracing the Portland Athletic Shoe Industry. Innovation, Time & Space

The athletic shoe industry in Portland, Oregon is examined in this paper. We argue that Portland’s athletic shoe industry is representative of an industry cluster, and go on to examine the roles of technology diffusion, innovation, local competition, local demand and local factor conditions in the growth of this industry in the Portland area. In addition, we consider the industry’s integration of global commodity chains as a key innovation. We describe historical changes in the control of commodity chain nodes for two main firms in the Portland region, Nike and Adidas. We argue that new technologies and innovations have shifted commodity chain relationships for these firms and suggest that current and future shifts might lead to a lessening importance of some local factors which have previously contributed to the clustering of athletic shoe firms in the region