The importance of network goals for strategic chain management

Nowadays food products are increasingly produced in supply chain networks that involve numerous firms. Due to their pyramidal-hierarchical structure, such networks possess a focal company that coordinates the network. The managerial task of the focal company is to work out collective strategy that addresses cooperation and coordination problems at the firm, dyadic and network levels. These strategies must take into account that at each level specific goals must be achieved. Though the focal company is a strategy setting unit that sets network goals, other network actors may perceive these goals as firm-level goals of the focal company. Therefore, conflicts may occur in supply chain networks.Supply chain networks, focal company, network goals, Agribusiness,

SUCCESS FOR THE WHOLE FOOD CHAIN: TESTING THE MODEL OF NETWORK SUCCESS IN UKRAINE

Supply Chain Networks, Network Goals, Alignment of Interests, Alignment of Actions, Agribusiness,

Power Struggle in the Food Chain? Lessons from Empirical Studies on Power Influences in Chains and Marketing Channels

Power plays a key role in any chain relationship. In the past large manufacturers such as Unilever and Nestle were the most dominant players in the chain. However, as a result of consolidation among retailers, power has shifted towards retailers. Nowadays such retailers as Wal-Mart, Carrefour, and Tesco are seen as powerful gatekeepers controlling the access to the end consumer. Moreover, branded manufacturers and large multinational retailers become increasingly dependent on fewer and larger suppliers who can deliver high quality products at competitive prices. Since many decades there is discussion going on about the role of power in chains and marketing channels. In order to understand how power and its interactions with other constructs in the chain can be used beneficially for management of the whole chain, it is of great importance to investigate the influences and effects of power. Some of the phenomena which are said to be influenced by power include performance, satisfaction, commitment, relationship quality, conflict, compliance, problem solving, chain integration and collaboration. In this context, the aim of our work is to analyze and systemize existing empirical studies, which measure the influences of power on other phenomena, and discuss the strengths and weaknesses of existing conceptualizations of power, in order to add clarity to the existing turmoil in the literature and contribute to the understanding of the role of power in chains and marketing channels for managerial purposes.Power, Power Conceptualization, Supply Chain, Supply Chain Network, Marketing,

Quality Management in Supply Chain Networks - The Case of Poland

In this article we suggest that rising quality requirements are key factors for the redesign of food chains. We argue that the food supply proceeds through pyramidalhierarchical strategic networks coordinated by powerful focal firms. These firms choose a quality strategy and employ chain quality management concepts by exerting managerial discretion to achieve the super-ordinate network aims. We introduce and elaborate upon two types of chain quality management: strategic and operative. The theoretical findings have been tested using evidence from the Polish dairy market. Semi-structured interviews were conducted across the various hierarchical levels of the 19 largest Polish dairy cooperatives during the spring of 2006. The results show that the firms’ activities are generally aligned with current market opportunities for optimal enterprise performance. Thus, we determined that manufacturers of well-branded products create an advanced network structure and apply strategic quality management. Networks that have a focal company acting as an external customer of a processor use operative quality management. Some Polish dairies are still not embedded in any supply chain networks; no chain quality management concepts can be installed in these chains because they have no powerful focal firm.chain quality management, dairy cooperatives, network theory, Poland, Agribusiness, Agricultural and Food Policy, Demand and Price Analysis, Farm Management, International Development, Livestock Production/Industries, Production Economics,

What are ‘true’ loyal consumers in the food sector? Insights from an empirical study

Because loyal consumers are less likely to switch to competitors and because they are more tolerant to increases in price than non-loyal consumers, one of the main aims of firms is the “generation” of loyal consumers. But what is consumer loyalty? The marketing literature emphasises that for “true loyalty” it is important to consider both consumers' purchasing pattern (i.e. repurchases) as well as the underlying attitudes of the consumers. Thus, true loyalty includes both a behavioural (purchase) component, which results in repeated purchases, and an attitudinal component, which results in a dispositional commitment to a product, a brand, or a company, and associates a unique value to it. However, considering the characteristics of food products and the sector the question arises whether the above mentioned strict definition of true consumer loyalty is realistic in the food sector. The aim of our paper is to empirically test this question. In order to test our research question we conduct 30 semi-structured in-death interviews with regular customers of an organic retail shop in March / April 2009. Each interview lasts for roughly thirty minutes.Consumer loyalty, food sector, survey, organic products, Agricultural and Food Policy,

Quality Management in Strategic Networks - Is there any Relevance in the Polish Dairy Sector?

The most striking consequence of recent food scares was that food quality is no longer the concern of a single firm, but instead the whole food chain has to work together in order to deliver the new quality. For the agri-food business there is evidence that the majority of these more highly co-ordinated chain organisations are organised as vertical networks. The aim of the paper is to determine the degree of influence which the chosen quality strategy exerts on the vertical co-ordination mechanism. A theoretical framework has been developed based on new institutional economics and strategic management theory. The findings are used to analyse the Polish dairy sector and elaborate on the relevance of quality management for this sector.network theory, relationship management, quality management, Polish dairy market, Livestock Production/Industries,

CHAIN QUALITY MANAGEMENT IN CO-OPERATIVES

This paper investigates the relationship between the chosen quality strategy and the vertical co-ordination mechanism of a focal company by using new institutional economics, as well as strategic management approaches. The theoretical findings are tested using evidence from 19 of the largest Polish dairy cooperatives, surveyed in spring 2006. The results show that all co-ops recognise the changing market requirements and are treating food quality as more than plain food safety and the ability to continuously reproduce an ex ante defined set of attributes. However, compared to investor-owned dairies, co-ops are disadvantaged in quality-based competition due to their lower flexibility and access to financial and qualified human resources. To overcome this intense competition, co-ops modify their production profile, which leads to market segmentation. Moreover, the choice of quality strategy is an economic activity, guided by the co-op's profit expectations within the selected market. The chosen quality strategy determines the design of the vertical co-ordination mechanism. Thus, the higher the requirements for the final product, the further quality management systems go beyond a firm's boundaries, and the higher is the intensity of the relationships between the intermediary stages in the dairy chain.Network theory, Relationship management, Quality management, Cooperatives, Poland, Institutional and Behavioral Economics,

STRATEGIC MANAGEMENT OF FOOD NETWORKS: ARE NETWORK GOALS NECESSARY AND ACHIEVABLE?

Nowadays food products are increasingly produced in vertically cooperating supply chain networks. The questions of how such networks have to be designed and governed have been addressed in several well known articles. However, questions dealing with chain strategy and management are not discussed satisfyingly. In particular, the importance of network goals for the network’s strategy and management is undisclosed. Therefore, the aim of this paper is to provide the theoretical elaboration on the possible role of network goals in strategic chain management. Specifically, the following questions are inquired. First, what are the network goals? Second, how can these goals affect chain management?Supply Chain Networks, Network Goals, Chain Management, Agri-Food Business, Agribusiness,

THE “DARK” AND THE “BRIGHT” SIDES OF POWER IN SUPPLY CHAIN NETWORKS

One of the prerequisites for a supply chain network is the existence of a focal company, which possesses power to coordinate the network in order to realize its strategic objectives. Power represents one of the major elements of the supply chain management and seems to have been treated in the literature in contrasting ways from the two sides “dark” and “bright”. Using literature review we examine how these sides of power affect supply chain management from the viewpoint of the focal company with specific attention to coordination and cooperation issues and whether it can be used as a tool to promote the overall supply chain effectiveness.Supply Chain Networks, Supply Chain Management, Power, Focal Company, Agribusiness,

Is retailing really unique? Insights into retail internationalization using business theories

Internationalization is one of the most important trends in retailing today. This process is not new, however has accelerated in the last two decades. It was less than 30 years ago that almost all of the world’s retail firms were pure national firms with a negligible share in foreign markets. That scenario has changed dramatically. Taking a look at the top 200 global retailers, almost all players except those in the US operate in numerous countries, having established a noteworthy business capacity in foreign markets. It is observed that retailers often export their business model in new markets. Therefore they are regarded as driving forces of structural change in the agri food business. The understanding of retail internationalization is essential to the understanding of the changes in the agri food business. Investigating retail internationalization many scholars builds on the theories of the wider business internationalization literature. Other authors state that retailing is unique, therefore the business theories can not be applied. By reviewing the literature we try to overcome this tension and discuss how business internationalization theories can help to understand retail internationalization.internationalization, retail internationalization, business internationalization theories, Agricultural and Food Policy,