Horizontal and vertical networks for innovation in the traditional food sector

The locus of innovation is not the individual firm anymore but increasingly the network in which the firm is embedded. Hence, in this paper innovation is investigated in the broader context of networks and applied to the traditional food sector. Networking refers to a process of identifying and acting on complementary interests with or without formal means of cooperation and plays an important role for the diffusion and adoption of innovations, because they increase the flow of information. Two main types of networks exist. Vertical networks relate to cooperation of partners belonging to the same chain. Meanwhile, horizontal networks refer to coopereation among firms which are primarily competitors. Data were collected during focus groups and in-depths interviews in three European contries: Belgium, Hungary, and Italy. In each country, data are collected from retailers/wholesalers, food manufacturers and suppliers in the beer, hard and half hard cheese, ham, sausage, or white paprika chain. In the investigated countries both vertical and horizontal networks exist. However, the intensity of using the network differs. On the one hand vertical networks are well developed based on quality assurance schemes and traceability, though these networks often face difficulties due to high lack of trust. On the other hand, horizontal networks are well developed when a producer consortium is involved. However, these networks can be inhibited through strong competition. The partners in traditional food networks focus mainly on innovation related to product characteristics such as new size, form and packaging without changing the traditional character of the product. The main barriers for innovation in the traditional food networks are the lack of understanding the benefits of networking activities for innovation, the lack of trust, the lack of knowledge of appropriate methods and skills, and the lack of financial and physical resources. Our study points out that successful SMEs use their networks to overcome lacks of knowledge and information and to create possibilities of joint use of resources

Chain networks as a leverage for innovation capacity : the case of food SMEs

&nbsp;Nowadays, innovation is no longer limited to the individual firm but involves increasingly the chain network in which the firm is embedded. The chain network is considered as the place where the internal and external resources of a firm are combined and transformed, leading to innovation capacity. In the increasingly globalizing market, innovation is an important strategic tool for small and medium sized enterprises (SMEs) to achieve competitive advantage. However, SMEs are often confronted with barriers for developing and introducing innovations, such as the lack of economies of scale. Our paper investigates how the chain network is contributing to the enhancement of the innovation capacity and which chain network characteristics are crucial in this process. In contrast to previous studies at chain network level, in our research specific chain networks are investigated and compared to each other. Hence, data collection took place at different chain network levels, being the supplier, the food manufacturer and the customer, working together and consequently belonging to one specific and unique chain network.The analysis of innovation capacity at the chain network level is realized by means of cluster analysis. This results in a three-cluster solution dividing the sample into Non-innovator chain networks, Customer-driven innovator chain networks and food manufacturer-supplier-driven innovator chain networks. Next, the influence of the chain network on the innovation capacity is examined. Thereby, the three achieved clusters differ significantly related to certain chain network characteristics. The following characteristics form an important leverage for the innovation capacity: firm size, profitability and business growth of the chain network members, as well as higher dependency, and lower levels of integration, rewarding power, social satisfaction and collaboration. The distinction of Customer-driven and food manufacturer-supplier-driven innovator chain networks reveals that the involvement of the chain network partners for the enhancement of the innovation capacity is a very important aspect. In future research, the degree of complexity of the studied system should gradually be increased, namely from a chain network of three members to more complex chain networks.</p

BOTTLENECKS AND SUCCESS FACTORS FOR THE INTRODUCTION OF QUALITY ASSURANCE SCHEMES IN THE AGRI-FOOD SECTOR

Agribusiness,

Chain Networks as a Leverage for Innovation Capacity: The Case of Food SMEs

Nowadays, innovation is no longer limited to the individual firm but involves increasingly the chain network in which the firm is embedded. The chain network is considered as the place where the internal and external resources of a firm are combined and transformed, leading to innovation capacity. In the increasingly globalizing market, innovation is an important strategic tool for small and medium sized enterprises (SMEs) to achieve competitive advantage. However, SMEs are often confronted with barriers for developing and introducing innovations, such as the lack of economies of scale. Our paper investigates how the chain network is contributing to the enhancement of the innovation capacity and which chain network characteristics are crucial in this process. In contrast to previous studies at chain network level, in our research specific chain networks are investigated and compared to each other. Hence, data collection took place at different chain network levels, being the supplier, the food manufacturer and the customer, working together and consequently belonging to one specific and unique chain network. The analysis of innovation capacity at the chain network level is realized by means of cluster analysis. This results in a three-cluster solution dividing the sample into Non-innovator chain networks, Customer-driven innovator chain networks and food manufacturer-supplier-driven innovator chain networks. Next, the influence of the chain network on the innovation capacity is examined. Thereby, the three achieved clusters differ significantly related to certain chain network characteristics. The following characteristics form an important leverage for the innovation capacity: firm size, profitability and business growth of the chain network members, as well as higher dependency, and lower levels of integration, rewarding power, social satisfaction and collaboration. The distinction of Customer-driven and food manufacturer-supplier-driven innovator chain networks reveals that the involvement of the chain network partners for the enhancement of the innovation capacity is a very important aspect. In future research, the degree of complexity of the studied system should gradually be increased, namely from a chain network of three members to more complex chain networks.innovation capacity, chain network, SMEs, food sector., Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Industrial Organization, Research Methods/ Statistical Methods,

Contribution of Cluster Relations to Food Competitiveness in the EU

The participation in regional networks is an important factor in explaining the food companies’ innovation capacity which – in turn - is an important driver of competitiveness (Gellynck et al., 2006a; Gellynck et al., 2007). Further, it is argued in cluster theory that intensive networking between related companies and other actors in a given region is a driver of competitive advantage of this region (Enright, 1998; Porter, 1998). In this paper the food cluster is understood as a set of geographically and socially embedded network relations based on a range of complementarities and communalities between regional actors and enhancing the competitiveness of the regional food industry. Each cluster shows distinct patterns of learning and uses different sources of knowledge (Pittaway et al., 2004; Steiner and Hartmann, 2006). As such, clusters exist in different forms, characterised by distinct configurations of network relations. By joining a network and taking part in a collaborative process with partners belonging to the network, the company is able to overcome internal restrictions (Camps, 2004; Daskalakis and Kauffeld-Monz, 2005; Janszen, 2002). Network configurations are diverse in character, dynamic and principally guided by the choices of partners and by the network infrastructure itself (Pittaway et al., 2004). Further, networks are considered to be embedded in the environment (Etzkowitz and Klofsten, 2005). This environment can cover different geographical scales of which the regional scale proves to be a significant one (Bunnell and Coe, 2001). Earlier research demonstrates that the company’s networking behaviour is important to explain its innovation capacity and competitiveness: it is the condition which has to be fulfilled to benefit from other regional external resources for innovation, such as the presence of a strong food chain, a competitive market or leading-edge facilities (Gellynck et al., 2006b; Gellynck et al., 2007). Further, networking relations are established with a diversity of partners. There is evidence that networks are more effective where there is exchange of knowledge between systems, for example between different industrial sectors, regions or stakeholders (Foster et al., 2003; Kaufmann and Todtling, 2001). This is also acknowledged in cluster theory, where reference is made to networks between concentrated groups of companies and a range of other organisations (Porter, 1996; Raines, 2001). Following the important role of networking in innovation processes and the diversity of network relations existing within regional food clusters, our paper focuses on the question which network characteristics have the strongest relationship with the competitiveness of the regional food industry. In particular, this paper formulates an answer to this question based on the perception of the main stakeholders in the network: entrepreneurs, scientists, policy makers and network actors (understood as regional development initiatives and formal networks). This paper is structured as follows. In the following section the conceptual framework is described, leading to the research question. In section three the research design and methodology are described. Afterwards, in section four the analysis and main findings are presented, leading to the conclusions in section five.Agribusiness,

Imbalances of chain performance: the case of the traditional food sector in the EU

Purpose: Measure chain performance in the traditional food sector and identify the main relationship measures determining performance. Methodology: Survey with 271 chain members from 91 traditional food chains from 3 European countries in 6 traditional food product categories. First 12 types of performance imbalances are distinguished and subsequently, cluster analysis is carried out. Finally, the nature of imbalances is linked to the quality of chain relationships. Findings: Three clusters are demarcated. Cluster one represents chains being characterized by higher performance of both suppliers and focal companies as compared to customers, while cluster three represents chains with high customer and focal company performance as compared to suppliers. Cluster two includes chains hardly including chain imbalances. Several relationship measures such as trust, conflict and reputation demonstrate discriminative power between the clusters. Research limitations/implications: The research is limited to traditional food chains. Practical implications: Our findings allow the identification of chain imbalances and as a result, allow chain members and policy makers to make specific and tailor made efforts to enhance performance at specific location of the chains, depending on the type of imbalance occurring. Originality/value: The shift to analysis of individual chains, horizontal comparison of chains and identification of chain commonalities may contribute to develop a new management theory.chain performance imbalances, chain relationships, traditional food, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety,