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,

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

Agribusiness,

Conceptual Framework for Measuring Supply Chain Performance: An Innovative Approach

The process of developing appropriate supply chain performance measurement instruments is difficult due to the complexity of supply chains. This paper presents an overview and evaluation of the performance measurement instruments used in supply chain models. As a result it advances a framework for developing an innovative supply chain performance measurement instrument which is generally applicable and which incorporates single organisational measures with inter-organisational and supply chain measures. The instrument distinguishes between qualitative and quantitative performance measures. Finally, it proposes supply chain satisfaction balance/ imbalance, as a qualitative supply chain performance measure.Agribusiness, Industrial Organization,

Network connections and innovation capacity in traditional agrifood chains

In the New Economy, the network is considered as more important than the firm itself. In this paper the focus is on chain networks which include vertical networks among chain members, horizontal networks with peers, and networking with third parties. Networks have an important role in the diffusion and adoption of innovations, thus they are the locus of innovation. While previous research focused on the firm, we contribute to the understanding of innovations in chain networks, i.e. we investigate the innovation capacity in vertical networks and how networking with peers and third parties is influencing the innovation capacity of the vertical network. We propose that there is a positive relationship between the network connections the direct chain partners have with peers and third parties and the innovation capacity of the vertical network. Data were collected from 90 direct agrifood chains in the traditional food sector. Cluster analysis suggested three clusters of chains corresponding to three distinct levels of innovation capacity: low, medium and high. Via descriptive analysis and binary logistic regression the influence of networking with peers and third parties on the innovation capacity of the vertical network was investigated. Our results confirm our proposition. However, we found that the chain partners are either horizontally or vertically networking for innovation. Nevertheless, more networking within the chain and with peers and third parties is linked to higher levels of innovation capacity. Consequently, our study adds to the research in the field of the New Economy by deepening the understanding of how innovation capacity is developed in vertical networks. We can confirm that the network is very important for the development and implementation of innovations and that the innovation capacity of one firm is linked to the innovation capacity of its chain partners. For future research we propose to investigate the link between networking for innovation and types of innovation which can be achieved. Further, future research should explore further inter-organizational links in the chain network and explore wider networks than the direct chain.SMEs, chain networks, traditional food products, Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Food Consumption/Nutrition/Food Safety, Labor and Human Capital,

Consumer Perception of Bread Quality

Bread contains a wide range of important nutritional components which provide a positive effect on human health. However, the consumption of bread in Belgium is declining during the last decades. This is due to factors such as changing eating patterns and a increasing choice of substitutes like breakfast cereals and fast foods. The aim of this study is to investigate consumer’s quality perception of bread towards sensory, health and nutrition attributes. Consumer’s quality perception of bread seams to be determined by sensory and health attributes. Three clusters of consumers are identified based on these attributes. In the first cluster, consumers’ quality perception of bread is not dependent on the health attributes it embraces, but to some extent on sensory attributes. For the second cluster, both health and sensory attributes appear to influence quality perception. In the third cluster only sensory attributes appear to be important in determining quality perception, though in a negative direction. The results of this study will possibly help health professionals and policy makers to systematically inform the consumers about the positive effects of bread and its components. Furthermore, firms can use the result to build up a tailor-made marketing strategy.Consumer, Quality perception, Bread, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety,

Innovation in Traditional Food Networks

In an increasingly globalising market, innovation is an important strategic tool for micro, small, and medium sized enterprises (SMEs) to achieve competitive advantage (Avermaete et al., 2004a; Gellynck et al., 2007; Murphy, 2002). Innovation can be defined as an ongoing process of learning, searching and exploring resulting in new products, new techniques, new forms of organization and new markets (Lundvall, 1995). Innovation is a continuous process characterised by three steps: efforts, activities and results. Efforts are all resources, such as human and financial resources, a firm is investing in activities for the development of innovations. Results are the effects of these innovation activities on tangible (e.g. growth of market share, profit) as well as less tangible aspects (e.g. firm stability, efficiency) (Gellynck et al., 2006). Consequently, the measurement of innovation competences captures also the progress in developing an innovation and not only the result, such as the successful implementation of innovation (Gellynck et al., 2007)

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 cooperation among firms which are primarily competitors. Data were collected during focus groups and in‐depth interviews in three European countries: 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

Food Chain Networks as a Leverage for Innovation Capacity

Chain networks of manufacturers of traditional food products comprehend a large majority of micro-, small-, and medium-sized enterprises (SMEs – firms employing less than 250 people). In a more and more globalised market with increasing competition, innovation is an important strategic tool for SMEs to achieve competitive advantage (Avermaete et al., 2004a, Gellynck et al., 2007, Murphy, 2002). Innovation can be defined as an ongoing process of learning, searching and exploring, resulting in new products, new techniques, new forms of organisation and new markets (Lundvall, 1995) which are new to the firm and to the industry ranging from incremental to radical innovations. Within our study traditional food products are defined according to four criteria: (1) the key production steps of a traditional food product must be performed in a certain area, which can be national, regional or local. (2) The traditional food product must be authentic in its recipe (mix of ingredients), origin of raw material, and/or production process. Further, (3) the traditional food product must have been commercially available for at least 50 years and (4) it must be part of the gastronomic heritage

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