Content area
Full Text
1.
Introduction
Agribusiness supply chains are being squeezed by increased competition and decreasing returns (Bonney et al. , 2007). Supply chains are also affected by product perishability and unpredictable variability in quality and volumes, while there is a strong imbalance in the bargaining power at the various stages of the chain (Caputo and Pelagagge, 2007). The distinctive features of an agribusiness supply chain make it difficult to manage, and success stories on the application of supply chain methods to enhance agricultural industries are limited (Archer et al. , 2009). Research has identified relationships as having a positive effect on the supply chain (Bhagat and Dhar, 2011). Therefore, value chain analysis (VCA) offers an opportunity to sustain a competitive advantage through adopting a relational approach.
The VCA concept outlines how firms can achieve a competitive advantage by adding value within their organisations through activities, such as producing, marketing and delivering goods and services (Porter, 1985). Porter's view was that a competitive advantage cannot be achieved by a firm in isolation, but depends on the activities of the whole chain and being able to create improvements through the chain to the end-user (Porter, 1985; Soosay et al. , 2012). At the heart of this concept is the focus on the end-user and the organisation of the chain such that it satisfies the needs and wants of the consumer (Fearne, 2009).
While the value chain approach has been advocated for use in the agri-food sector, the majority of agribusiness firms are still largely based on traditional supply chain models (Bonney et al. , 2007; Fearne, 2009; Taylor, 2005). Traditional supply chains tend to focus on the material flow, pushing what is produced through the channels; with efficiencies achieved through cost savings (Fearne, 2009; Lewis et al. , 2014). However, the chains are under increasing pressure to not only become more economically efficient, but also to create more value for their customers in response to rapid changes in global markets (Soosay et al. , 2012). Traditional competitive advantages arising from price, season or location are being challenged by increased competition created through market access, technological advances (such as packaging to increase shelf-life) and currency fluctuations (Soosay et al. , 2012).
Value chain thinking requires a relational approach highlighted by...