Information-Sharing and Strategy by Food Industry Firms

Abstract

This study investigates the strategic behaviour of food industry firms. Its two goals are to: (i) characterise strategies being employed; and (ii) identify distinct approaches to information-sharing. Data from an interview-format survey of Danish food industry firms are used to characterise strategy at two levels: 11 "strategic orientations"; each of which is composed of 3-6 of a total 57 "strategic actions". Principal components were identified and two complementary cluster analysis techniques were used to assemble clusters that are composed of firms either with distinct strategies, or sets of strategies occurring in distinct combinations. Eight clusters emerge, with reasonable procedural performance. The clusters are distinct in a surprisingly large number of ways, including their strategies for market share, pricing, approach and response to regulation, exports and use of retailers' own-label brands. Information-sharing strategies are closely linked to both marketing strategy and regulation response/anticipation. Individual clusters identify distinct sets of behaviour regarding information-sharing up and/or down the value chain, their approach to quality and other aspects of market segmentation, targeting of export markets, and willingness to compete on price. Clusters' distinct strategies regarding regulation featured anticipation, as opposed to several diverse means of passing on compliance costs: to buyers or to sellers. Such activities were linked to information-sharing strategies in different ways by different clusters.