Achieving Strategic Fit in a Food Value Chain: Further Evidence and the Link with Strategic Scope

Abstract

<p>Maximising value in a food value chain requires the achievement of a strategic fit of services applied to the transfer and sale of heterogeneous products in different channels to meet the varying requirements of customers. However, the approaches offered in the supply chain management textbooks do not provide rigorous analytical tools to achieve that optimal mix. To overcome this deficiency, an approach based on the standard microeconomic framework of the production possibilities frontier and the iso-revenue curve has been used to demonstrate the optimal mix of attributes from responsive and low-cost strategies, applied on a whole-of-chain basis. The optimal mix depends on both the technical feasibility of production and the relative unit returns from each product. In this paper, further real-world examples are provided, and the evidence suggests that commercial decisions on the cost-responsiveness mix have been made in accordance with the proposed framework. The relationship between strategic fit and strategic scope is also explored.</p>