Competitive parity in chain management – factors that influence the long-term compliance with product and quality criteria along the chain

Abstract

Abstract Focal firms in the agri-food business must take strategic measures to ensure certain product and quality characteristics along the value chain. This is necessary in order to be able to keep up with competitors in the long term. Research shows that competitive parity, in addition to competitive advantage, should be considered as a strategic dimension. In the production of food, often several actors are involved and the focal firm (that is primarily responsible for the product) must organize the business relationships along the chain in such a way that the desired outcome is achieved in the short and long term. The achievement and safeguarding of competitive parity have been little researched so far. Up to now, there has only been a systematic literature review on this topic. Therefore, this aim of this research is to examine which factors influence the construct of competitive parity. Based on the findings of the literature review and further literature on the management of value chains, a theoretical framework is developed. A first empirical application of the model makes it possible to derive recommendations for action for focal firms in the agri-food industry. Therefore, we conduct a quantitative survey in the wine industry. PLS-SEM is used to analyze the model, using SmartPLS software. This research is the first to empirically investigate the strategic relevance of competitive parity in the agri-food business. The results show that chain management needs to pay attention to competitive parity besides the competitive advantage. Whereas the measures of cooperation have a stronger effect on achieving a competitive advantage, the measures of coordination have a stronger effect on achieving competitive parity. The constructs of power and trust — in contrast to the existing basis of resources and capabilities in the company — seem to have a significant influence on cooperation and coordination.