Competitive Strategy to Collaborative Strategy: Tale of organic food firms from an emerging economy

Abstract

The socioeconomic changes in emerging economies shifted the market power from suppliers to customers. This compelled the firms to adopt a customer-centric approach, i.e., a differentiation strategy, to attain competitive advantage. The effective implementation of a differentiation strategy necessitates the adoption of value-chain thinking. The study aims to understand the transformation of linear supply chains to networked value chains as a firm moves toward differentiation. This study adopts a qualitative approach to understand the value chain of two Indian organic food firms, as organic foods are highly differentiated and customer-valued. Using the theoretical lens of transaction cost theory, evolution theory, and systems theory, this study attempts to highlight the business environment of organic foods. The study finds that as the stakeholder dependence is higher in the organic food sector, so does the need for cooperation and collaboration, thereby leading to network structure.