Information Technology, Coordination, and Competitiveness in the Food and Agribusiness Sector

Abstract

As business managers search for strategies to improve the competitive position of their firms, information technology is playing an increasingly crucial role. While much of the literature on competitiveness has examined how such technology supports the strategic goals of the firm by lowering costs, raising barriers to outside competitors, or facilitating the differentiation of products, relatively little attention has been devoted to the role technology plays in shaping the relationship between players in a productionmarketing spectrum. It is the goal of this paper to explore the topic of technology, coordination, and competitiveness in the context of the agribusiness sector. Specifically, we will argue that in an increasingly consumer-oriented business environment, information technology not only has enhanced but has hastened coordination strategies between various levels of the sector. Furthermore, these coordination strategies would not necessarily have evolved as a result of the existing price signals or market structure. The first section of the paper addresses definitional issues along with a literature review. The review includes both contributions from the agricultural economics field and research from the business literature on competitiveness. In the second section of the paper, we argue that as a result of information technology, the agribusiness sector has become increasingly focused on the consumer, forcing retailers to shift their marketing strategies. Illustrations of how consumer demands are passed down through the producer-consumer chain and a discussion of conditions which might enhance or inhibit information-based coordination strategies are discussed in the third section. In the fourth section, we discuss implications for the agricultural economics profession. The conclusions which result from the framework we suggest are presented in the final section.