New Product Development and Product Supply within a Network Setting: The Chilled Ready-meal Industry in the UK

Abstract

This paper analyses inter-organizational networks that link together firms operating in the food processing and distribution industry in the UK. In doing so, the paper draws on insights recently developed by Mark Casson that treat inter-firm networks as an institutional response to the changing costs and opportunities of information management. Detailed analysis of product innovation and supply-chain management issues within the industry, exemplified by the growth of chilled ready-meals, leads to the identification of two distinct but complementary inter-firm networks: a network of control and a network of innovation. In each case, the study finds that the critical information is derived from the retailers' interface with consumers and thus that these information-based networks are effectively controlled by the leading supermarket chains. The study's conclusions are considered in relation to the recent findings of the UK Competition Commission following its investigation into grocery retailing in Britain.