Animal Production Science Animal Production Science Society
Food, fibre and pharmaceuticals from animals
RESEARCH ARTICLE

Achieving better strategic fit and higher surplus for Australian beef value chains by recognising and countering chain failure

Stuart Mounter A , Garry Griffith A B C D and Euan Fleming A
+ Author Affiliations
- Author Affiliations

A UNE Business School, University of New England, Armidale, NSW 2351, Australia.

B Agriculture and Food Systems, University of Melbourne, Parkville, Vic. 3052, Australia.

C Global Food Studies Program, University of Adelaide, Adelaide, SA 5005, Australia.

D Corresponding author. Email: ggriffit@une.edu.au

Animal Production Science 57(8) 1767-1774 https://doi.org/10.1071/AN15460
Submitted: 18 August 2015  Accepted: 16 April 2016   Published: 22 August 2016

Abstract

Strategic fit is the nature of the link between the customer priorities that a value chain hopes to satisfy, and the capabilities that are available in the value chain to implement that objective. Usually, there is a trade-off between value chains that focus on being responsive to customer needs and those that focus on supplying at the lowest possible cost. If demand uncertainty is low, a low-cost value chain is the best strategic fit; conversely if demand uncertainty is high, a responsive value chain is the best fit. A poor fit means lower chain surplus to be shared among the chain participants. We provide an outline of an analytical framework for determining the optimal level of responsiveness for a food value chain. We then present and discuss two case studies. Both feature initiatives aimed at internalising positive chain externalities and capturing chain goods within the Australian beef value chain. We use our framework to show how these initiatives are predicted to promote responsiveness and thus achieve a better strategic fit and higher surplus for the whole chain. Verifying that such a move would indeed contribute to higher chain surplus would require some new measurements of whole-of-chain outcomes so that the economic relationships making up the framework could be estimated and analysed.

Additional keywords: agribusiness, chain externalities, chain goods, economics.


References

Alston JM, Norton GW, Pardey PG (1995) ‘Science under scarcity: principles and practice for agricultural research evaluation and priority setting.’ (Cornell University Press: Ithaca and London)

Chopra S, Meindl P (2013) ‘Supply chain management: strategy, planning, and operation.’ (Pearson: Harlow)

Cohen S, Roussel J (2013) ‘Strategic supply chain management: the five core disciplines for top performance’. 2nd edn. (McGraw-Hill Education: New York)

Doljanin A (2012) Aligning price signals throughout the beef value chain to reflect consumer preferences by assigning economic weights to the Meat Standards Australia (MSA) model inputs, Master of Economics Thesis, University of New England, Armidale.

Doljanin IA, Fleming EM, Griffith GR, Thompson JM (2015) Assigning economic weights to the Meat Standards Australia model inputs to better reflect consumer preferences and align price signals throughout the beef value chain. Australasian Agribusiness Review

Doljanin IA, Thompson JM, Griffith GR, Fleming EM (2016) Processes for measuring, communicating and valuing eating quality and saleable meat yield in the Australian beef value chain: current status and future opportunities. Australasian Agribusiness Perspectives, paper 113. Available at http://www.agrifood.info/perspectives/2016/Doljanin_et_al.pdf [Verified 19 July 2016]

Gans J, King S, Mankiw NG (2012) ‘Principles of microeconomics.’ 5th edn. (Cengage Learning: Melbourne)

Griffith G, Thompson J (2012) The aggregate economic benefits to the Australian beef industry from the adoption of Meat Standards Australia: updated to 2010/11. Australasian Agribusiness Review 20, paper 2, pp. 11–38. Available at http://www.agrifood.info/review/2012/Griffith_Thompson.pdf [Verified 19 July 2016]

Griffith GR, Rodgers HJ, Thompson JM, Dart C (2009) The aggregate economic benefits from the adoption of Meat Standards Australia. Australasian Agribusiness Review 17, 94–114.

Griffith G, Thompson J, Polkinghorne R, Gunner R (2010) Meat Standards Australia as an innovation in the Australian beef production and marketing system. Paper presented at the 4th International European Forum on System Dynamics and Innovation in Food Networks, Innsbruck, Austria, 8–12 February.

Griffith G, Umberger W, Gow H, Fleming E (2012) What is the role of local governments in new global food markets? Paper presented at the 6th International European Forum on System Dynamics and Innovation in Food Networks, Innsbruck, Austria. 14–18 February.

Griffith G, Fleming E, Mounter S, Malcolm B (2014) Accounting for externalities in agriculture and food sector value chains and systems: chain failure, chain goods and chain bads, Final Report to Meat and Livestock Australia on Project B.COM.1086, UNE Business School, The University of New England, Armidale.

Griffith G, Gow H, Umberger W, Fleming E, Mounter S, Malcolm B, Baker D (2015) Refocussing on the value chain perspective to analyse food, beverage and fibre markets. Australasian Agribusiness Perspectives, paper 104. Available at http://www.agrifood.info/perspectives/2015/Griffith_et_al.pdf [Verified 19 July 2016]

Hugos MH (2011) ‘Essentials of supply chain management.’ 3rd edn. (Wiley: Hoboken, NJ)

Kohls R, Uhl JN (1980) ‘Marketing of agricultural products.’ 5th edn. (Macmillan Publishing Co.: New York)

Lyford C, Thompson JM, Polkinghorne R, Miller M, Nishimura T, Neath K, Belasco E (2010) Is willingness to pay (WTP) for beef quality grades affected by consumer demographics and meat consumption preferences? Australasian Agribusiness Review 18, 1–17.

Polkinghorne R, Watson R, Porter M, Gee A, Scott A, Thompson JM (1998) Meat Standards Australia, a ‘PACCP’ based beef grading scheme for consumers: 1. The use of consumer scores to set grade standards. Proceedings of the International Congress of Meat Science and Technology 45, 14–15.

Polkinghorne R, Philpott J, Gee A, Doljanin A, Innes J (2008) Development of a commercial system to apply the Meat Standards Australia grading model to optimise the return on eating quality in a beef supply chain. Australian Journal of Experimental Agriculture 48, 1451–1458.
Development of a commercial system to apply the Meat Standards Australia grading model to optimise the return on eating quality in a beef supply chain.CrossRef |

Porter M (1985) ‘Competitive advantage, creating and sustaining superior performance.’ (The Free Press: New York)

Swann GSP (2003) Funding basic research: when is public finance preferable to attainable ‘club goods’ solutions? In ‘Science and innovation: rethinking the rationales for funding and governance’. (Eds A Geuna, AJ Salter, WE Steinmuller) pp. 335–359. (Edward Elgar: Cheltenham)

Thompson JM (2002) Managing meat tenderness. Meat Science 62, 295–308.
Managing meat tenderness.CrossRef |

Thompson J, Polkinghorne R, Griffith G (2012) A carcass index for MSA. Paper presented to BeefEx 2012, 9–11 October, Ashmore, Qld.

van Weele AJ (2014) ‘Purchasing and supply chain management: analysis, strategy, planning and practice.’ 6th rev. edn. (Cengage Learning: Andover, EMEH)

Weaver RD (2010) Supply chain and network performance: metrics for profitability, productivity and efficiency. International Journal of Food System Dynamics 1, 56–68.



Rent Article (via Deepdyve) Export Citation

View Altmetrics