Managing Firm Competitiveness in Global Markets

The globalization profile of US food firms is mixed. US sales from foreign direct investment is now over six times the level of exports, while US processed food trade balance has moved from +$9 billion in 1995 to -$7 billion in 2004. Competitive forces drive firms to seek new areas of growth, with either portfolio expansion or penetration and expansion in new markets. Although the forces that weigh heavily on a firm are recognized, their influence in determining a firm’s action in choosing a particular strategy is not well understood. As the nature of food manufacturing is evolving and the operational scope of a food manufacturing firm has grown from local, to regional, national, and global, is there a new role for policy? What we do know is that a firm trades with other firms and that aggregate trade patterns do not fully reflect how firms view prospects, make decisions and factor in policies as they organize themselves for trade. Addressing the potential characterizations of competitiveness for the industry and the firm followed by the conflicting influences of R&D on competitiveness, we focus on what is meant by a global food firm with the use of the experiences of three industry case studies.