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What does the 'New Quality' mean in view of Polish dairy cooperatives?

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  • Hanf, Jon Henrich
  • Pieniadz, Agata

Abstract

This paper investigates the relationship between the chosen quality strategy and the vertical co-ordination mechanism of a focal company by using new institutional economics, as well as strategic management approaches. The theoretical findings are tested using evidence from 19 of the largest Polish dairy cooperatives, surveyed in spring 2006. The results show that all co-ops recognise the changing market requirements and are treating food quality as more than plain food safety and the ability to continuously reproduce an ex ante defined set of attributes. However, compared to investor-owned dairies, co-ops are disadvantaged in quality-based competition due to their lower flexibility and access to financial and qualified human resources. To overcome this intense competition, co-ops modify their production profile, which leads to market segmentation. Moreover, the choice of quality strategy is an economic activity, guided by the co-op's profit expectations within the selected market. The chosen quality strategy determines the design of the vertical co-ordination mechanism. Thus, the higher the requirements for the final product, the further quality management systems go beyond a firm's boundaries, and the higher is the intensity of the relationships between the intermediary stages in the dairy chain.

Suggested Citation

  • Hanf, Jon Henrich & Pieniadz, Agata, 2007. "What does the 'New Quality' mean in view of Polish dairy cooperatives?," 105th Seminar, March 8-10, 2007, Bologna, Italy 7858, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa105:7858
    DOI: 10.22004/ag.econ.7858
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    Cited by:

    1. Pieniadz, Agata & Renner, Swetlana & Petrick, Martin, 2007. "Exploring the Flexibility of Polish Family Farms During Transition," 100th Seminar, June 21-23, 2007, Novi Sad, Serbia and Montenegro 162347, European Association of Agricultural Economists.

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