Competitive forces and innovation strategies: a study of the Indonesian crab industries

Abstract

Purpose – The purpose of this paper is to evaluate the strengths and weaknesses of the current competitive position and performance of Indonesian Crab Industries (ICI). The paper examines whether a reorientation of the innovation strategic vision is needed to build future industrial excellence. Design/methodology/approach – Data collected from secondary sources and interviews with processors and stakeholders in the major ICI are analyzed in a five competitive forces value chain model. Findings – It is significant that the industry's competitive position and its performance in relation to international buyers is strongly related to good infrastructure and the uniqueness of the products and services it offers to buyers. Key factors related to this include: the sustainability of the raw material supply, the volume of production demanded, the manufacturing facilities and innovations and the consistency of quality. These all strengthen the value chain position. Threats from substitute products like surimi are, however, limiting the price level. The lack of market-oriented capacity to effectively develop unique products and strategies is a major barrier for entering new markets. Research limitations/implications – The interview data are based on the industry managers’ experiences as suppliers of the US market. This study may be applied as an example for analyzing market performance factors in natural resource-based industrial environments. Originality/value – The paper provides original empirical data analysis of the development and innovation strategies of the crab industries in Indonesia. It contributes to the marketing literature by linking value chain structure and industrial perception of performance drivers.

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