Incentives to differentiation strategies for Brazilian coffee producers

Nunes, Rubens; Silva, Vivian Lara dos Santos; Saes, Maria Sylvia Macchione; Sousa, Rúbia Nara Rinaldi Leão de; Souza, Roberta de Castro

doi:10.11132/rea.2013.749

Cited by 9 publications

(11 citation statements)

References 8 publications

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“…For H3 , the results demonstrate that Qual_Rec ( p < 0.001) is positively correlated with participation in illycaffè’s arrangement (marginal effects of 12.48 percentage points). These findings support the reputational incentives expectation (Nunes et al , 2013). The variable Price_Dif was not significant.…”

Section: Resultssupporting

confidence: 88%

“…Another relevant attribute of the transaction of high-quality coffee supply in Brazil is related to monetary and reputational incentives. Aiming to manage incentives, coffee growers seek simultaneous participation in multiple supply transactions to try to capture different incentives provided by each chain (Nunes et al , 2013). Even though illycaffè is known for providing the highest incentives in the Brazilian coffee market, it restricts the participation based on a very high level of quality, forcing this participation even more in multiple supply transactions.…”

Section: Literature and Hypothesis Developmentmentioning

confidence: 99%

“…This inquiry relies on the reorganization completed by the illycaffè company to encourage specific investment decisions by Brazilian coffee growers. The illycaffè supply chain emerged as a restrictive arrangement due to its inclusion of extremely high quality as a requirement to be a coffee supplier to the firm (Nunes et al , 2013; Saes et al , 2003; Zylbersztajn and Neves, 1995). Consequently, the firm designed a complex network for its high-quality coffee supply transactions, which are considered as one of the highest levels of asset specificity in Brazilian coffee production.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Can contracts substitute hierarchy? Evidence from high-quality coffee supply in Brazil

Oliveira

Zylbersztajn

Saes

2019

BFJ

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Purpose A trend toward higher quality has demanded more strategic investments in the transaction of coffee supply in Brazil. Instead of internalizing this transaction, one firm, illycaffè, has challenged the vertical integration assumption by adopting contracts to coordinate its supply. Aiming to investigate whether this firm is losing economic efficiency in terms of coordination, or whether it is being efficient due to a proper definition and allocation of property and decision rights, the purpose of this paper is to analyze the transaction attributes of illycaffè’s suppliers according to the vertical integration dilemma. Design/methodology/approach The research design is based on a survey of 105 coffee growers analyzed through probit regression. Using a transaction costs approach, the study empirically tests whether well-designed contracts can act as a hierarchy by following the efficient alignment hypothesis. Findings The results emphasize asset specificity, uncertainty and incentives as determinants for being an illycaffè supplier. In other words, these findings demonstrate that a well-designed contract can substitute a hierarchy based on transaction costs economics. It contributes by illustrating other coordination alternatives overlapping vertical integration, even in environments of high uncertainty and asset specificity, which encourages other private strategies based on allocation of property and decision rights of hybrid arrangements. Originality/value The study adopts a unique survey about transaction costs in the transactions of high-quality coffee supply in Brazil. The main contribution is to shed light on the cases where, how and why contracts can substitute the need for in-house production, and to guide private and public strategies using this background.

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Section: Resultssupporting

confidence: 88%

Section: Literature and Hypothesis Developmentmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Can contracts substitute hierarchy? Evidence from high-quality coffee supply in Brazil

Oliveira

Zylbersztajn

Saes

2019

BFJ

Self Cite

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“…The coffee agricultural market in Paraná is passing through a structural change, coming to focus on quality. With that comes an emphasis on specialty coffees, which are distinguished from conventional coffees through attributes of quality, related to specific characteristics such as origin, variety, color, and size, or otherwise linked to questions of an environmental and social nature, the mode of production or working conditions (Nunes et al, 2013;Scholz et al, 2013). Specialty coffees consist of sources of value for strategies of differentiation (Barra;Ladeira, 2016;Guimarães et al, 2019).…”

Section: Resultsmentioning

confidence: 99%

Spatial dynamics of coffee production in the state of Parana, Brazil

Ribeiro

Ponce

Telles

2020

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Coffee is a commodity of great economic importance for Brazil and for the state of Paraná. In the 1960s and 1970s, Paraná was responsible for half of coffee production in Brazil. However, after 1975, with the occurrence of what was called the "black frost" (geada negra), there was considerable reduction in the area devoted to coffee growing in Paraná. In this context, the aim of this study was to examine the spatial dynamics of coffee production in Paraná, identifying the microregions that have specialized in the activity, and analyze the evolution and spatial distribution of production in the period from 2003 to 2018. To do so, the locational quotient (LQ) method was applied, principal component analysis (PCA) was performed, and cluster analysis was carried out. A reduction in planted area and of the amount of coffee produced in Paraná was found. The results of the LQ denote changes in the spatial dynamics of coffee production, with reduction from 14 to 9 microregions specializing in the activity, and they are concentrated in the North Central and Northeast of Paraná. Two principal components that explained 88.06% of the total variability of the data were identified: the first formed by microregions with high participation in rural credit, and the second by microregions near the processing industries. Four groups were defined based on their degree of specialization, rural credit, and location of coffee industries. This trajectory implies gains in yield and reinforces the importance of investments in technology as a determining factor in development of the coffee production chain.

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“…In this way, the opportunities offered by the certifications and the DO can be seized, mainly by those entities which can sell or which do sell coffee using the CMR seal, as shown in the statement of the Superintendent of Cooperative 1. Complementarily, Nunes et al (2013), when investigating the specialty coffee market in Brazil, find that certifications have a particular function of increasing the added value of the product.…”

Section: Appropriating Valuementioning

confidence: 99%

Creating and appropriating value in cooperation networks

Arantes

Mineiro

Castro

et al. 2021

RIAE

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Objective of the study: The objective of this research was to analyze how the processes of creation and appropriation of value are manifested in a horizontal agribusiness networkMethodology / approach: A case study was carried out in the Cerrado Mineiro Region (CMR) in which documentary research and interviews were used as source, whose data were analyzed through content analysis by frequency. Originality / Relevance: There is little evidence in the literature about studies that explore processes of joint value creation and appropriation in horizontal networks. In view of this gap, the study proceeds by individually addressing the processes of creation and appropriation of value considering the nature of cooperation of the networks.Main results: In relation to the results achieved, CMR creates value in cost reduction, differentiation by product, market expansion, expertise in the production of coffee, differentiation, dissemination and strengthening of the brand. Regarding the appropriation of value, CMR appropriates itself for the commercialization of potential quality coffee, the learning process, the premium paid in the cooperative's coffee, the valorization of the producer and for having a unique way for the production of coffee.Theoretical / methodological contributions: Among the main contributions of this study, the individual analysis highlights the processes of creation and appropriation of value applied to horizontal networks. The considerations reinforce the fine line between the processes of creation and appropriation of relational value. That is, in addition to developing internal competencies and essential skills for the creation and appropriation of value, organizations must devise strategies to achieve a balance between these processes.

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Incentives to differentiation strategies for Brazilian coffee producers

Cited by 9 publications

References 8 publications

Can contracts substitute hierarchy? Evidence from high-quality coffee supply in Brazil

Can contracts substitute hierarchy? Evidence from high-quality coffee supply in Brazil

Spatial dynamics of coffee production in the state of Parana, Brazil

Creating and appropriating value in cooperation networks

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