New Product Development and Product Supply within a Network Setting: The Chilled Ready-meal Industry in the UK

Abstract

This paper analyses inter-organizational networks that link together firms operating in the food processing and distribution industry in the UK. In doing so, the paper draws on insights recently developed by Mark Casson that treat inter-firm networks as an institutional response to the changing costs and opportunities of information management. Detailed analysis of product innovation and supply-chain management issues within the industry, exemplified by the growth of chilled ready-meals, leads to the identification of two distinct but complementary inter-firm networks: a network of control and a network of innovation. In each case, the study finds that the critical information is derived from the retailers' interface with consumers and thus that these information-based networks are effectively controlled by the leading supermarket chains. The study's conclusions are considered in relation to the recent findings of the UK Competition Commission following its investigation into grocery retailing in Britain.

Clusters/networks promote food innovations

“…The companies involved are not free to act in isolation from the others in the network and the relationship creates possibilities for innovation but also a risk for inertia that limits innovations. Cox, Mowatt, and Prevezer (2003) have specifically looked at inter-firm networks for the chilled ready-meal industry in the UK and identified two types in this sector: a control network and a network for innovation. The former is a result of the computerised information management systems that are basically controlled by the retailers.…”

Industrial Clusters and Social Networking for enhancing inter-firm cooperation: The case of natural resources-based industries in Chile

“…An analysis of the networks literature provides an insight into the organizational processes that underlie general alliance decisions, or specific kinds of marketing cooperation, as it can involve new product development or product supply (Cox 2003). Social networks make potential partners aware of each other's existence, needs, and capability requirements for starting cooperation, even helping them to develop the necessary trust for alliances (Gulati, Nohria, and Zaheer 2000).…”

The politics of innovation: Why innovations need a godfather

“…The diversification was based on a combination of innovation and acquisitions (Cox, Mowatt and Prevezer, 2003). The development of frozen food was an instance of the former, the company's expansion of its ice cream interests an instance of the latter.…”