The use of Strategic Aliances by Agricultural Cooperatives

Abstract

This study consists in comparing case studies of four agricultural cooperatives regarding their choices about the use of strategic alliances. The objective of this study is to identify the differences in the practices of cooperatives for making alliances with suppliers, customers and competitors, specifically the differences about cooperatives’ interests and characteristics. In order to reach this objective, it was made an exploratory qualitative research with four agricultural cooperatives, which are ranked in the top twenty cooperatives of Minas Gerais in Brazil. The results show that strategic alliances are almost unknown, and when they are used, there is little theoretical basis to support them. There is evidence that the choice of strategic alliances is an important decision of cooperatives no matter what type of alliances are taken place. In addition, the use of strategic alliances tend to influence positively not only the results of the cooperatives but also the results of the supply chain to which the cooperatives belong.

The Sicilian cooperative system of wine production

“…The trend of calculated financial ratios demonstrates that, since their partnership with the Farnese group, the Cantina Cellaro cooperative has become financially more stable and reliable despite increasingly competition in the wine market. Confirming the statement by Guimarães et al (2015) regarding the positive influence of strategic alliances on the results of cooperatives, this alliance has permitted Cantina Cellaro to turn the so-called mutual advantage, which is distributed to its members, in turn improving the price paid for their grapes. This has also determined a stability in terms of the number of members, supported by factors such as the full compensation of grape production costs, the trust of members in the leadership of the cooperative, the inter-organisational exchange of information and knowledge with the Farnese group, and the presence of a planning system (Ricciardi, 2010).…”

“…Cantina Cellaro has implemented a downstream strategy which is unusual for the Sicilian context: a vertical quasi-integration relationship (Baudry, 2013) with one of the most important Italian wine conglomerates, the Farnese group. This relationship exemplifies a strategic alliance which has provided this cooperative with a specific business model and a strategic edge, as well as many advantages in terms of enhancing its financial and reputation results, as theorised by Dietrich (1994) and Guimarães et al (2015). The relationship enables the Cantina Cellaro to reach national and international markets, albeit indirectly.…”

“…The latter are considered as a process of concentration with the aim of improving efficiency while alliances function as contracts between two or more firms to jointly manage assets and achieve strategic goals. Guimarães et al (2015) have produced evidence that the choice of strategic…”