Work Together & Compete
Companies will generally compete vigorously with each other for a greater share of a market, or to buy goods and services. However, companies may also have to co-operate to be able to compete more effectively.
The Scottish agriculture and food and drink industries are made up mostly of small companies, and one way they can develop scale to compete with large corporate players is through collaboration.
In 2003, the future for organic milk production in Scotland looked bleak. Prices were falling, the market was fragmented. A group of organic milk producers was faced with some important decisions regarding the future. Scottish Organic Milk Producers (SOMP) was formed with the aim of marketing organic milk more effectively. They also recognised that they needed partners to get closer to the consumer. one of whom is Graham's Dairies. By 2006, the organic milk market in Scotland had grown significantly and prices increased.
Operating in the unsubsidised sector of agriculture, and with consistent quality competition from Denmark and Holland, Scottish Pig Producers, a marketing co-operative with a membership of some 120 pig producers, had to be pro-active and work collaboratively with the rest of the industry. An example of the Scottish pig sector's collaborative and innovative approach was the establishment of the first slaughter disease surveillance scheme in the UK. Wholesome Pigs (Scotland) Ltd was the producer co-operative formed to manage the health scheme, where pig carcases are regularly monitored post-slaughter to assess the presence of any clinical disease. The success of the collaborative strategy is such that it is regarded by many as the UK benchmark and the one that the rest of the livestock sectors could learn from.
Coldwater Shellfish, a primary scampi processor, operates in a difficult environment. Fluctuations in supply that result from the huge variation in fishing conditions mean that supply chain collaboration is driven by the need to achieve continuity and consistency of supply as well as consistency of the quality of supply. Coldwater Shellfish works very closely with its fishermen suppliers and its customers, such as Marks & Spencer to make the process as efficient as possible.
Key points from this case study:
- Collaboration can be the most effective way to overcome competition in some circumstances
- Collaboration in welfare and quality management can reduce costs and increase the premium on a product
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