Transaction costs and participation in avocado export marketing in Murang’a County, Kenya

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kelvin Njuguna Karing'u ◽  
Hezron Nyarindo Isaboke ◽  
Samuel Njiri Ndirangu

PurposeThe purpose of this paper is to investigate the role of transactional costs on smallholder avocado farmers’ participation in the export market and the extent of participation in Murang’a County, Kenya.Design/methodology/approachData was collected from 384 avocado farmers in Murang’a County, following stratified sampling. The Heckman two-stage model was used for analysis.FindingsResults showed that the cost of information search was an important variable that impedes smallholders’ participation in export marketing while harvesting costs inhibits the extent of participation in export marketing.Research limitations/implicationsThis study used data at the farm level. Therefore, insights on transaction costs among other marketing agents in the export market value chain would be an issue for future studies.Originality/valueFollowing the debate on transaction costs and market participation among farmers in Sub-Sahara Africa, this paper models transactional costs and export market participation among avocado smallholders and measures the extent of participation with the inclusion of harvesting costs, negotiation costs, monitoring costs and information search costs that are not common in previous studies, thus contributing to the development of literature.

2016 ◽  
Vol 39 (3) ◽  
pp. 329-355 ◽  
Author(s):  
Manfred Fuchs ◽  
Mariella Köstner

Purpose – The purpose of this study is to investigate the relationships among organizational factors (export market experience, international commitment), external environment (competitive intensity), export marketing strategy and export success. The findings yielded by the analyses confirm that export market-specific experience and international commitment are significant drivers of export success. In addition, the results indicate that the degree of product adaptation is positively related to profitability and overall success, while price and distribution adaptation to local conditions have a direct impact on sales growth. Finally, the authors found evidence that international commitment exerts a positive effect on the adaptation of marketing strategies to country-specific requirements. Thus, the study findings can be used to formulate business and marketing strategies to improve firm’s success in overseas markets. Design/methodology/approach – This study used PLS for dealing with formative and reflective measures and used a sample of 200 export ventures that exported on the average in more than 15 countries. Findings – This study clearly shows that export venture success is linked to managerial commitment and experiential knowledge and that firms contribute to export venture success by adapting product to foreign markets. It is also shown that firms in more competitive environments increase their effort to adapt, leading to better export venture performance. Research limitations/implications – Although Austrian companies are typically characterized as small- and medium-sized enterprises (SMEs), the study is limited to this sample. Practical implications – Managers in SME should concentrate their effort on a small set of export venture countries of concentrate their capabilities and effort (commitment and personal) to increase adaptation in those selected market, which will lead to increasing export venture performance. Originality/value – The study differentiates between formative and reflective measures which most studies in this genre do not, which is a fundamental conceptual shortcoming. This study shows with robust result the interrelation between commitment and managerial experience (intra-firm factors) and the degree of competition in foreign markets and how marketing mix adaptation affects export venture performance measured over a period of five years.


2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Andrew Gerard ◽  
Maria Claudia Lopez ◽  
John Kerr ◽  
Alfred R. Bizoza

Purpose In developing countries, local buyers often rely on relational contracting based on reciprocity and trust. This paper analyzes relational contracting and global value chain (GVC) governance by focusing on how domestic and foreign coffee exporters in Rwanda confront challenges.Design/methodology/approach Semi-structured interviews were conducted with 25 representatives of Rwandan private, Rwandan cooperative-owned and foreign exporters, and four coffee sector stakeholders.Findings Foreign firms export most Rwandan coffee, and local exporters express concerns about their ability to compete. Rwandan exporters face challenges accessing capital, competing with foreign firms and managing high transaction costs. They use relational contracts to reduce transaction costs, and they benefit from a monopsony zoning regulation that reduces competition. Foreign exporters face regulatory challenges: a government-set coffee price and the zoning regulation. They vertically integrate to reduce costs and lock in suppliers through prefinancing.Research limitations/implications Future research should analyze differences between local and foreign exporters in other contexts to advance understanding of the different challenges faced and contracting approaches used.Originality/value Few GVC governance studies address the role of relational contracts in contexts where enforcement is costly. Considering relational contracts within GVCs can improve value chain analysis, specifically in the developing countries where many GVCs start.


2017 ◽  
Vol 2017 (5) ◽  
pp. 40-60
Author(s):  
Mariya Podshivalova ◽  
Dmitriy Podshivalov

The article attempts to evaluate certain types of transaction costs for small businesses. In particular, it considers the costs of access to the law, tax burden, administrative burden, costs of illegality, specification and property rights protection, the costs of information search, costs of opportunistic behavior of employees. The author evaluates the impact of forthcoming institutional changes on transaction costs for small industrial enterprises in the context of such key "chronic problems" for this type of enterprises as low output demand, lack of investment, administrative barriers, underdeveloped transport and energy infrastructure. The article concludes that alongside positive changes, certain chronic problems and associated transaction costs remain outside the reform wave. It refers to such types of transaction costs as the costs of interaction (ex ante): cooperation with large enterprises, new markets entry and new products development (information retrieval related to the study of markets and potential consumers), patent search, excessive burden of small industrial enterprises applying standard tax system, the costs of finding investors, the costs to meet creditors requirements.


2016 ◽  
Vol 54 (9) ◽  
pp. 2208-2234 ◽  
Author(s):  
Farzana Parveen ◽  
Noor Ismawati Jaafar ◽  
Sulaiman Ainin

Purpose Based on the system of value chain theory, the purpose of this paper is to investigate the impact of social media usage on the performance and the entrepreneurial orientation of the organizations. Design/methodology/approach A total of 174 organizations responded to the survey. Findings The result of the study showed that social media usage has a very strong positive impact on organizations’ performance, in terms of cost reduction, improved customer relations, and enhanced information accessibility. Research limitations/implications In the study, social media usage was categorized into three sub-constructs such as social media usage for marketing, social media usage for building customer relations, and social media usage for information search. This study investigated the usage of social media and its impact as a whole, considering all social media tools together. Finally, this study used a cross-sectional sample to collect data. Practical implications The result of the study benefits the managers to understand the various areas of organizational performance that can be improved by social media usage. Social implications The study also provided evidence that social media usage has strong positive influences on enhancing the entrepreneurial orientation of the organizations. Originality/value This study provides a clearer idea on the real importance of social media and its benefits. This study demonstrated the various areas of organizational performance that can be improved through social media usage.


2018 ◽  
Vol 16 (4) ◽  
pp. 427-444
Author(s):  
Ashini Wesumperuma ◽  
Athula Ginige ◽  
Upul Gunawardana

Purpose This study aims to explore ways to enhance competitiveness of commercial lighting industry because of the growing digitally connected stakeholder community. Positive responses from stakeholders to recurring business interactions help build trust and formation of a community; value chains being one form of such trusted community. Because of the increasing trust, the effort to search right value chain partners diminishes, business interactions become less formal and transaction costs are reduced, thus increasing the competitiveness. Design/methodology/approach In this research, a cross-sectional study of commercial lighting industry domain in Australia was carried out, focusing on two states: New South Wales and Victoria. Based on the findings, an approach and a supporting platform to enhance competitiveness of commercial lighting industry were synthesized. Findings Based on the findings from the study, formation of such value chains, namely, “Entrusted Circles” and its two types of formations, fully and partial, were observed. Their further growth was hindered by high transaction costs. To reduce this transaction cost, this paper proposes a platform to create dynamic value chains, among stakeholders of commercial lighting industry, making use of growing digital connectivity leading toward agile formation of Entrusted Circles to enhance competitiveness. Research limitations/implications This study focuses on the commercial lighting industry in Australia, which is not tested in any other domain to investigate its wider applicability. However, it is conceptually applicable to be used in industries with compliance and standard procedures. Originality/value This paper shows how to identify Entrusted Circles and build, support and sustain such relationships among value chain partners to successfully conduct business transactions in a dynamic value chain.


2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mathew Abraham ◽  
Prabhu Pingali

PurposeThis paper aims to understand the significant farm and market-level factors that incentivize the adoption and marketing of pulses influencing its supply response to changing demand.Design/methodology/approachThe authors first use a modified Nerlovian supply response model using secondary data to identify the major price and non-price factors influencing the supply of pigeon pea, black and green gram in the major pulses growing states in India. Second, using primary qualitative data the authors map the pulses value chain from farm to retail to identify the how proportional and fixed transaction costs (FCTs) influence market participation of pulses growers and limit the transmission of price and quality information.FindingsThe supply response model shows some positive influence of price on area allocation for pigeon pea and black gram and some negative effects of yield and price increase of competing crops on pigeon pea acreage. However, for the most part, the area of Kharif pulses is inelastic to prices in the long run. Irrigation, rainfall and yields in the lag year are shown to have a significant influence on area allocation for pulses. The market study reveals that low yields, low landholding size and geographical disadvantages of high agro-climatic risk and poor connectivity hinder market access of pulses farmers relative to other crops. Market power in favor of buyers and poor price and quality information is a disadvantage to sellers, influencing their ability to participate in markets.Research limitations/implicationsA quantitative study would be required to identify the magnitude of farm and market-level transaction costs.Originality/valueThis study helps to understand the supply response of pulses and gives suggestions to direct policy to rectify this.


2019 ◽  
Vol 26 (4) ◽  
pp. 340-351
Author(s):  
Alberto Carlo Cajavilca ◽  
Marta Tostes

Purpose The purpose of this paper is to examine the role and contribution of San Martin and Chazuta subnational governments in promoting development and internationalization of the cocoa and chocolate value chain from the stakeholders’ perceptions. This work was based on a qualitative approach in which information triangulation method, information processing with evaluation rubric and WebQDA software were used. The results showed that stakeholders of both value chains perceive that the subnational government’s actions taken to develop and internationalize these value chains are poorly valued and insufficient. Likewise, six internationalization barriers were identified in which two are perceived as the main limitations: low productivity levels and access to innovations and technology. These results contribute to enrich the decision-making process of political authorities and public officials from the San Martin subnational governments. Moreover, they provide information, according to the Peruvian national requirements, on the perceptions needed to rethink and improve the governmental services available, especially productive activities in the rainforest area (Presidencia del Consejo de Ministros, 2015; Wiener Fresco, 2010). This can improve or create new extension services to increase the quality of the Chazuta’s cocoa and chocolate products and to facilitate their entry into more demanding and profitable markets (Shapira, y otros, 2015). Design/methodology/approach This paper has been developed by using a qualitative approach with an exploratory and descriptive scope. The objective was to examine a study case of how subnational governments contribute in the promotion of development and internationalization of agro-industrial value chains as alternatives to illicit crops (Hernandez, Fernandez, & Baptista, 2010). The Chazuta case was selected because it is representative of the region in terms of coca eradication and is located between two regions of high biodiversity – Cordillera Escalera Regional Conservation Area and Cordillera Azul National Park. Findings One of the issues hindering the ability of the Chazuta cocoa and chocolate producers is based on their perception that the subnational governments’ efforts are focused on meeting already-established goals and little emphasis is placed on solving productive problems. On the other hand, at an articulation level, the most relevant efforts have been connecting the cocoa and chocolate customers to Chazuta producers through events. In spite of this, such events are not considered a permanent activity and the producers do not perceive that these mechanisms enable them to maintain these long-term trade relationships. This can be explained by the fact that Chazuta cocoa and chocolate organizations recognize that they still have incipient productive capacities to meet the foreign market’s demand. Furthermore, associations, cooperatives and SMEs are not able to maintain constant levels of production quality, except the family-based business. Knowledge and techniques provided by subnational governments and private organizations are not fully used or implemented by the associations’ members. This low level of knowledge application can be explained by cultural factors and also because the producers receive multiple and sometimes contradictory information from various providers of technology extension services. This leads to inadequate use or non-implementation of productivity improvements, thus generating a virtuous circle in which production and quality of the goods remain at low levels, which hinders their entry into demanding and profitable markets. Research limitations/implications This paper has been developed with a qualitative approach considering an exploratory and descriptive scope. Chazuta case was selected because it is representative of the region in terms of eradication achievements and it is located between two regions of high biodiversity. A rubric is an evaluation method of individuals or organizations performance, taking into consideration the evaluator’s pre-established criteria to determine if the objectives and goals are being met. Based on these criteria, evidence and performance information is collected. Following, performance is graded based on the researcher’s predetermined criteria and finally a merit-based judgment is made on the performance. Practical implications The results contribute to enrich decision making of political authorities and public officials from San Martin subnational governments. They provide information, according to Peruvian national requirements, on the perceptions needed to rethink and improve provided government services, especially in rainforest area productive activities. This adds up to improvement or creation of new extension services to increase the quality of Chazuta’s cocoa and chocolate products, and to facilitate their entry into more demanding and profitable markets. Social implications The situation of San Martín region and Chazuta district is contextualized and emphasis is given to socioeconomic conditions and the value of cocoa as an alternative crop to coca. From 1980 to early 2000, Peru lived a period of generalized violence due to narcoterrorism, which had large-scale outreach in southern highland and rainforest areas. To deal with this situation, subnational governments in collaboration with international cooperation decided to consolidate agro-industrial value chains in order to generate legal income for rural populations. For this purpose, alternative crop policies were implemented and San Martin region achieved the best results. Originality/value This fieldwork was carried out as part of the undergraduate thesis but after fieldwork, with the use of online software tool WebQDA, codes were created to systematize and quantify the collected information in the content manager. The codes were created taking into account assessment and evaluation variables. Each value represented a code referred to a performance level as perceived by Chazuta cocoa and chocolate value chains stakeholders.


2017 ◽  
Vol 21 (3) ◽  
pp. 623-639 ◽  
Author(s):  
Tingting Zhang ◽  
William Yu Chung Wang ◽  
David J. Pauleen

Purpose This paper aims to investigate the value of big data investments by examining the market reaction to company announcements of big data investments and tests the effect for firms that are either knowledge intensive or not. Design/methodology/approach This study is based on an event study using data from two stock markets in China. Findings The stock market sees an overall index increase in stock prices when announcements of big data investments are revealed by grouping all the listed firms included in the sample. Increased stock prices are also the case for non-knowledge intensive firms. However, the stock market does not seem to react to big data investment announcements by testing the knowledge intensive firms along. Research limitations/implications This study contributes to the literature on assessing the economic value of big data investments from the perspective of big data information value chain by taking an unexpected change in stock price as the measure of the financial performance of the investment and by comparing market reactions between knowledge intensive firms and non-knowledge intensive firms. Findings of this study can be used to refine practitioners’ understanding of the economic value of big data investments to different firms and provide guidance to their future investments in knowledge management to maximize the benefits along the big data information value chain. However, findings of study should be interpreted carefully when applying them to companies that are not publicly traded on the stock market or listed on other financial markets. Originality/value Based on the concept of big data information value chain, this study advances research on the economic value of big data investments. Taking the perspective of stock market investors, this study investigates how the stock market reacts to big data investments by comparing the reactions to knowledge-intensive firms and non-knowledge-intensive firms. The results may be particularly interesting to those publicly traded companies that have not previously invested in knowledge management systems. The findings imply that stock investors tend to believe that big data investment could possibly increase the future returns for non-knowledge-intensive firms.


2016 ◽  
Vol 21 (3) ◽  
pp. 352-362 ◽  
Author(s):  
Janet Howieson ◽  
Meredith Lawley ◽  
Kathleen Hastings

Purpose Value Chain Analysis (VCA) is established as a diagnostic tool. The purpose of this study is to extend existing applications and develop an iterative and relational method. to facilitate the application of VCA to agri-food chains as a strategic process rather than a diagnostic tool. Design/methodology/approach Using a multiple case study design, the new approach to VCA was applied to four Australian prawn fisheries. These fisheries varied in size, location, management structures and marketing arrangements and allowed the general applicability of the approach to be explored. Findings The application of the revised VCA revealed the importance of undertaking a strategic approach, with the outcome for all fisheries being a greater understanding of their consumers and an enhanced realisation of commercial opportunities. Two fisheries completed the revised VCA, and the findings show that a relational approach is crucial in creating value. In addition, it was shown that formalised structures and the informal behaviours of the value chain members have a strong positive impact on the relationship process. Research limitations/implications The research furthers the value chain literature and contributes an iterative approach to the application of VCA. The research also shows that obtaining improvements is not achievable for all chains, and, if the entire chain is not engaged with the process, the value of the results will be compromised. Further research is needed to confirm the validity of findings in other food industries. Originality/value The relational approach is an original contribution to the area of VCA research and provides industry with a blueprint for creating successful value chains. Specifically, the areas of implementation and evaluation make an original contribution to the theoretical and practical knowledge of value chains.


2015 ◽  
Vol 5 (7) ◽  
pp. 1-8
Author(s):  
Vijay Pundalik Bhangale ◽  
Maithili Prashant Dhuri

Subject area Marketing. Study level/applicability MBA Marketing Class. Case overview The case describes the transition of a “Galvanized Wires Business of Tata Steel” into a unique identity, the'Tata Wiron' brand. It focuses on key stages in this journey, including “Understanding the Customers in Galvanized Wires Business”, “Value Chain”, “Challenges Faced”, “Need for Branding”, “Market Segmentation”, “Competition”, “Process of Branding”, “Differentiation”, “Distribution & Sales” and “Promotion”. Tata Steel Wires Business is a major player in the steel wire industry, servicing the discerning needs of its customers across global markets and the leading producer of steel wires in India. A wealth of experience and expertise in the wire industry coupled with latest technology incorporations has enabled Tata Steel Wires Division to constantly meet the most exacting specifications and requirements of its customers. It manufactures a wide range of wires catering to the needs of various industry segments, such as automobile, infrastructure, power and general engineering. The products are well established across the markets of Europe, the USA, Middle East Asia, Australasia, South Asia and Asia and the Far East. Expected learning outcomes The expected learning outcomes are as follows: understanding how in-depth analysis of the competition and value chain establishes the need for branding in a commodity market; understanding how consumer insights help in market segmentation and targeting; and building a brand in commodity market. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes.


Sign in / Sign up

Export Citation Format

Share Document