Strength in numbers: collaborative procurement and competitiveness of craft breweries
International Journal of Operations & Production Management
ISSN: 0144-3577
Article publication date: 11 August 2023
Issue publication date: 15 February 2024
Abstract
Purpose
This article aims to investigate collaborative procurement as a sourcing strategy amongst competing small enterprises in an effort to reduce their material supply costs through increased efficiencies, bargaining power and economies of scale.
Design/methodology/approach
A case study approach is applied to a network of breweries that are regionally clustered. Interview data from producers, suppliers and industry experts is inductively interpreted to understand the viability, organisational impact and benefits/limitations of joint procurement activities.
Findings
The craft brewing industry follows a market place strategy of differentiation to achieve competitive advantage. This has supply chain implications that promote raw material diversity, which is in conflict with standardisation – a necessary factor for collective buying. Competition impacts information sharing and governance mechanism, while the structural factors of size asymmetry along and across the supply chain influence returns. These issues impact the potential economic benefits of collaborative procurement.
Research limitations/implications
The research propositions have been developed in a specific industry but are generalisable to other companies with a differentiation strategy, especially in the consumer packaged goods sector.
Practical implications
Enabling conditions and constraints are captured in a framework and capability matrix, which can be used by practitioners to assess industry and product feasibility for collaborative procurement.
Originality/value
Previous studies of collaborative procurement have been in the public sector amongst large organisations. This work focusses on coopetition in the context of small businesses to identify the viability and cost-benefit of this strategy.
Keywords
Acknowledgements
Since acceptance of this article, the following author(s) have updated their affiliation(s): Madeleine Pullman is at the School of Business, University of Sussex, Brighton, UK.
Funding: This research was conducted under the support of the Co-Growth project, funded by the European Agricultural Fund for Rural Development – Welsh Government Rural Development Programme.
Citation
Ramjaun, T.I., Pullman, M., Kumar, M. and Sanchez Rodrigues, V. (2024), "Strength in numbers: collaborative procurement and competitiveness of craft breweries", International Journal of Operations & Production Management, Vol. 44 No. 3, pp. 643-665. https://doi.org/10.1108/IJOPM-08-2022-0503
Publisher
:Emerald Publishing Limited
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