4.3. Agribusiness Scope
This dimension consists of two components, geographical scope
and degree of vertical integration (Anand et al., 2006). Seventy nine
percent of DS firms operate in one or two countries, whereas NODS
target one to five countries. During the interviews it emerged that
DS firms' emphasis on commanding higher than average prices forces
them to conquer markets in a more gradual way, to ensure that they
can establish their brand and be truly different from competitors. The
theory does not indicate whether a DS firm should use distribution
channels and logistics services from third parties or should have its
own sales points (Goldsmith & Gow, 2005). DS firms in our study
are on average more vertically integrated than NODS, 67 versus 39%.
DS firms are focused on forward vertical integration more strongly
than the NODS group. Monteverde, a Costa Rican dairy producer,
used an external distributor for many years with average results. In
2008, it decided it was time to improve distribution and after discussing
several options it acquired a distribution company specialized
in cold and frozen distribution. Today this vertical integration is providing
them with a competitive edge given improved market knowledge
and service to customers.
4.4. Operations Skills
The differences between some dimensions such as innovation capability,
marketing skills, and agribusiness scope for DS and NODS companies
are much larger than the differences found between these two
groups for operations skills. The first component of operational skills
is relationship with suppliers and includes relationship quality and
the prices agribusiness firms pay for their inputs or raw materials. The
results show no significant difference between DS and NODS firms for
this component.