Value creation through cluster network in the Swedish food sector : case study of four food companies operating in a cluster network

University essay from SLU/Dept. of Economics

Abstract: Globalization has drastically changed the global market in recent years, which has prompted businesses to adjust the way they operate. This evolutionary step has also affected the food sector, where new opportunities for production and transportation have challenged firms in the sector to utilize new methods for value creation. Further, many SMEs are lacking competencies, capital and resources needed to develop on their own. One method that is becoming more prominent, both within and outside the food sector, is to create corporate gains by cooperation with other firms. This process of value creation can occur when multiple companies within the same sector all operate in close geographical vicinity to each other, in what is defined as a cluster. The purpose of this study is to examine different factors that are determinant for a company when deciding to operate in a cluster network. Furthermore, this study will investigate how these factors are contributing to value creation for both an individual company and for the cluster it operates within. In order to investigate this and collect empirical data, a case study has been done. The data were collected through semi-structured interviews with four actors that have established their business or a part of their business in a cluster located in the south of Sweden, namely Foodhills AB, Sydgrönt, Glimåkra Åkeri AB and Air Liquide AB. These firms are all prominent actors in the cluster with similar values, all operating in some part of the food sector. Foodhills AB is the owner of the facility that houses these companies, and the founder of the Bjuv business cluster. The empirical material collected for the present study is supported by a theoretical framework consisting of different theories, that all can be tied to value creation through cluster networks. The theories presented are location, cluster, shared resources and infrastructure, transaction costs and social capital through which the framework constructs an understanding of networking, and further how it may contribute to value creation. The factors that influence a company's decision to operate in a cluster network are many and differ based on the vision and intents of said company. However, the access to a sector-connected network is an essential factor for many, with firms wanting to utilize this access to both spawn new ideas and build partnerships with other cluster-based companies. Further, operating at a favorable location with existing infrastructure and resources, which can both be accessed and shared, can cut costs and minimize use of capital for cluster-based companies. Finally, these factors will work in optimally if the cluster has a shared vision with its occupant having similar values, as the network is strengthened by unity.

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