Market dynamics in the food industry: A new logic to sustain value creation

Stefania Vercesi

Student thesis: Master thesis

Abstract

A constant growth is underpinning the food industry, allowing for continuous product launches and industry developments. However, is this likely to continue and be sustainable in the future? The attempt of this research is to analyze current market dynamics in the food industry and provide a sound analysis of the forces shaping the sector. Through the labeling production of consumption and process of consumption have been identified the two major factors concurring at creating value in the industry, thus asking for a better understanding of the processes characterizing them. Suggestions and inputs from food experts’ and consumers’ interviews have been introduced and compared to guarantee a reliable understanding of current market dynamic. However a mismatch has been found at the very beginning of the research process concerning market complexity, separating consumers and food experts’ perspectives. Market complexity appeared to be perceived in different ways. By analyzing this contrasting preposition major findings emerged, assessing a great distance between marketers and consumers in the food industry. The paper through a careful analysis of demand and supply side factors shaping the industry, the emergence of food trends, finally highlighting consumers’ behaviours and consumption choices, aims at providing a clear understanding of market dynamics, investigating the likely sustainability of long-term value creation. Market complexity exists, and constitutes a major threat driving market polarization and potential value destruction in the industry. The biggest contribution of this research attempts to reconcile the reasons for market complexity rise, suggesting remedies and alternatives to sustain long-term value creation. The conclusion of the paper provides a clear summary highlighting the logic of the whole process from fighting market complexity, thus identifying its real drivers, till suggesting an eco-system logic to guarantee a successful development of the food industry (Davenport et al., 2006). The main model provided is instead showing the logic characterizing industry dynamics and the major capabilities needed for companies to be implemented in order to overcome the challenge of market complexity and guarantee a sustainable and self-reinforcing market value.

EducationsCand.merc.smc Strategic Market Creation, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2008
Number of pages149