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- Title
Combining tradition and innovation in food companies business models. An empirical study on a sample of Italian food firms.
- Authors
Gentile, Francesco Maria; Garzia, Carmine; Slerca, Edoardo
- Abstract
This article is focused on the analysis of companies' strategic choices and their impact on economic and financial performance. In particular, we aim to examine the links between strategic choices in terms of innovation and tradition among companies operating in the Food and Beverage sector and their growth and profitability performance. In the first step, we analysed financial data from a sample of 306 companies included in the "Food Industry Monitor" database. The analysis was conducted over a period of 9 years and allowed us to define the companies' performance across four metrics: growth, profitability, productivity, and financial structure. In the second step, we conducted a qualitative analysis using a questionnaire administered to a representative sample of 306 businesses. Data collection and subsequent analyses provided us with both quantitative and qualitative data useful for defining the key characteristics in terms of innovation and tradition that enable companies to achieve better growth and profitability performance, as well as a competitive advantage in the sector. Finally, an econometric model was developed to analyse the connections between companies' strategic choices and economic performance. The construction of the econometric model was carried out on a total sample of 13,176 observations (9,963 observations based on annual financial data; 3,213 observations from a telephone-administered questionnaire). For data preparation purposes, outliers and missing data were identified. Outliers were normalized using the winsorization methodology, i.e. all outliers were replaced with the 95th and 5th percentile values. Based on the econometric model, we identified 6 uncorrelated (orthogonal) factors as explanatory variables: Tradition, Territorial Connection, Innovativeness, Craftsmanship, Corporate Social Responsibility (CSR), Downstream and Upstream Integration. To further analyze the impact of independent variables on companies' growth, profitability, and productivity performance, additional statistical clusters were developed. These clusters were obtained by studying the distribution of the previously identified factors, namely territorial connection, tradition orientation, innovation orientation, level of corporate social responsibility (CSR), and craftsmanship orientation. To test the effect of individual clusters on the dependent variables, an ANOVA test was conducted to analyse the variance of the dependent variables. In conclusion, we found that companies with a strong orientation toward Tradition exhibit better growth performance. Additionally, we observed that innovation oriented companies have higher profitability in terms of Return on Sales (ROS).
- Subjects
ITALY; FOOD industry; BUSINESS models; EMPIRICAL research; STRATEGIC planning; FINANCIAL performance
- Publication
Economia Aziendale Online, 2023, Vol 14, Issue 3, p1
- ISSN
2038-5498
- Publication type
Article