Production of value-added dairy products: factors that influence the decision

Abstract

The main factors for the production of value-added dairy products are: business opportunity by identifying and serving a niche market; use of different inputs; and implementation of a consistent positioning strategy. The ability of a company to generate superior value over those of its competitors goes through the formulation and implementation of strategies aimed at competitive advantage, and one of the ways to do this is to offer differentiated products. This study aimed to determine how a dairy producer company decides on the strategy of adding value to its final product. For this purpose, the study opted for a case study, with qualitative and exploratory analysis, after interviews with the Executive Director, and semi-structured forms. As results, it was identified that besides opportunity, knowledge and management, two other factors contribute to the decision to manufacture different products: innovation-friendly organizational culture, and the ability to mobilize differentiated resources in this process. These factors were marked by the aspiration to raise a premium price for an excellent raw material. Elements were delineated by vertical integration strategy and trade-offs, in order to make the process efficient, maximizing the company’s resources and profits, ensuring its continuity in the market.