Development of export-oriented agribusiness industries in the South Pacific

Abstract

This research addressed the development of export-oriented agribusiness industries in the South Pacific using new industry development, strategic management, and concepts of interorganisational and supply chain theories. The aim was to build theoretical insights that could explain and inform the development of agribusiness industries in the region.

This research was philosophically anchored within constructivist-interpretive paradigm, complemented by grounded theory principles. The overarching construct viewed the industry as a system of interacting elements comprising firms and chains directly involved in the production and delivery of an agribusiness product together with an institutional system providing regulatory, governance and legitimation support, and a resource procurement system providing basic financial, human, infrastructure, technical and research support. Grounded theory principles were used to develop understanding of the nature of these interactions, and the impact of the South Pacific and agribusiness contexts on the industry.

This research used a case study strategy. Five industries were analysed: ginger in Fiji, squash and vanilla in Tonga, vanilla and palm oil in Papua New Guinea. Case study selection was informed by a literature review of the South Pacific agribusiness industries.

It was found that natural resource-based factor conditions were important to the emergence and competitive advantage of an agribusiness industry. This contrasted with the low emphasis placed on natural resource-based factor conditions within the general strategic management literature. The strategic management literature has tended to focus on the competing behaviour of firms within an industry with a lesser focus on the surrounding industry structure. However, this research found that an industry structure was needed to support firms in their commercial objectives.

Favourable factor conditions and adequate industry structure were not sufficient conditions for industry prosperity. Firms within the industry had to develop their own competitive advantage. Firms with clear strategic objectives developed chains to control the key costs and quality drivers at the basis of their strategy.

Agribusiness related characteristics, were found to influence the nature and extent of supporting industry functions as well as firms' strategy and chain management. Agribusiness characteristics included production cycles, perishability, biophysical requirements, pests and disease threats and seasonal pattern of supply and demand.

Export focused South Pacific firms often face difficulties in obtaining market information due to local demand that is either absent or distinct from that of the international markets. There were also gaps in technical and research support. Several South Pacific firms overcame these obstacles by integrating within an existing international chain dominated by an international lead firm. These synergistic linkages have implications for national investment policies.

This thesis claims a methodological contribution in inductive case study strategy. Statements of theoretical sensitisation were developed prior to field work. These made explicit the perspective of the researcher. During data collection, these were placed aside but subsequently provided an initial organising framework for emergent theoretical insights. Insights emerged inductively from each case study and became inputs into a generalisation process. These statements were also of assistance in subsequently linking insights to the existing literature.