Producer cooperatives influence on competitive dynamics: the Azorean case

The aim of this paper is twofold: first, it aims at investigating how cooperatives compete; and second, how producer cooperatives influence the competitive dynamics of the markets where they compete. In order to answer these... [ view full abstract ]

The aim of this paper is twofold: first, it aims at investigating how cooperatives compete; and second, how producer cooperatives influence the competitive dynamics of the markets where they compete. In order to answer these questions, I will focus on the Sao Miguel’s dairy market (Portuguese island) where producer cooperatives and private firms compete side-by-side. This paper follows a case study design, where two cases are analysed: a cooperative and a private firms that are similar in several dimensions, but different regarding their organizational form (most-similar cases sampling approach). The data sources are archival data (two local newspapers – around 600 newspapers articles), in-depth interviews with the market players (4 market players -16 interviews), and other documents. The results reveal that producer cooperatives and private firms tens to have similar strategies on the consumer markets, but very different strategies in the factor market, which naturally aligns with their historical roots and organizational purposes. Additionally, the paper stands that producer cooperatives are able to increase competitive activity in the factor markets that present severe asymmetries of power between buyers and suppliers.