Introduction Strategies Catalyzing Agribusiness
Innovation
Background of the Problem
The context of the problem that I addressed in this study lies in the
role of business model innovation (BMI) strategies that can be used by
small-scale agribusiness leaders to gain market share in the vast untapped
agribusiness smallholder farmers’ seed market segment, which constitutes
the largest seed market segment in Sub-Saharan
Africa (SSA). The global seed market is valued at US$54 billion annually
(Bonny, 2014; Spielman & Kennedy, 2016). The market splits into the
formal and informal segments, with the later making up US$15 billion, or
27%, of the global market (Fisher et al., 2015). Despite innovations in plant
breeding (Fisher et al., 2015), modern seed technology adoption by
smallholder farmers has remained low, with between 80% and 90% of the
millions of smallholder farmers in eastern and southern Africa still using
lowquality recycled or unimproved seed (Abdi & Nishikawa, 2017;
McGuire & Sperling, 2016), which represents a lost business opportunity to
seed companies and smallholder farmers alike (AGRA, 2016; Gaffney et al.,
2016; McGuire & Sperling, 2016).
Reasons for this low innovation performance among small-scale
agribusiness leaders can be located in a number of areas, such as weak
product and process innovation
(Hullova, Trott, & Simms, 2016), low seed technology turnover (Atlin,
Cairns, & Das,
2017; Spielman & Kennedy, 2016), and inappropriate BMI (Howell, van
Beers, & Doorn, 2017; Ricciardi, Zardini, & Rossignoli, 2016; Souto, 2016;
Teece, 2018). Further exploration of strategies that small agribusiness seed
company leaders use to close this innovations gap in smallholders’ markets
is required.
Problem Statement
Small-scale agribusiness seed company leaders in southern Africa fail
to close innovation gaps in their agribusiness seed business models (BMs),
which results in loss of market share for their companies (Gaffney et al.,
2016). An agribusiness innovation gap in a business model could result in
small-scale seed companies missing 90% of the smallholder farmers’ seed
market segment (McGuire & Sperling, 2016). The general business problem
that I addressed in this study is that some small agribusiness seed companies
are negatively affected by their leaders’ failure to close innovation gaps to
capture value in smallholders’ seed markets. The specific business problem
that I addressed in this study is that some small agribusiness seed company
leaders lack strategies to close innovation gaps in smallholders’ markets.
Purpose Statement
My purpose in this qualitative multiple case study was to explore
strategies that small agribusiness seed company leaders use to close
innovation gaps in the smallholder market. The target population consisted
of 10 agribusiness seed company chief executives and operations managers
of small agribusiness seed companies located in Malawi, Zimbabwe, and
Zambia, in southern Africa, whose primary markets are smallholder farmers.
The leaders of these companies have demonstrated success in implementing
strategies to close the innovation gap. The implications for social change are
that the results of this study may offer improved seeds and food security for
more than 51 million impoverished smallholder farmers throughout SSA.
Nature of the Study
I chose a qualitative methodology for this study. Unlike quantitative
and mixed methods, using the qualitative method enables a nonlinear
exploration of a study’s central research question. Qualitative and contextual
analyses of phenomena require more indepth and focused attention to
strategies driving change. Cross-sectional case study analysis can provide
detailed phenomena analysis in a detailed manner (Yin, 2018). I did not
select the quantitative method because that research methodology is used to
examine relationships or differences among variables by testing hypotheses.
In addition, quantitative methods do not enable researchers to consider the
contexts of participants’ feelings, experiences, observations, and relevant
documentation (Myers, 2013). I did not select the mixed-method research
approach because it is a combination of both qualitative and quantitative
methods. My focus was primarily exploratory and not testing hypotheses
(Larkin, Begley, & Devane, 2014).
To address the purpose of this study, I considered case study,
phenomenological, and ethnographic research designs. Using the
phenomenological design enables the researcher to explore aspects
surrounding a specific phenomenon and participants’ lived experience
(Marshall & Rossman, 2016). The phenomenological design was unsuitable
because my study was not about the meanings of participants’ lived
experiences. The ethnographic research design is primarily about the
exploration of the beliefs and behaviors of culture-sharing groups (Marshall
& Rossman, 2016). I did not want to focus on characterizing a culture as it
pertains to the beliefs and behaviors of people; therefore,
I did not select an ethnographic design for my study.
The research design that I selected for my study was a multiple
descriptive case study. Using a multiple descriptive case study enables
flexibility and adaptability, more so than other designs and enables analysis
of a situation through picture and words as opposed to numbers (Merriam,
2014; Yin, 2018). Applying case study design principles enables researchers
to explore more deeply into the unit of analysis (Yin, 2018). I used the case
study design for flexibility, adaptability, and an in-depth exploration of the
case. Yin (2018) stated that with unique cases, the researcher can derive
comprehensive findings through a thorough study. Therefore, the qualitative
method and multiple case study design was suitable to promote an in-depth
exploration of strategies that small agribusiness seed companies in
Zimbabwe, Zambia, and Malawi, in southern Africa, used to close the
innovation gap.
Research Question
What strategies do small agribusiness seed company leaders use to
close innovation gaps in smallholders’ markets?
Interview Questions
1. What is your company background and what motivated you to
start your seed company focusing on smallholders’ markets?
2. What strategies are you using to close your company’s
innovation gap in smallholders’ markets?
3. What product and service innovations were introduced in your
company over the past couple of years as a result of your company’s
strategies?
4. How did you strategize to undertake each of these product and
service innovations?
5. What strategies did you employ to grow market share in
smallholders’ markets?
6. What, if any, are your value chain partnership strategies for the
development and delivery of product and service innovations to
smallholders’ markets?
7. How do you measure the effectiveness of your company’s
strategies for closing innovation gaps in serving the smallholders’ markets?
8. What additional information would you like to share about your
company’s strategies to close the innovation gap in smallholders’ markets?
Conceptual Framework
The conceptual framework that I used for this study was the BMI
model. Amit and Zott developed the BMI in 2001 (Amit & Zott, 2001;
Morris, Schindehutte, & Allen, 2003). The BMI model is meant to enable
practitioners and researchers to “design, describe, categorize, critique and
analyze a business model” (Morris et al., 2003, p. 734) for any company, as
an adaptation of Schumpeter’s (1942) entrepreneurship research. The BMI
model is premised on using six core elements for analyzing any BM. The six
components are (a) offering: how to create value, (b) customer: for whom
the business creates value, (c) internal capability factors: the business’
source of competence, (d) competitive strategy factors- the business’
competitive positioning, (e) economic factors: how the business makes
money, and (f) personal or investor factors: the time, scope and growth
ambitions of the entrepreneur (Morris et al., 2003). The efficacy of the six
core elements should be analyzed at foundational, proprietary, and rules
levels.
Foundational level refers to the tenets of any BM that have to be in
place in any business covering product or service offerings, market
influences, internal capability features, competitive strategy, and economic
and personal features. Proprietary level deals with the activities undertaken
by the business leaders to create a unique set of combinations of the
foundational level features. Morris et al. (2003) posited that the BMI is
applied to develop unique strategies some of which can even be patented as
unique intellectual properties. At the rules level, entrepreneurs establish
guiding principles to inform how to execute BMIs. These BMIs become the
company’s way of doing business, guiding the value equation protection
practices of the business. After verifying the BMI model’s relevance, I used
it as a useful basis for understanding the strategies used by business leaders
of small-scale agribusiness seed companies to close the business innovation
gap in smallholder farmers’ market segments in Malawi, Zambia, and
Zimbabwe.
Operational Definitions
This section includes the definition of technical terms used in this
study to help provide the reader with necessary subject matter and contextual
meanings.
Adoption rate: The pace at which smallholder farmers take up
productivityenhancing technologies such as modern seed varieties (de
Janvry, Macours & Sadoulet, 2017).
Business model: The firm’s activities to create, deliver, and capture
value through its transaction system architecture and the firm’s value chain
partners (Gronum, Steen, & Verreynne, 2016).
Business model innovation: The practice of disrupting or substantially
altering an existing BM to improve a firm’s customer reach and scale to
capture market share profitably and improve overall business performance
(Taran, Nielsen, Montemari,
Thomsen, & Paolone, 2016).
Innovation diffusion: The process through, which new innovations are
transmitted to target customers for adoption through different channels
(Mannan, Nordin, RafikGalea, & Rizal, 2017).
Innovation ecosystem: A business ecosystem where networks of
businesses and other organizations such as universities and research entities
come together to gain competitive advantage through technological
innovation (Xu, Wu, Minshall, & Zhou, 2017).
Innovation gap: The difference between a firm’s BM and what value
the firm creates for and extracts from its customers. It can also represent the
gap between the latecomer firms and frontier firms (Kong, Zhou, Liu, &
Xue, 2017; Sjodin et al., 2016).
Poundability: The ease with which a grain is convertible to flour and
its grain to flour conversion ratio (Murayama et al., 2017)
Value capture/extraction: A description of how and how much value
appropriation a company extracts from a customer base as a reward for value
created and delivered to the customers (Howell, van Beers, & Doorn, 2017).
Value drivers: The components of the dynamic business capabilities
that can competitively enhance the total value created and delivered by that
business (Taran et al., 2016).
Value proposition: The combination of products and services offered
to customers by the business for, which the customers are willing and able to
pay (Taran et al., 2016,).
It includes product and service attributes such as high performance,
reliability, durability, design, and availability to customer’s needs.
Seed variety turnover: The pace at which modern seed varieties are
introduced to replace old seed varieties (Atlin et al., 2017).
Trialability: The extent to which potential customers can experiment
with an innovation on a limited time basis before making a purchase
decision (Dutta &
Omolayole, 2016).
Assumptions, Limitations, and Delimitations
Assumptions
Assumptions are tacit or explicit beliefs, expectations, or
considerations made about how the world works believed to be true, but may
or may not be valid (Nkwake & Morrow, 2016). In my study, I worked with
selected small-scale agribusiness seed executives, and I assumed that the
chosen company executives are representative of the population of small-
scale agribusiness seed companies. My second assumption was that all the
small-scale seed company executives would be able to speak and understand
the English language and understand the questions and honestly answer
them. My third assumption was that the seed company executives have the
mandate and power to execute BMIs and would be ready and willing to
honestly answer the questions posed and not just give what they thought I
would like to hear from them as a researcher. My fourth assumption was that
closing the innovation gap in small-scale agribusiness companies may
require a change in BMs, as well as changes in capabilities, and departing
from prevailing agribusiness seed BMs.
Limitations
Research limitations are potential weaknesses that lie outside the
researcher’s control (Brutus, Aguinis, & Wassmer, 2013). Key limitations
that I anticipated in my research study are that, first, not all small-scale
agribusiness executives documented their work, which could have a
potential limitation regarding my intentions to triangulate my data collection
methods. Second, I anticipated that I may have to undertake some followup
interviews via telephone given the vast geographical spread of the research
participants across countries and such interaction may limit my capacity to
observe any body language and hence not derive the full benefits of the case
study methodology.
Delimitations
Delimitations define the boundary of my research study and are all
within the control of the researcher (Yin, 2018). My research study was a
multiple case study to explore how small agribusiness executives have
applied BMIs. Only small-scale agribusiness executives that have actually
applied BMIs were targeted in my research study. Restricting the research
study to a few small agribusiness companies may impose a reduction in the
number of themes I could potentially develop on innovation gaps.
Significance of the Study
The findings from this research study could contribute to both
business practice and social change in agribusiness seed companies and
smallholder farming livelihoods in
Africa.
Contribution to Business Practice
The results of this study may provide value to the practice of business
because some small agribusiness seed company leaders are failing to close
the innovation gap in smallholders’ markets (McGuire & Sperling, 2016).
Provision of improved empirical evidence on how small agribusiness seed
company leaders can close the innovation gap and gain competitiveness in
smallholder markets may better inform how investors, donors, and public
entities can direct such investments in more productive ways. In addition,
the findings from this study may contribute to knowledge on the potential
strategies for changing increasing business competitiveness among small
agribusiness seed companies in southern Africa through strategies for
accelerating product and process innovations.
Implications for Social Change
The implications for positive social change may include the potential
to enable small agribusiness seed company leaders to develop and adopt
better BMIs. Agriculture is the backbone of African economies (Kansiime &
Mastenbroek, 2016). Africa is home to 12% of the global population and
will be home to 31% of the global population by 2050 (United Nations,
2016). Smallholder farmers make up 70% of Africa’s population and
contribute 80% of the food consumed in Africa (AGRA, 2016). The
improvement of agribusiness seed companies’ BMs could catalyze
developing a dormant industry on which many people in Africa derive their
livelihoods. Improving the BMIs of agribusiness seed companies may lead
to food and nutrition security for African families currently living in
poverty.
A Review of the Professional and Academic Literature
The examination of the literature review is by section and theme. I
analyzed and synthesized the literature in the context of the conceptual
framework discussed within this study. In this review, I examined literature
which relates to the success factors for integration of BMIs (value
proposition, value creation, value exchange, and value capture). In addition,
I analyzed scholarship on emerging lessons from innovation ecosystems,
frugal innovation, buyer-supplier innovation, innovation culture, and
innovation diffusion, and how these relate to small agribusiness seed
companies.
I started the literature review with an overview of agribusiness seed
BMs and seed systems, followed by the concepts of BMI, product and
process innovation, open innovation and culture, innovation ecosystems,
innovation diffusion, and buyer and supplier innovation. The literature also
includes strategies for successful project management for the introduction of
new business innovations. It also contains discussion about successful BMI,
and seed technology innovation strategies for market growth. Where
appropriate, I compared and contrasted various points of view to premise the
relevance of this study.
In constructing my literature review, I obtained information through
various databases including Business Source Complete, Google Scholar,
ProQuest Central, Emerald Management Journals, ABI/INFORM Complete,
Science Direct, BMI and seed systems, and Sage Management and Business
studies. The search included keywords and phrases such as BMs, BMI,
innovation strategies, sustainable development, seed varietal turnover,
innovation systems, value creation, and value capture. The search yielded
227 articles relevant to the topic of study. A total of 211 (93%) are peer
reviewed, and 215 (95%) have a publication date between 2014 and 2018.
Of the studies covered, 159 support the literature review equating to 68% of
the total sources. In the literature review section, 150 (94%) are peer
reviewed, and 121 (94%) were published between 2015 and
2018.
Agribusiness Seed System in Sub-Saharan Africa
Importance of innovation to agribusiness seed leaders. There is
widespread acknowledgement by agribusiness company owners, farmer seed
consumers, governments, agricultural scientists, and development workers
of the importance of seed as a vital element in boosting agricultural
production and the role seed plays in conveying new innovations to
smallholder farmers (Mabaya, 2017; Kusena, Wynberg, & Mujaju,
2017; McGuire & Sperling, 2016; Sapkota, Joshi, Kattel, & Bajracharya,
2017; Spielman & Kennedy, 2016). Spielman and Kennedy (2016) pointed
out the importance of seed systems and seed industry growth in developing
countries as a mechanism for advancing agricultural productivity and
improving food security. The role of policy in promoting that industrial
growth has been disappointing as policymakers battle to balance the policies,
rules, and regulations to the development needs of their different countries
complex set of societal and economic trade-offs. Spielman and Kennedy
(2016) identified two trade-offs as static trade-offs, which occur in how
benefits of innovation are distributed among different role players in the
seed system, and intertemporal trade-offs, which exist when new innovations
threaten genetic diversity required for future innovations.
Kusena et al. (2017) pointed out that there is also acknowledgement
by the World Bank and the International Panel of Experts on Sustainable
Food Systems (IPES) of the important role of the smallholder farming
system as the main driver for smallholder farmers productivity, profitability,
and poverty reduction driver in Africa. Smallholder farmers constitute a
large market segment for small-scale agribusiness company leaders. Despite
the widespread identification of the need for favorable enabling
environments, the agribusiness seed industry remains largely
underdeveloped in the SSA region with as many as 80% of the farmers
having to resort to using own saved unimproved seed (AGRA, 2016; Larson,
Muraoka, & Otsuka, 2016; McGuire & Spielman, 2016). The global average
of farmers using own saved seeds is 35% indicating that agribusiness seed
companies are more developed in other regions than SSA (Mabaya et al.,
2013). Although SSA accounts for 15% of the total maize area cultivated
globally, it contributes only less than 5% of the global harvest (Gaffney et al,
2016). Mechanisms on how smallscale agribusiness seed company
executives can profitably reach more of the more than 51 million
smallholder farmers throughout SSA with better seed technology
innovations are necessary to improve their food and nutrition security in the
face of recurrent rainfall drought (Lowder, Skoet, & Raney, 2016).
Role of agribusiness seed companies. Adenle, Manning, and Azadi
(2017) reiterated that the SSA agribusiness seed businesses are
underdeveloped because the sector’s agribusinesses players remain largely
informal with several small agroenterprises. There are, therefore, significant
opportunities for agribusinesses to grow as mechanisms for economic
growth and enhancing agricultural growth and meeting the rising urban food
demands while linking to rural sources of agricultural production (Adenle et
al., 2017). Agribusiness seed company leaders need functional BMIs to
develop a dormant industry on which 82% of all smallholders in the region
are dependent, working on less than 2 hectares of land each (Munyi & De
Jong, 2015). The major drivers to agribusiness seed companies’ growth in
SSA are the rising African population and the urgent need to meet the food
needs of the continent and achieve sustainable economic growth with
resultant social effects. Agriculture offers significant potential for
agribusinesses as the continent has untapped water resources with as much
as 65% of the world's uncultivated agricultural land available on the
continent (Adenle et al., 2017; Dawson, Martin, & Sikor, 2016; Smale et al.,
2015).
Africa, however, still faces low agricultural productivity and low
technological innovation, yet most of the continent’s population is
dependent on agriculture for their economic well-being (Adenle et al., 2017).
Keys to unlocking the latent agribusiness potential in Africa lie in the
development of key infrastructures such as roads and energy sources, trade
liberalization, and innovation (Adenle et al., 2017; Pamuk, Bulte, &
Adekunle, 2014).
In addition, the agribusiness contribution to the gross domestic
product (GDP) in Africa is 13 times more than in the United States,
demonstrating that the agribusiness/agriculture ratio embodies many
functions such as agro-based innovations, marketing, supply chain
management, processing, transportation, and distribution (Adenle et al.,
2017). To unlock the inherent business growth opportunities necessary for
contributing to agribusiness competitiveness in Africa, the following factors
of (a) the financial services and macroeconomic management, (b) economic
infrastructure, (c) technological innovation, (d) land tenure system, (e)
political stability, and (f) social infrastructure need to be addressed (Adenle
et al., 2017; Long, Blok, & Poldner, 2017).
Keyser (2013) took a seed trade perspective in analyzing the SSA
trade flows and identified a number of challenges and opportunities for
enhancing trade across the region. The ingoing hypothesis was that Africa
remains largely dependent on food imports for its consumption needs as its
food output is far below its population growth (Durkin, 2015; Keyser, 2013;
Marechera, Muinga, & Irungu, 2016). SSA countries spend nearly $30
billion to $50 billion on food imports with projections of $150 billion by
2030, if there are no corresponding increases in food production growth. The
seed industry is central to any agricultural productivity growth in SSA.
Other regions have been able to increase their cereal yields at an average of
1.2% to 2.3% from 1980 to 2000, whereas SSA remains at 0.7% (Keyser,
2013). Significant productivity enhancements in other regions have been on
the back of improved seed industry growth and development premised on
innovation (Keyser, 2013).
In comparison, China, with its human population of 1.36 billion, uses
its agricultural sector as a foundation industry to meet the food demands
necessitating the modernization of the agricultural sector in an
environmentally friendly manner (Xu, Li, & Wan, 2017). Due to crop
science innovations, China now produces 25% of the world’s food on less
than 9% of the world’s land and feeds 20% of the world’s population (Xu et
al., 2017). The key areas of agricultural science innovation implemented by
China are in (a) agricultural innovation capacity development, (b) industry
technology breakthroughs in seed, disease control, and processing
equipment, and (c) technical innovation in terms of water saving and other
energy efficient systems (Xu et al., 2017).
The business case for African seed systems development. Van
Ittersum et al. (2016) analyzed the question of whether SSA can produce
adequate food to meet the rising global demand for food by 2050 given the
global drivers of food price volatility for major crops, limited arable land for
crop production, and the growing population. The authors focused on
analyzing the potential to close the yield gap between available seed
technologies and their potential (Van Ittersum et al., 2016; Waldman,
Blekking, Attaric, & Evans, 2017). Yield gap is defined as the difference
between a seed technology’s present performance versus its full potential (de
Janvry et al., 2017; Van Ittersum et al., 2016). Van Ittersum et al. also
analyzed SSA present self-sufficiency ratio in staple cereal, which is
reported to be 0.8 to 1, which measures the ratio between domestic food
production versus the total food demand (Van Ittersum et al., 2016). The
authors criticized the limited growth of the agricultural sector in SSA
because it has been the major driver in other regions through total factor
productivity. For the SSA region, the total factor productivity growth has
been less than 1% per year for the last 2 decades (Van Ittersum et al., 2016).
Van Ittersum et al. (2016) analyzed data from 10 countries in SSA.
The 10 countries were chosen on the basis that they jointly account for 54%
of the SSA 2010 population and account for 58% of arable land in SSA. The
authors estimated SSA’s cereal demand by 2050 based on per capita
consumption in relation to projected income growth, looking at five major
cereals: maize, millet, rice, sorghum, and wheat. Van Ittersum et al. further
estimated cereal production potential based on existing yield gaps for the
different cereals per target country. The authors found that cereal yield
growth is happening at a slower rate than population growth for eight of the
10 study countries because population growth is projected to be fourfold
between 2010 and 2050. Van Ittersum et al. estimated that maize yield
growths will need to rise to 72% of present yield levels with smallholder
farmers. Closing the seed yield gap represents a business opportunity for
agribusiness seed company leaders (Mannan et al., 2016; Kong et al., 2017).
Agribusiness seed description. Seed can be defined as a technology
transfer agent or mechanism to enhance food production and productivity
that stimulates local and national economic development and
entrepreneurship (Louwaars & de Boef, 2012; Poku, Birner, & Gupta, 2018).
Mabaya et al. (2013) classified seed into four main categories: (a) cereal
food crops, (b) pulses and oils, (c) tuber and root crops, and (d) vegetables.
Second, Mabaya et al. added that the formal seed systems comprise the
breeding, seed production, processing, marketing, quality control, and
certification as legislated in each country. In addition, Durkin (2015) and
Keyser (2013) articulated the requirements for seed trade in the SSA region
starting from breeding of seed to variety release and commercial sale. The
key steps are testing procedures such as the value for cultivation (VCU) and
distinctiveness, uniformity, and stability (DUS) tests (Wattnem, 2016).
Given the complex seed variety testing requirements, plant breeders
can take anywhere between seven to ten years or even more to register new
seed varieties (Keyser, 2013; Munyi & de Jong, 2015). Such long lead times
derail the rate at which new seed innovations get to the market and
resultantly negatively affect agricultural productivity and the ability of
agribusiness leaders to close the technology innovation gap (Abate et al.,
2017; AGRA, 2016, McGuire & Sperling, 2016). The latest assessment of
modern seed variety adoption rates indicates a low 35% adoption of modern
seed varieties on all total cultivated area in SSA (Abate et al., 2017). As a
result, between 80% and 90% of the millions of smallholder farmers in
eastern and southern Africa (ESA) still plant low quality recycled seed,
which represents a lost business opportunity to seed companies and
smallholder farmers alike (AGRA, 2016; McGuire & Sperling, 2016). The
reasons for this low product uptake range from low seed technology turnover
(Atlin et al., 2017;
Spielman & Kennedy, 2016), seed unavailability, inadequate information,
and high seed prices for and by smallholder farmers respectively (Fischer et
al., 2015). In addition, it takes an average of 14 years for seed varieties to be
replaced with modern high yielding varieties (Abate et al., 2017; Khanal,
Adhikari, & Wilson, 2017).
Keyser (2013) also provided key distinctions in the types of seed
produced. The first type of seed is the hybrid seed, which is generated from
a controlled method of pollination, in which germplasm of plants is selected
for their particular traits and is mixed to produce the required seed variety.
Such seed is called first generation (F1) seed and requires rapid replacement
as replanting the same seed or its subsequent generations results in yield
losses of between 30% to 40% (Keyser, 2013). The second seed type is the
open pollinated variety (OPV), which is developed through the cross-
pollination of strong and genetically diverse seed parents producing variable
height, grain color, cob size, disease resistance, and time to maturity. In
other words, there is wide variation in the characteristics of the crop unlike
in the hybrids where there is uniformity.
The OPVs do not lose yield potential with subsequent replanting of
the same crop. The third type of seed is the traditional landraces, which is
seed that has been passed down for generations from farmer to farmer
exchanges. These seeds tend to have the same features as OPVs except that
they are more diverse and contain many genetic features and are dominant in
the informal seed systems discussed later. The yields from landraces are
much lower than OPVs and hybrids. The fourth category of seed is the
closed pollinated seed, which comprises crops that self-pollinate such as
legumes, rice, and wheat (Keyser, 2013). Abate et al. (2017) and Erenstein
and Kassie (2018) indicated that there are three seed types typically grown
by SSA farmers these being (a) hybrid seeds, (b) OPVs, and (c) local
traditional varieties. Abate et al. (2017) and Erenstein and Kassie (2018)
focused on maize as the main crop in SSA grown in 48 countries and with
the highest calorie consumption of 348 kcal per person per day, making
maize seed a strategic product for seed companies.
Seed technology innovation gaps. The seed technology gaps in SSA
seed systems stem from the key limitations to SSA’s seed industry
development and seed trade through lengthy seed variety release periods as
well as the cumbersome trade requirements across borders (Atlin et al.,
2017; Keyser, 2013). Each country has national seed variety release
committees that meet at different intervals to approve or decline approve the
release of new seed varieties for sale in their countries (Joshi et al., 2017;
Keyser, 2013; Munyi & de Jong, 2015). Most of these variety release
committees meet only once a year due to resource limitations. Even when a
new seed variety is approved, it may take an additional two to three
additional seasons to build the new seed variety seed to sufficient quantities
to market it as seed (Gaffney et al., 2016). Multinational seed companies and
international research organizations have invested in plant breeding to
produce new seed varieties (Fisher et al., 2015). Such research and
development investment by agribusiness seed companies and related public
research centres in Africa yielded 160 drought-tolerant maize varieties
between 2007 and 2013 (Fisher et al., 2015).
These research and development efforts have not necessarily
translated into a corresponding technology adoption as measured by market
penetration of seed companies and adoption of modern varieties by farmers.
Other than for maize seed, market penetration by small-scale agribusiness
seed companies with such seed remains low
(Kusena et al., 2017; McGuire & Sperling, 2016; Mondal et al., 2016).
Abate et al. (2017) analysed the different types of maize seed varieties
grown by smallholder farmers (seed customers of seed companies) in 13
countries in the 2013/2014 crop season in SSA. The study is important in
assessing agribusiness seed companies’ performance as it remains low
amongst the smallholder farmer customers as a measure of how seed
company leaders are matching seed customer requirements (Abate et al.,
2017).
Abate et al. (2017) established that over 500 maize seed varieties were
grown in the 13 African countries of focus in the 2013/14 crop season. From
the same survey, 32% of all seed grown were hybrids, 23% were improved
OPVs, while 46% were local traditional varieties (Abate et al., 2017). The
overall weighted average age of the seed varieties was 15 years indicating
that seed variety turnover cycles were too slow and agribusiness leaders
were failing to close the technology innovation gap (Abate et al., 2017). The
research article is useful to my doctoral research topic of BMI as value
proposition is a critical element of the BMI framework. Seed innovations by
seed companies are a critical component of the value proposition. Abate et
al. (2017) traced the seed industry innovation history in SSA since maize
breeding started on the continent in the first decade of the 1900s in
Zimbabwe and noted that nearly 1700 maize seed varieties have since been
released between 1950 and 2014. The rate of varietal turnover is a good
measure of the seed companies’ product innovation performance (Abate et
al., 2017; Atlin et al., 2017).
Structure of agribusiness seed systems. Agribusiness seed systems
are broadly considered to be made up of two sectors- the formal and
informal seed systems (Erenstein & Kassie, 2018; McGuire & Sperling,
2016; Poku et al., 2018; Sisay, Frans, Verhees, & van Trijp, 2017). To
amplify the classification, Louwaars and de Boef (2012) established core
criteria for distinguishing the formal and informal seed systems based on the
following parameters:
1. Objectives: whether a seed system has a focus on livelihoods, food
supply or commercial income generation.
2. Types of farmers targeted: whether the seed systems target
subsistence oriented versus commercially oriented farmer customers
3. Crops of focus: the extent to which the seed system focuses on food
crops for own consumption or cash crops grown for specific
marketing purposes
4. System of seed production: whether the seed production methods are
predominantly focused on self-pollinating versus hybrid seeds
production systems
5. Orientation of the seed sector: the extent to which a seed system has a
food security orientation versus a market or profit orientation.
6. Type of organisation promoting the system: the dominant players in
the sector among the public, private company, multinational,
nongovernmental organization (NGO), farmers’ cooperatives or
informal farmers’ groups.
Poku et al. (2018) shared the same view that there are broadly two
categories of seed systems- the formal and informal or traditional seed with
the former involving plant breeding and government seed certification and
marketing by the private sector while the latter involves farmer led
traditional varieties development and exchange among farmers. In support of
the same agribusiness seed sector classification, Mabaya et al. (2013) added
a typology of formal seed sector development into five stages of
development of (a) nascent, (b) emerging, (c) early growth, (d) growth, and
(5) mature. These seed sector development phases are based on farmers
adoption of improved seed, breeding and variety release by agribusiness
seed companies, development of the policy and regulatory environment and
the extent of private sector participation in the seed sector. Informal seed
systems are characterized by use and retention of farmers' own seeds, which
are guided by informal farmer exchanges and no government regulation
(Mabaya et al.,
2013).
Seed Sector Analytical Framework. Erenstein and Kassie (2018)
supported the same classification and defined the formal seed system as an
organized seed system driven by public and private seed companies and the
informal seed system as farmer driven and institutionalized characterised by
seed saving, seed exchange, and seed production by farmers. In a 2018
survey, Erenstein and Kassie (2018) established that the informal seed sector
is still a major source of seed for smallholder farmers in east Africa with as
much as three quarters of the seed needs of farmers met through the informal
seed sector.
Formal seed system features. The features of a formal seed system
are provision of tested seed varieties produced under scientific
methodologies of plant breeding, controlled multiplication run by public or
private sector scientists. The focus of the formal seed system tends to be for
a limited focus of crops such as hybrids, high value horticulture crops whose
commercial offtake can cover “all the overheads, including transportation
and quality management costs, and offer profit” (Louwaars & de Boef,
2012.p.45). Crops such as legumes and most cereals are generally excluded
from such a system owing to competition from the informal seed system.
The formal seed system is characterised by three types of players-
multinational, national companies, and smallscale seed companies
(Louwaars & de Boef, 2012).
The public sector plays critical roles in both informal and formal seed
systems with a heavy leaning towards the formal seed system. Key roles
include:
1. Research in breeding through varietal development through subsidy
arrangements, seed quality control and quality seed promotions
2. Policy and regulatory: provide frameworks that guide private sector to
invest in breeding, seed production, as well protecting seed
companies’ intellectual property rights and seed quality control
through varietal release, seed certification, and phytosanitary
measures for import and export (Louwaars & de Boef, 2012).
Limitations of formal seed system. The formal seed system is
premised on the quality of the breeding programme as it guarantees the
genetic material for producing any seed. In the absence of new genetic
material, the formal seed system cannot offer something new that farmers do
not already have (Louwaars & de Boef, 2012). Farmers purchase new seed
to access new varieties. Seed production quality guarantees quality seed and
efficient delivery systems enable seed company leaders to reach their
markets with the right quality and quantity of seed at the right prices at the
right times. Any weaknesses in such a system renders the formal seed
system inferior to the informal seed system (Abdi & Nishikawa, 2017;
McGuire & Sperling, 2016; Rubyogo et al., 2016).
Informal seed system features. The main distinctions of the informal
seed system from the formal seed system are around the methods of seed
selection, production, and diffusion by farmers, which is predominantly seed
exchange among farmers (Louwaars & de Boef, 2012; Poku et al., 2018;
Rubyogo et al., 2016). Farmers exchange, or gift each other with seeds
(relatives or neighbors) or bartering as well as buying from local markets
(Louwaars & de Boef, 2012). The informal seed system also has to satisfy
the availability, quantity, quality, and price criteria. Framers use the informal
seed system because they are familiar with the seed and regard those seeds
as better adapted to their local conditions and taste preferences (Poku et al.,
2018).
Limitations of informal seed systems. The major limitations of the
informal seed system relate to four major factors. First, seed is not readily
available: farmers face periodic shocks due to droughts, civil unrest, or
floods or poverty, which doesn’t enable them to put seed aside from their
previous harvest. Under such circumstances farmers have to resort to seed
from relief operations, which means a significant loss in genetic resources.
Second, “seed supply of major crops is anti-cyclical when compared to crop
production” (Louwaars & de Boef, 2012, p.44). When farmers experience a
good harvest, there is an abundance of seed to exchange, barter, gift, or sell.
When farmers experience a poor harvest, there is limited seed available for
the farmer and their social network
(Challinor, Koehler, Ramirez-Villegas, Whitfield, & Das, 2016; Louwaars &
de Boef, 2012). Third, the intricacies involved in producing particular crops
are more complicated and informal seed systems may suffer from poor
germination capacity and disease infestations within the seed. Additionally,
the seed varieties genetic qualities may degenerate. Fourth, there is slow
adaptation of crops in changing farming conditions such as climate change,
new diseases.
Despite all these challenges, the informal seed systems offer some
advantages as good farmers are able to produce good seed for exchange or
sale within their networks (Louwaars & de Boef, 2012). It is no wonder then
that 80% of all seed used in Africa comes from the informal seed systems
with some crops registering as much as 100%
(Borda-Rodriguez, Johnson, Sahw, & Vicari, 2016; Coomes et al., 2015;
Louwaars & de Boef, 2012; McGuire & Sperling, 2016). Such seed sector
performance led some scholars to question the classification of seed systems
into formal and informal archetypes (Kusena et al., 2017; McGuire &
Sperling, 2016). The prevailing classification of the seed industry into two
dominant analytical framework of informal and formal seed sectors
(Erenstein & Kassie, 2018; McGuire & Sperling, 2016; Poku et al., 2018) is
premised on the argument that seed systems transition across a continuum
from basic to mature seed systems, which entails a reduction in the role of
the informal seed systems towards the formal seed. This analytical
framework is considered simplistic and focuses on seed systems
development from pre-industrialization to full-scale maturity. The
proponents of the second integrated analytical framework argue that seed
systems are a lot more complex and need to be analysed as integrated
systems where both the formal and informal seed systems co-exist and are
complementary (Louwaars & de Boef, 2013).
This framework is akin to the BM alliances and an innovation ecosystem
(Adner, 2016; Bouncken & Fredrich, 2016).
Kusena et al. (2017) further argued that smallholder farmers’
agricultural success is directly linked to the viability and resilience of seed
systems with seed being the basic unit of crop production and its quality key
to determining yields. Informal or local seed systems account for 60% to
100% seed sources for smallholder farmers in Africa (Kusena et al., 2017).
In a 2017 survey, Kusena et al. found that 75% of farmers surveyed grew
sorghum with farmer led seed systems being the predominant source of seed
accounting for 68% reinforcing the importance of farmer-led seed systems.
McGuire and Sperling (2016) also concluded that 50,9% of farmers in six
SSA countries (including Zimbabwe) sourced their seed from the informal
seed systems (Abdi & Nishikawa, 2017; Kusena et al., 2017; Rubyogo et al.,
2016).
Seed business model features. There are three interrelated steps in
the formal seed system- (a) varietal development, (b) seed multiplication, (c)
seed marketing and promotion. Seed breeding involves breeder seed or first-
generation seed and foundation seed or second-generation seed. Seed
multiplication involves the production of commercial certified seed, which is
the final seed sold to the farmers. Seed certification is undertaken by the
public-sector authorities at every stage of the seed cycle. Marketing and
promotion concern the passing of information to the farmers about the seed
varieties and market the seed for the farmers to purchase. Within each of
these seed development and marketing stages, there can be market failures,
which can lead to inefficient resource allocation (Poku et al., 2018).
Seed technology breeding models. Seed varietal replacement or
turnover remains the most important seed system performance indicator but
by no means the only one (Atlin et al., 2017; Louwaars & de Boef, 2012).
With more than 80% of the seed planted in SSA coming from the informal
seed systems. Why has the informal seed system thrived? Louwaars and de
Boef (2012) articulated a number of reasons for this state of affairs. First,
low market access by the formal seed system has meant that farmers have to
resort to the informal seed system. Second, remote locations remain
underserved by the formal seed system and remain largely inaccessible to
private enterprises. Third, the farmers limited purchasing power due to low
access to financial products or credit to buy seed means that they have to
rely on exchange and barter systems replete in the informal seed sector.
Forth, the formal seed systems have remained largely narrow in their
product range and diversity to cater for the farmers food and cash crop
requirements. Fifth, organisational and institutional limitations of the
breeding programmes that have hindered them from adapting their crop
breeding programmes to the specificities of the varying climatic conditions
of the smallholder farmers in remote locations have left the smallholder
farmers at the mercy of the informal seed systems.
There are increasing efforts to integrate both the formal and informal
seed systems with farmers increasingly integrated into formal seed systems
as seed growers and seed customers similar to an integrated BM (Dawson,
Martin, & Sikor, 2016; Kulins, Leonardy, & Weber, 2016; Louwaars & de
Boef, 2012; Ricciardi, 2015). In addition, agrodealers are increasingly
integrated into the private seed companies formal seed systems supply
chains thereby extending the seed distribution network.
Differences between the first and third world seed systems. There
are significant differences between the SSA and the European and American
seed systems. The European and North American seed systems are built
around private seed sector players with significant in-house breeding
programmes and marketing infrastructure and a highly well-informed
customer and consumer base (Liua et al., 2015; Louwaars & de Boef, 2012).
The development of the SSA seed systems followed the same model albeit
driven by public institutions with a development orientation as opposed to a
commercial orientation. As a result, the SSA seed systems were primarily
focused on seed breeding, multiplication, and distribution with little
marketing (Louwaars & de Boef, 2012; Poku et al., 2018; Witcombe et al.,
2016). The seed breeding programmes via international research
organisations bred and released new seed varieties into the national public
research institutions who in turn passed on the seed into the public extension
systems for distribution to farmers through subsidized input distribution
programmes. With the introduction of structural adjustment programmes in
the 1980s and 1990s, SSA governments were forced to transform a number
of these “public seed units into private or public market and profit-oriented
seed enterprises” (Louwaars & de Boef, 2012, p.51).
In contrast, Atlin et al. (2017) underscored the importance
agribusiness seed companies’ profitability and how the commercial viability
of the seed companies are tied to profitable farmer customers that grow
high-yielding seed varieties and are profitable in their agribusiness ventures.
The case of the U.S. Corn Belt farmers and China where seed companies
generate new improved seed varieties every 3 to 5 years is considered the
seed industry innovation standard (Atlin et al., 2017). Most seed systems in
SSA have germplasm that is older and was developed over 30 years ago
under different climatic and agricultural conditions to the present crop
growing conditions (Atlin et al., 2017;
Campbell et al., 2016).
In addition, national seed breeding and seed company innovation
programs in SSA trail behind the multi-national corporations (MNCs)
breeding programs that have more superior innovation programs (Atlin et
al., 2017). As a result, the performance of farmers served by the MNCs in
maize (corn) is an average of 8.8 tonnes per hectare in the United States
compared to 1.8 tonnes per hectare in SSA, which translates into a lost
business opportunity for seed companies in SSA as seed company
profitability is tied to their seed customer profitability (Atlin et al., 2017).
The options for improving the agribusiness seed company seed
innovations is to reduce the seed variety turnover cycles from ten years to 3
to 4 years through improved breeding innovations linked to national seed
breeding programs. Such innovations should also involve strong innovation
alliances with international public research organizations that have global
seed breeding programs akin to innovation clusters (Atlin et al., 2017). Such
alliances constitute innovation ecosystems, which are networks of
organizations working together to achieve collective value creation and
value capture (Breuer & Ludeke-Freund, 2017; Garcia-Castro & Aguilera,
2015; Husain, Dayan, & di Beneditto, 2016).
Seed systems transitions after economic liberalization. The net
effect was a focus by these private enterprises on a few commercially viable
seed varieties and a much narrower seed customer base of large commercial
farmers for hybrid maize at the expense of all other seed varieties (Louwaars
& de Boef, 2012; Poku et al., 2017). This vacuum created by both the public
seed and private seed entities left a gap that a combination of NGOs and
public research centers readily filled working directly with farmers in the
informal seed sector. Lately, there has been a rise in the number of
smallscale seed enterprises also called local seed businesses that have
entered the formal seed system serving the bottom of the pyramid with a
number of seed varieties. The smallscale seed companies represent a shift
from the public sector and NGO developed centered seed system
development orientation to a commercial seed system serving the remote
rural farmers (Beuchelt & Zeller, 2016; Tantalo & Priem, 2016).
Seed sector challenges after economic liberalization. The
importance of using improved crop varieties is a critical ingredient to
agricultural productivity and business viability for seed companies as
subsequent seed sales are based on farmers previous agricultural season
performance. A well-functioning seed system that transmits improved seed
varieties to farmers is therefore critical (Poku et al., 2018). With many
governments liberalizing their agricultural seed systems, the transition to
private sector seed provision has not been effective and the limited
complementarities between the government and private sector players has
led to weaker institutional arrangements. The key focus areas of institutional
coordination center around the seed breeding, multiplication, and marketing
(Poku et al., 2018).
The focus of privatization was to enhance smallholder farmers access
to improved seed through a profitable and vibrant private sector seed system
(Poku et al., 2018).
While there have been encouraging signs of private sector entry into the seed
sector in Africa, technology adoption as measured by farmers adopting
improved seed varieties has remained disappointingly low (Abate et al.,
2016).
Low seed technology adoption. Technology adoption studies have
tended to focus on the socio-economic and agro-ecological factors and their
interface with farmers adoption patterns, which are all demand side factors.
Few studies have focused on the supply side factors influencing the supply
of improved seed varieties for farmers to adopt (Poku et al., 2018). There are
no known studies addressing the BM aspects of seed technology
development and marketing and their adoption by the farmers in SSA (Tell
et al., 2016; Sivertsson & Tell, 2015).
Breeding and varietal development market failures. By its nature,
new variety development is capital intensive and requires large capital
outlays to access germplasm, test the seed in trial plots (research and
development), and the requisite equipment and technical competence to
generate new seed varieties (Atlin et al., 2017; Poku et al., 2018; Spielman
& Kennedy, 2016). First, the long lead times to development of new
varieties serves as a deterrent of under-resourced small-scale seed companies
who then have to depend on varieties developed by public sector research
organisations or Consultative Group on International Agricultural Research
(CGIAR) institutions (Kratzer, Messner, & Roud, 2017; Poku et al., 2018).
Second, even when seed companies have the resources to invest in
developing new seed varieties, the uncertainties regarding payoffs remain a
deterrent as adoption of that particular technology by smallholder farmers
remains uncertain. Besides, farmers can recycle their older seed varieties and
not purchase the new seed varieties therefore upsetting the investment
payoff expectations of the seed companies (Poku et al., 2018). The public
good nature of the publicly released seed varieties and OPV, which can be
recycled create a non-excludability disincentive for private companies,
which discourages private investment in generating new seed varieties
(Greco, Grimaldi, & Cricelli, 2017; Poku et al., 2018). Large seed
companies with the requisite resource base therefore choose to focus on seed
varieties with excludability features and hence the preoccupation of hybrid
seeds by multinational and national seed companies and the underserving of
smallholder farmers with improved seed varieties.
Government research institutions are therefore left with no choice but
to step in and engage in varietal development to address the non-
excludability problems of OPVs on the grounds of food security and major
export crops grown by smallholder farmers (Poku et al., 2018). The state run
programmes receive support from the CGIARs for new varieties.
Institutional failures result from the weak linkages between these public
research institutions and farmers leading to misalignment of developed seed
technologies and farmers expectations with resultant low adoption of those
new technologies (Poku et al., 2018).
Seed Multiplication and certification market failures. The second
major seed BM challenge is the seed technology non-excludability problem
that persists into seed multiplication and certification from a price of seed
compared to that of the commercial grain generated from that seed
especially in the case of the OPV seed (Poku et al., 2018). Hybrid seeds tend
to have a higher yield than OPV seeds and therefore offer higher incentives
to seed customers from a profitability perspective and multinational and
national seed companies tend to concentrate multiplying and marketing
those hybrid seed varieties. An attendant problem is the information
asymmetry faced by the potential farmer seed customers, which, dissuades
them from adopting new seed varieties and instead the farmer seed
customers opt to replant their retained grain as seed (Poku et al., 2018). This
is partly the reason why many smallholder farmers still obtain their seed
from the informal seed system (Ghimire, Wen-Chi, & Shreshta, 2015).
Similarly, the public research bodies breeders involved in seed
multiplication face incentive challenges from a funding as well as a
performance measurement perspective. Public researchers/breeders are
measured on the number of new seed varieties released and not the quantity
of breeders’ seed produced from already registered seed varieties (Poku et
al., 2018). As such researchers and breeders in public research entities
concentrate on developing new seed varieties as opposed to multiplying the
seed already available. Such actions limit the amount of available breeders’
seeds required by smaller seed companies that do not have their own seed
breeding programs. Another institutional failure is the weak seed inspection
service to certify seed in remote field locations, which creates quality
uncertainties among the seed customers (Poku et al., 2018). The situation is
not helped by the fact that most governments have these seed certification
services centralized in the major cities. A solution can be found in BM
alliances to ameliorate the costs (Bounchen & Fredrich, 2016; Xu et al.,
2017).
Seed marketing and promotion market failures. There are a
number of causes of market failure in seed marketing and promotion. First,
because some seed varieties have non-excludable benefits (OPVs and self-
pollinating seed varieties), seed companies tend to focus on hybrid seeds,
which may not necessarily be what smallholder farmers want to buy (Poku
et al., 2018). Second, those seed companies that invest in marketing and
promotion of OPVs and self-pollinating seed varieties face the challenge of
inability to recoup their investment as other seed companies marketing the
same publicly registered seed varieties benefit from their marketing and
promotion investment (Gans & Ryall, 2016; Poku et al., 2018). This is the
typical free rider problem “where those benefitting from a service are not
paying for it, which results in under-provision of a service” Poku et al.
(2018, p.32). Thirdly, smallholder farmers are geographically dispersed and
the transaction costs of serving those remote locations are prohibitive and
hence most seed companies tend to concentrate on smallholder markets that
are easily accessible (Kansiime & Mastenbroek, 2016; Rueda, Garret, &
Lambin, 2017).
In arguing for adaptive seed systems, Atlin et al. (2017) pointed out
four key factors of consideration as (a) seed yield potential, (b) seed end use
quality, (c) agronomic fit between the seed and farmers’ cropping system,
and (d) profitability considerations for the seed company and the end user
farmers. The key challenge in SSA is that seed systems are not generating
new improved seed varieties fast enough to catch up with changing climatic
conditions. As a result, smallholder farmers keep growing older varieties
that are older than 20 years with resultant yield underperformance and low
purchasing power of seed company products (Atlin et al., 2017; Ortega,
Waldman,
Richardson, Clay, & Snapp, 2016).
In a separate study, Walker et al. (2014) examined seed technology
diffusion as a measure of research and development (R&D) effectiveness
and the relative contribution of such R&D to incomes and poverty reduction
in SSA (Walker et al., 2014). The research project measured the diffusion
and impact of improved varieties in Africa (DIIVA). The 2014 study was
part of a longitudinal study started in 1998 covering 20 crops cultivated on
over 83% of the total agricultural land area in Africa (Walker et al., 2014).
The methodology for the DIIVA survey was a combination of household
surveys and panels of experts from National Agricultural Research Systems
(NARS); the CGIAR, and private sector seed companies’ representatives
(Walker et al., 2014). The main conclusions were that the area covered by
modern varieties (MVs) had moved from 25% in 1998 to 35% in 2010
(Walker et al., 2014). The annual growth rate of new technology adoption
was therefore a disappointing 1.45% per annum (Walker et al., 2014). The
authors concluded that the velocity of seed varietal change was 14 years
meaning that farmers held on to seed varieties for as long as 14 years before
they took up new varieties
(Fisher et al., 2015; Walker et al., 2014).
BM and BMI background. BM and BMI have attracted increasing
attention from management practice and academic research (Kranich &
Wald, 2017). The BM is an important tool for holistically describing and
explaining a business as well as developing and implementing a business
strategy and implementing innovations or bringing innovations to market in
a competitive manner (Kranich & Wald, 2017). In developing and
implementing BMs, consistency is considered key to align the BM elements
to maximize their outcomes in what can be called virtuous cycles that lead to
competitive advantage (Kranich & Wald, 2017). Conversely, low BM
elements consistency leads to low business performance. BMI helps to
rearrange the BM elements and make them more consistent through
innovating around those elements or how they are arranged in the BM
architecture (Kranich & Wald, 2017).
Origins of BMs and BMI. The origins of the BM concept are found
in management practice and academic research and their research have
entered a strong exponential growth phase (Kranich & Wald, 2017). Despite
this acknowledged importance of the BM and BMIs, there is no unanimous
understanding of the BM concept because of the interdisciplinary nature of
the subject matter. Literature on BM spans strategic management, innovation
and technology management, and entrepreneurship (Foss & Saebi, 2017;
Kranich & Wald, 2017; Saebi, Lien, & Foss, 2017). The wide application of
the BM concept for different functions in different fields demonstrate the
utility of the BM concept yet at the same time complicates research as there
is no convergence of knowledge as each field develops independent of the
others (Kranich & Wald, 2017).
BM background. Management research has treated BM research as a
novel unit of analysis (Saebi et al., 2017). Despite the growing popularity of
BM research, there is no universally agreed upon definition with many
definitions revolving around a firm’s value proposition, mechanisms of
value capture and the architecture of the BM elements. Scholars and
management agree that the choice and design of BMs is central to exploring
and exploiting new business opportunities, even as they have not reached
consensus on how to define BMs and BMI. Saebi et al. (2017) adopted
Teece’s BM definition, which posits that a BM is a management hypothesis
regarding “what customers want, how they want it, and how the enterprise
can organize to best meet those needs, get paid for doing so, and can make a
profit” (Teece, 2010, p.172). The concept of a business hypothesis is akin to
a research hypothesis in, which researchers collect data to test the hypothesis
with the business leaders testing their hypothesis through the market
response they obtain from customers (Saebi et al., 2017).
BMI challenges. Researchers and managers agree that the constitutive
elements of BMs are (a) value offering, (b) value architecture, and (c) value
capture or revenue model (Spieth & Schneider, 2015). BMI is considered a
highly challenging management activity separate from product or service
innovation, which business leaders have tended to focus on as a management
endeavor (Spieth & Schneider, 2015). The challenge with BMI is twofold.
First, it challenges the well-established processes and routines that may be
working and delivering value (Christensen, Bartman, & van Bever, 2016).
Spieth and Schneider (2015) argued that existing BMs create inertia and any
new BMIs challenge the status quo. Second, BMI is a demanding leadership
task that requires experimentation and learning and new levels of creativity
and market expertise and investment into the unknown (Spieth & Schneider,
2015).
BM value creation and value capture. Scholars agree that new ideas
that are good will create consumer value and also attract resources while the
bad ideas fall aside (Priem, Wenzel, Koch, 2017). Examples of these
phenomena are noted in companies such as Uber and others that have taken
on the same idea, such as Lyft and Didi along with Taobao and others
(Priem et al., 2017). The essence of these BMs is that the business leaders
driving them created value and then captured it and supports the notion that
firm success is predicated on value propositions that generate value for the
consumers. BMs are all about value creation to increase benefits to
consumers while enabling value capture for profitable delivery of that value
(Priem et al., 2017). Successful firms therefore derive their success from (a)
focusing on downstream value chain activities such as product markets as
opposed to upstream factor markets, (b) a strong emphasis on value creation
before value capture, and (c) demand creation activities (Priem et al., 2017).
Background to BM and BMI research. BMs and BMI are topics
that have been receiving significant scholar-practitioner research attention
over a 50-year period (Wirtz et al., 2016). Between the period 1965 and
2013, a total of 16 950 articles were generated on BMI. Their findings
indicated that out of 16 950 articles, 2 823 were peer reviewed. Of the peer-
reviewed articles, 471 applied a case study method, 111 used multivariate
methods while 2241 were conceptual designs (Wirtz et al., 2016). Despite
the recognition given to this topic, it is surprising that there is a dearth of
empirical research into agribusiness seed company BMIs that can close the
mismatch of seed technology requirements by smallholder farmers and what
seed companies can provide (Fisher et al., 2015). While the robust research
was conducted in the seed sector, it has suffered from a narrow focus, which
paid no attention to the seed companies BMIs. There has been a focus on the
new product development from a scientific perspective (Coomes et al., 2015;
Fisher, et al., 2015; Hampton, Conner, Boelt, Chastain & Rollston, 2016;
McGuire & Sperling, 2016; Violon, Thomas, & Garine, 2016).
Historical phases of a BM. Ritala et al. (2018) mapped the three
phases of business leaders' responses to societal needs. The first wave was in
the early 1970s when corporate social responsibility and environmental
issues came to the fore in the wake of the Bhopal accident (Ritala et al.,
2018). The second wave was in the late 1980s when business leaders started
advancing the triple bottom line for strategic competitiveness. The third
wave started at the turn of the century with increasing globalization
pressures and global supply chains and a sharper focus on societal
challenges such as bribery and corruption, human rights, environmental
protection and political influence (Ritala et al., 2018; Schaltegger, Hansen &
Ludeke-Freund, 2015).
Two BM research streams. Priem et al. (2017) and Wirtz et al.
(2016) framed two main different streams that characterize BMs as
articulated logics of the firm and a pattern of activities. In essence, the two
streams are inherently similar in that one focuses on the firm logic that
enables activities that create value to be undertaken underpinned by the same
firm logic as the architectural core of the business (Priem et al., 2017). The
history of BMs can be traced to the internet era in the mid-1990s when
digitization of products and markets proliferated and created new ways for
firms to interact with consumers and even co-create value with consumers
and capture value through digital platforms at the same time that were not
thought of previously (Wenzel et al., 2017; Wohlgemuth et al., 2016). There
was widespread interest to understand how such firms built their businesses
digitally as they rendered some non-digitized firms obsolete with new
entrants in the newspaper and funeral industry thriving at the expense of
incumbents (Karimi & Walter, 2016; Wenzel et al., 2017). A number of
incumbent firm business leaders soon realized they had to more than digitize
but address the underlying BM fundamentals (Mehrizi & Lashkarbolouki,
2016; Wenzel et al., 2017). Since that period, research on BMs has shed
light on how business leaders design their firms, develop, innovate, renew
and innovate their business logics (Priem et al., 2017).
BM research in various fields. Foss and Saebi (2017) commented
that there is growing interest in research on BMs and BMI beyond the
community into other fields such as technology management, international
business, and sustainability. Over the period 1980 to 2015, 7 391 BM and
349 BMI publications were recorded in the Scopus database (Foss & Saebi,
2017). Within this milieu of BM and BMI research, theories have been
advanced based on dynamic capabilities, threat rigidity, and prospect
theories, entrepreneurship transaction cost economics, innovation,
replication and competition (Foss & Saebi, 2017). The authors pointed out
that there is still little agreement on what is the unit of analysis for BM and
BMI and the actual definitions of the two terms. Foss and Saebi (2017)
further attribute the discordant views to (a) the several attributes variously
influencing firm performance, (b) different cognitive and linguistic schemas
being applied in BM and BMI, and (c) different conceptual representations
of organizations applied in BM and BMI research. In framing this research
challenge, the authors drew parallels with the transaction cost economics
(TCE), which was initiated in 1937 but did not take off until the mid-1970
when Oliver Williamson made TCE research through the articulation of the
unit of analysis and the role it plays in research (Foss & Saebi, 2017).
Agribusiness seed BM research. The second group of research on
agribusiness seed companies focused on the research and development of
agribusiness seed companies in new seed product development as well as the
industry consolidation efforts of agribusiness seed companies and their
effect on seed access by smallholder farmers (Fugile, 2016; Lapple,
Renwick, & Thorne, 2015; McGuire & Sperling, 2016; Poku et al., 2018;
Sarkar & Pansera, 2017; Tell et al., 2016). The research in this group also
focused on the smallholder farmers’ seed needs with very little attention paid
to seed company
BMIs (Barth, Ulvenblad, Ulvenblad, 2018; McGuire & Sperling, 2016;
Ricciardi, 2015; Shackleton, Ziervogel, Sallu, Gill, & Tschakert, 2015). The
closest research study to BMI among seed companies was that of Sperling,
Ortiz and Thiele (2016) in, which they focused on the features of a
functional seed system covering aspects such as seed availability,
accessibility, variety and seed quality. Sperling et al. adopted a
productcentric focus and made no mention or paid no attention to BMI
efforts of the agribusiness seed company leaders. Rather, they focused on
what smallholder farmers need as seed customers. There is, therefore,
limited research on agribusiness seed companies’ BMI efforts and what they
need to do to address the BMI gap in servicing smallholder farmers’
markets.
Meta-analysis of BMs. The third group of literature focused on meta-
analysis of research studies in BMI tracing the origins of the topic and the
distillation of workable elements of BMI (Christensen et al., 2016; Pironti,
Cautela, & Christodoulou, 2015; Taran, Nielsen, Montemari, Thomsen, &
Paolouse, 2016; Wirtz et al., 2016). From this group of literature, the value
drivers’ paradigm of BMs emerged with the following BM constructs. First,
is value proposition (VP) concerned with what the company offers. Second
is the value segment (VS) focused the question of to whom the company
makes an offer. Third, is the value configuration (VCo) concerned with how
the company develops and distributes its offering cost effectively. Fourth,
the value network (VN) focused on who collaborates with the company to
develop, distribute, and sell its offering. Fifth is the value capture (VC)
focused on how much, and in what way the company generates revenues
(Taran et al., 2016). The two major shortfalls from all these valuable BMI
studies are (a) their lack of focus on the third world context, and (b) the
absence of any research in the agribusiness seed industry.
Why BMs are important. Well intended business ventures fail in the
presence of good market opportunities, novelty of ideas, appropriate
resource endowment, and talented entrepreneurs and most of the causes can
be traced back to the deployment of inappropriate BMs (Boucken, Lehmann,
& Fellnhofer, 2016; Morris et al., 2003). A study of BMs is therefore
important to ensure that business ventures succeed in creating societal value
for its investors, the community, and the environment.
Foss and Saebi (2017) concluded that BM and BMI research fills a
critical gap in macro management research on firms as systems and how
they are shaped by and shape the macro environment, a fact lost in strategy
thinking by linking strategy and innovation. In addition, BM and BMI
research does not represent wicked problems since its constructs can be
defined, dimensionalized, linked to existing theory and can be clearly
articulated into explanatory and predictive tasks (Foss & Saebi, 2017). The
authors further pointed out that different BMI typologies require different
types of leadership as BM changes are a function of top management in the
firm. The research article was useful for my doctoral research in how it
provided a BMI typology, one I could apply as a framework for assessing
BMI of small agribusiness seed companies.
Importance of BMs in third world countries. Howell, van Beers,
and Doorn (2017) analyzed the role of BMs in tackling the dual business
challenge of value capturing and value creation through frugal innovations
for both business profitability and socio-economic development impact. This
study was a useful contribution as most frugal innovation studies were
focused on South East Asia and not Africa (Howell et al., 2017). Africa
offers fertile ground for frugal innovations given its rapid economic growth
with its inflation-adjusted gross domestic product between 2007 and 2015
standing at 4.6% compared to the global average of 2.2% (Howell et al.,
2017). Also, Africa's mobile penetration rates are one of the highest in the
world, which has ushered new payment modes and BMs such as money
transfer (Howell et al., 2017). Howell et al. (2017) commented that doing
business in such emerging markets does not automatically lead to profit-
making and local development impact and appropriate BMs are significant
at the base of the economic pyramid (Roome & Louche, 2016; Sarkar &
Pansera, 2017).
Suitable BMs, therefore, need to move beyond consumption of
products but also balance that with a willingness to pay (value creation) and
appropriate costs structures (value capture). Therefore, value is not just in
the product innovation but also in financing and distributing models to reach
the consumers (Howell et al., 2017; Rauter, Jonker, & Baumgartner, 2015)
and balancing the value creation and value extraction equation, which is
difficult to attain in resource-constrained rural Africa such as agribusiness
seed company BMs (Weissbrod & Bocken, 2017).
BMs Rationale. Ritala et al. (2018) examined the adoption of
sustainable BMs by Standard and Poor (S&P) 500 companies. Ritala’s et al.
research was influenced by the public scrutiny larger firms face and the
potential controversies that arise on perceived misalignment among profit,
people and the planet. There are three drivers for this research. First, there is
increasing pressure for company leaders to reduce their negative footprint on
consumers or suppliers and the local community. Second, climate change is
focusing firms to green their supply chains. Lastly, new global
environmental threats are imposing demands on business leaders to react in
meaningful ways through their business operations (Ritala et al., 2018). The
authors sought to examine BMs that not only deliver economic value but
also address broader social and environmental goals (Ritala et al., 2018).
Ritala et al. (2018) utilized Bouncken and Fredrich's (Bouncken &
Fredrich, 2016; Yip & Bocken, 2018) and Schaltegger, Lüdeke-Freund, &
Hansen’s (2016) taxonomy of sustainable BM archetypes, which is made up
of nine archetypes divided into environmental, social and economic
categories as major innovation categories in line with the triple bottom line.
The authors analyzed data from firms listed on the stock exchange between
the period 2005 and 2014 with publicly accessible reports and press releases
on their BMs. Ritala et al. established that the focus on sustainable BMs
increased from 2006 as the energy-efficiency movement gained prominence.
There was also a sharp increase in the BM archetypes of maximizing
material and energy efficiency, encouraging sufficiency, inclusive value
creation and scale up solutions (Ritala et al., 2018). The authors concluded
from this research that business leaders of S&P 500 firms broadly follow
profitable societal trends instead of adopting a proactive BMI pursuit. The
research is limited in that the authors did not explore the extent to, which
these initiatives were embedded into mainstream BMs as opposed to being
treated as peripheral corporate activities. The study was of interest to my
doctoral research nonetheless in establishing the link between organizational
strategy and BM archetypes.
Innovation failure. In a separate study, Christensen et al. (2016)
examined the massive failure in BMI and the wide-ranging concern among
chief executives with their companies' BMI limited success. The authors
built their work on two surveys. The first survey was conducted by PWC in
2015 and concluded that "54 percent of CEOs worldwide were concerned
about new competitors entering their market" (Christensen et al., 2016,
p.31). The second study was conducted by the BCG in 2014 with 1,500
senior executives of whom 94% indicated that they had attempted BMI with
mixed levels of success.
Societal inequality and sustainable development innovation
drivers. Stock Obenaus, Slaymaker, and Slinger (2017) lamented the failure
of economic development to close the inequality gap faced by many
economies fueling migration, displacement, rising urbanization and
environmental degradation. Within that societal dilemma lies the role of
technological innovation in pursuit of inclusive industrial growth (Stock et
al., 2017). In premising the role of technological innovation in addressing
societal challenges, Stock et al. applied the Bruntland Report definition of
sustainability as “development that meets the needs of the present without
compromising the ability of the future generations to meet their own needs”
p.216. The authors posited that there are three development pathways faced
by business leaders, which are (a) maintaining the status quo, (b) reforming
and (c) transformation. Stock et al. (2017) also posited that there are three
pillars of sustainability to be considered in innovation, which are
environment, society, and economy. Eco-innovation is therefore considered
to be the innovation pathway that fosters the required balance among the
sustainability drivers (Rauter, Jonker, & Baumgartner, 2015; Stock et al.,
2017).
Technology as an innovation driver. Howell et al. (2017) analyzed
the role of information technology in influencing frugal BMIs in Africa
driven by two factors. The two factors under consideration are (a) the
decreasing prices per unit of computing power, and (b) increasing computing
power (Howell et al., 2017). These two factors are critical as they have
resulted in reduced information costs and the promoted inclusion of
previously excluded market players such as communities in far-flung remote
areas in Africa through mobile phone penetration. With such technological
advancements come opportunities for development of new BMs that can
tackle the perennial challenges of value creation and value extraction, which
is difficult to attain in resource-constrained rural Africa.
Institutional drivers of innovation. Herrera (2016) explored the
questions of what institutional mechanisms drive innovation for impact as
well the drivers for enterprises to engage their stakeholders in BMI. The
study was premised on the fact stakeholder engagement enhances knowledge
sharing, co-creation opportunities and offers companies early market mover
advantages (Herrera, 2016).
Herrera (2016) conducted three case studies through triangulation
methods of literature review, documents review, site visits and observations
and interviews with 30 managers, employees, business partners and other
stakeholders. The study applied the innovation for impact (I4I) conceptual
framework that posits that corporate social innovation addresses social
challenges while simultaneously addressing shareholder value (ibid). The
conceptual model has five stages of BMI in I4I as (a) assessment, (b) design
or ideation, (c) development, (d) systematizing, and (e) institutionalization.
BM definition challenges. There are varying opinions on what a BM
is despite the increasing focus on BMs research (Foss & Saebi, 2017;
Kranich & Wald, 2017;
Morris et al., 2003; Saebi et al., 2017). At the heart of the confusion is the
interchange of terms such as BM, strategy, business concept, revenue model,
and economic model all of, which are intended to communicate the same
message of BMs (Foss & Saebi, 2017; Kranich & Wald, 2017; Saebi et al.,
2017). As a result, three categories of classifying the plethora of BMs have
emerged as the (a) economic, (b) operational, and (c) strategic labels.
The economic label concentrates on how the business generates
profits and covers elements such as revenue sources, pricing, company cost
structures, margins, and business volumes (Morris et al., 2003). In summary,
the economic model concerns how the business will make and sustain its
profits. The operational label is about how the business is configured in
respect of internal processes and its operational infrastructure to generate
value. The key decision points point to the business’ production or service
delivery methods, how to administer and channel resources and manage the
company logistics (Morris et al., 2003).
The strategic level relates to the business strategic market positioning
and how to and whom to work with in the market place in order to
differentiate the business and deliver value to the customers (Morris et al.,
2003). In summary, therefore this category of work concerns how the
business leaders choose their customer segments, vary their offerings, and
deliver and capture value.
Definition of BM. Based on the constellation of the different
categories into, which several BMs can be classified into, Morris et al.
(2003) defined BMs as “a concise representation of how an interrelated set
of decision variables in the areas of venture strategy, architecture, and
economics are addressed to create sustainable competitive advantage in
defined markets” (Morris et al., 2003, p.727).
While the term BM originated from electronic commerce with an
original focus on revenue streams for web-based firms, the concept has
evolved to capture all business types with a focus on product offerings, value
creating and capturing process, as well as the firm logics (Morris et al.,
2003). All in all, there are as many as 24 different elements associated with
the BM frameworks with key ones being value offering (11), economic
model (10), customer relationship (8), partner/value network (7), internal
systems (6), and target markets (5) (Morris et al., 2003; Schneckenberg,
Velamuri, Comberg, & Spieth, 2017).
BMs as activity and component systems. Kranich and Wald (2017)
proposed that a BM definition has to meet three criteria of (a) allow for the
breakdown of the BM into different elements, (b) reflect management
practice, and (c) be transferable from extant research to real life situations.
Two main directions of BM definitions are prevalent in literature: (a) BM as
an activity system (Amit & Zott, 2015; Pisano, Pironti, & Rieple, 2015), and
(b) BMs as components and sub-components (Morris et al., 2003). The first
definition emphasizes value creation and interconnections between activities
of the firm. It gets very specific to the analyzed businesses and misses
generalisability
(Kranich & Wald, 2017).
The component-based definition provides three major levels of the
BM and nine elements as (a) value proposition, (b) value creation
architecture, (c) profit model (Kranich & Wald, 2017). The second definition
better encapsulates the value proposition and delivery, value creation, and
value capture elements in a BM (Clauss, 2017; Kranich & Wald, 2017).
Criticisms have been levelled against the component-based approaches for
their lack of empirical foundations. Spieth and Schneider (2016) provide an
empirical basis for the component-based BM approach based on multiple
workshops with innovation experts, management and practitioners (Kranich
& Wald, 2017). Additionally, other researchers (Saebi et al., 2017;
Schneckenberg et al., 2017) have confirmed findings that support the
elements of the component-based BM model proposed by Morris
(Kranich & Wald, 2017).
Theoretical underpinnings of BMs. The core theoretical models that
underpin
BMs research span several fields with business strategy (Porter, 1985, 1996),
Schumpeterian theory based on growth and profit aspirations (Fritsch, 2017;
Schumpeter, 1934; 1942), resource based theory (Gulbrandsen, Lambe, &
Sandvik, 2017), strategy network theory (Hussain, Dayan, & Di Beneditto,
2016), cooperative strategies (Roome & Louche, 2016), competitive strategy
(Voinea & Eamus, 2017), and transaction cost economics (De Vaan, Vedres,
& Stark, 2015) being the foremost theories. Out of all these theories, the BM
research field has distilled core elements as (a) firm value proposition: what
the firm choose to undertake as business activities, (b) the firm’s value
network: whom them business leaders choose to work with to create and
deliver that value, (c) configuration: the combination of resources to produce
specific innovations, and (d) transaction efficiencies and decisions that have
to be made to safeguard cost efficiencies
(Morris et al., 2003; Wenzel, Wagner, & Koch, 2017).
BMs’ integrative framework. Morris et al. (2003) distilled from all
these theories a generalizable BM framework that is applicable to all firms
and serves individual firm requirements without necessarily oversimplifying
a firm’s BM. The authors focused on three decision levels: foundation,
proprietary, and rules and further provided specifics within each of the
levels. At a foundational level, business leaders need to make decisions of
what the business is and is not, what products and services to offer. At the
proprietary level, business leaders make decisions unique to the firm based
on business leaders’ value creation aspirations in light of core capabilities
available to the firm. At the rules level, business leaders provide rules or
guidelines to shape the business operations and influence what strategic and
investment decisions are made at the foundational and operational levels
(Morris et al., 2003).
Foundational level. The core logic of this BM level is to define the
basic components of the business covering six critical aspects: value
proposition, customer, internal processes and competencies, value capture
(profit logic), competitive strategy, and growth and time objectives of the
entrepreneur (Morris et al., 2003). All entrepreneurs have to address these
generic elements covering the what of the firm as opposed to the how.
1. Value creation: this encompasses the product/service offering of the
firm and how that value will be delivered to the customers. This is
summarized as the firm’s value proposition.
2. Customer: this covers the market the business leader chooses to
compete and they customer types, geographic coverage and the
customer requirements.
3. Core competencies: this aspect captures the business’ internal
capabilities and skills set that lie at the heart of the business.
4. Marketplace positioning: this aspect covers how the business will
position itself relative to the competition based on its points of
difference to establish is durable.
5. Value capture: the business logic for making money premised on
four elements of (a) the operating leverage of the firm based on the
fixed and variable costs structure, (b) high or low volume business
format, (c) business profit margins aspirations, and (d) revenue model.
Entrepreneur’s time, scope, and size ambitions (investment
model): given that not all entrepreneurs have the same aspirations, BMs are
similarly customizable to the entrepreneur’s business aspirations. There are
four models of (a) subsistence: in it for meeting basics of survival, (b)
income model: to generate stable ongoing income streams, (c) growth
model: growth oriented to maximize on capital growth, and (d) speculative
model: to demonstrate the value and growth prospects of the business and
sell it (Morris et al., 2003).
Proprietary level. This BM stage obtains from entrepreneurs creating
unique combinations that are specific to their business to create durable
points of difference and sustainable advantage that make a difference to the
foundational level elements (Morris et al., 2003). The customization of the
proprietary level elements means that replication of the BM by the
competition is not easy.
Rules level. At this stage, the entrepreneur creates rules that govern
the BM that are reflected as strategic actions or strategic rules (Wells, 2016),
or priority rules (Hyytinen, Pajarinen, & Rouvinen, 2015). Such rules inform
decisions business leaders make regarding whom to partner and how to
partner and distinguish firms with the same set of capabilities, resources and
operating in the same market targeting the same customer segments (Morris
et al., 2003).
BM framework application. Morris et al. (2003) provided an
example of Southwest Airlines to demonstrate the BM framework in
practice and exemplify how the airline’s success was a function of the BM.
At the foundational level, the business leaders covered the what of the
BM through:
§Offering: choice of selling services only through narrow
standardized offerings and internal service delivery via direct
distribution (Morris et al., 2003).
§Market factors: the BM is predicated on business to customer (B2C)
via sales to individual travelers and business to business (B2B) via
corporate sales. Internal capability factors: the BM production and
operating systems are structured to deliver on the offering and
respond to the chosen target market.
§Competitive strategy: the BM presents the airline as a deliverer of
operational excellence and dependable airline.
§Economic factors: the firm’s revenue sources are fixed with high
operating leverage based on high sales volumes at low margins.
§Growth/exit model: the BM is that of growth orientation aimed at
maximizing the capital gains.
At the proprietary level, South West Airlines’ model departs from
other airlines BMs through innovation in how the airline operates in durable
and sustainable strategic fit with a unique operating system enabling its
business leaders to offer a unique value proposition (Morris et al., 2003).
The core elements of the BM at the proprietary level are:
§Offering: high frequency short haul, low fare, fully refundable fares
served directly to customers with no travel agents involved and no
business class seats.
§Market factors: targets its services to 59 airports in 30 states to
carefully chosen cities that best fit the airline’s business operating
model.
§Internal capability factors: employees chosen for best fit and airline
less congested and low-cost airports in small cities with no code
sharing with any other airlines.
§Competitive strategy: points of difference around on time arrivals
and departure, low fares and fun-filled service.
§Economic factors: high volume low cost fares delivered efficiently
at a profit despite industry downturn.
§Growth/exit model: the business leaders pursue a growth model.
At the rules level, the business leaders are guided by a set of strategic
and tactical rules that delimit the management actions to maximize the
effectiveness of the BM
(Morris et al., 2003). The strategic and tactical rules are applied as follow:
§Offering: how much should be charged for a route and food costs per
passenger.
§Market factors: which cities to ply and attaining at least 85% market
penetration in local markets.
§Internal capability factors: managing at least 20 departures per day
from each airport, the maximum distances to be travelled a day,
maximum flight time and maximum flight turnaround times in every
airport (Morris et al., 2003).
§Competitive strategy: the firm’s pursuit of best on time record in the
industry.
§Economic factors: cost per passenger mile standard in dollar terms.
§Growth/exit model: setting the growth rate of the firm and return on
investment.
Internal and external fit. For BM sustainability, internal and external
fit are required with the former concerned with how internal configurations
or logics suit the firm’s activities and the latter seeking an appropriate match
between the firm’s core logics with the external environmental conditions
(Morris et al., 2003). An example of an untenable BM is that of an MNC
agribusiness seed company BM that is predicated on high operating leverage
and high margins trying to serve the low-income price sensitive smallholder
seed customers. Small-scale agribusiness seed companies with low cost
leadership operating at low margins fare better in serving the smallholder
farmers. BMs will periodically require adaptation to match the changing
external environment (Morris et al., 2003).
In support of the Morris’ et al. (2003) framework, Spieth and
Schneider (2015) outlined the specific elements that need to be accounted
for under each dimension. For the firm’s value offering or value proposition,
the following elements apply: (a) target customers, (b) product and service
offering, and (c) market positioning of the firm. The sum total of these
elements pointed to what benefits the firm provides, whom it targets and its
points of difference from the competition (Spieth & Schneider, 2015). For
the value creation dimension, four elements are proposed as (a) core
competencies and resources, (b) internal value creation, (c) external value
creation, and (d) distribution. The sum total of these elements provided
insights into the resources and competences upon, which the firm’s value
offering are based, activities within and outside the firm’s boundary that
deliver that value and enable the firm to reach its customers (Spieth &
Schneider, 2015). The firm’s revenue logic or value capture innovation
dimension is covered in two dimensions of (a) earnings logic and costs logic.
These two dimensions serve to explain how a firm earns money and from,
which revenue streams and manages its cost drivers.
BM evolution. A BM is not static and constantly evolves based on
pressure from the external environment and changes in the business internal
environment. BMs therefore go through episodes of “specification,
refinement, adaptation, revisions, and reformulation” (Morris et al., p.733).
Morris et al. summarized BMs as providing entrepreneurs with a framework
for (a) their strategic choices in what to offer and to whom and how, (b)
creating unique combinations particular to the resource endowments of the
firm (c) developing activity sets suitable for the strategic choices they made
earlier, and (d) balancing the alignment of elements of strategy, business
logic, economics, and the growth or exit model (Morris et al., 2003). A BM
is therefore important for guiding entrepreneurs and employees on how to
deploy the business capabilities to respond to the market conditions to meet
the growth aspirations of the entrepreneurs (Morris et al., 2003).
BMI definition. BMI focuses on the BM as the subject of innovation
and is defined as innovating the theory of the business as a strategic
innovation to improve an existing BM or create a new BM (Kranich &
Wald, 2017). At the heart of the BMI is a quest to change the business to
reposition the firm through creating new or expanding existing markets
through existing or new value propositions (Kranich & Wald, 2017).
While such innovations were already covered in literature (Fjeldtsad &
Snow, 2018; Fritz, 2017; Schumpeter, 1934), a BMI is also about pursuing
and exploiting opportunities as a dynamic capability (Kranich & Wald,
2017).
BMI constituents. BMs still lack conceptual elaboration despite
gaining importance in scholarly and management circles (Schneckenberg et
al., 2016). In spite of this lack of conceptual clarity, there is agreement
among researchers that the constitutive elements of BMs are (a) value
proposition: what organizations deliver to their customers from the
perspective of the customers (demand), (b) value creation: what companies
deliver to the market in the form of new products and services (supply), and
(c) value capture: how firms generate revenues, manage costs, and make
profits (prices over total production costs) (Schneckenberg et al., 2016).
BMI definition. Foss and Saebi (2017) posited that the unifying
definition of a BM and BMI are premised on stressing the architecture of the
firm's value creation, delivery, and appropriation mechanisms. The authors
define this firm architecture as a "set of relations among elements in a
system through directionality, complementary, and information content"
(p.5). In that regard, Foss and Saebi (2017) developed a four type
BMI typology model premised on the scope (modular versus architectural)
and novelty (new to firm versus new to the industry). First in this typology is
evolutionary business innovation, which maps naturally occurring changes
that occur in a company. Second, is the adaptive BMI, which entails
complete BM changes that are new to that firm but already exist in the
industry. Third, is the focused BMI, which is a new innovation in which the
firm seeks to secure new markets not covered by its competition such as was
the case with Nintendo launching Wii to non-gamers evading competition
from
Microsoft's Xbox and Sony's PlayStation (Foss & Saebi, 2017). Fourth, is
the complex BMI, which is primarily driven by new industry entrants such
as Uber and Airbnb, which disrupt the entire industry.
Spieth and Schneider (2015) defined BMI as innovation focused on
the business as a unit of analysis as separate from product and process
innovation. A number of factors drive BMI with globalization, rapid
technology developments, deregulation, customers willingness to pay, and
sustainability pressures considered key and influencing business leaders
BMI decisions (Spieth & Schneider, 2015). At the heart of BMI are
considerations of how to achieve superior growth rates, how to capture
significant value from innovations and maximize on the firms’ resources and
capabilities.
Schneckenberg et al. (2016) refers to BMI as the design of new BMs
in new firms or reconfiguration of existing BMs (Schneckenberg et al.,
2016). Researchers agree that BMI is much more complex than product or
service innovation as the unit of focus is the business itself not just its
products or services (Schneckenberg et al., 2016). BMI therefore presents
ambiguous and uncertain situations for managers of incumbent firms as such
business leaders need to understand the value drivers and their
interdependencies and make decisions that will maximize resources
available to the firm. Similarly, business leaders of new or entrepreneurial
firms have to content with establishing new innovative BMs that will be
accepted in the market and can attract the required resources to their
business ventures (Schneckenberg et al., 2016).
In the context of such uncertainty, business leaders respond with
coping mechanisms through strategic moves such as customer engagement
and close alignment with supply chain partners in new product development
environments. In the context of BMI, Schneckenberg et al. (2016) identified
five coping strategies that business leaders adopt to craft new value
propositions, deliver value creation, and establish new value capture
mechanisms. The five strategies are (a) customer centricity: better
understanding the customers’ requirements to inform the firm’s value
proposition, (b) value co-creation: engaging the customers as part of the
value network to design new value propositions, (c) capability evolution:
adding to the firm’s core capabilities to enhance how the business can
respond to shifting market conditions, (d) ecosystem growth: growing the
range of ecosystem partners to enhance the firm’s value creation, and (e)
adaptive pricing: to enhance the firm’s value capture mechanisms.
As firms get established and get profitable from particular BM
configurations, they run into resource allocation constraints stemming from
structural and processual inertia as routinization sets in to maximize on
profits (Schneckenberg et al., 2016). New BMs are therefore considered too
risky particularly when the incumbent firms have a working value creation
and value capture formula. BMI implies breaking the existing value creation
and value capture formula in favour of developing new value creation, value
proposition, and value capture configurations that are different from the
existing profitable operations and established organisational routines and
processes
(Schneckenberg et al., 2016).
BMI elements. There are arguments as to what actually qualifies as
BMI (Foss & Saebi, 2017). One school of thought is that only innovations
that results in new markets or extending present markets to cover new
customers with new value propositions should qualify as BMIs (Joffre,
Klerkx, Dickson, & Verdegem, 2017; Schuessler & Dubinsky, 2016).
Another school of thought is that BMI is an internal firm activity, which
should lead to rearranging of the BM elements. Based on all these
arguments, a BMI is defined as alterations effected on the BM components
that result in innovations in the firms’ value proposition, value creation,
value capture in a distinguishable manner (Clauss, 2017; Souto, 2016).
Customer centricity. In line with changing customers’ needs and
behaviors, business leaders seek to closely align their value propositions to
the needs of the customers. The resultant close alignment is generation of
higher profits driven by improved customer value. Inherent in this coping
mechanism is the business leaders’ investment in closely monitoring
customers behaviors and needs (Schneckenberg et al., 2016).
Value co-creation. Business leaders cannot generate value creation
propositions purely from a supply side perspective. Rather, value creation
offers have to be steeped in what customers need and hence business leaders
cope with uncertainty by actively engaging and collaborating with customers
to co-generate value meaningfulness to the customers (Schneckenberg et al.,
2016). Customer centricity and value co-creation underpin the business
leaders’ coping strategies with uncertainty to reconfigure the firm’s value
propositions.
Capability evolution. As business leaders seek to revamp their value
creation activities, they resort to adding to their arsenal of know how
(capabilities) from a technological and structural perspective. Business
leaders also have to shed redundant capabilities and reorganize the firm’s
value creation activities through internal change management efforts
(Schneckenberg et al., 2016).
Ecosystem growth. Innovation often spans company boundaries and
the range of players in a firm’s ecosystem determine the array of capabilities
business leaders can tap into for enhancement of their value creation
activities. External perspectives are therefore necessary in BMI as there are
interdependencies among firms and their BMs. Expanding the range of value
network partners through an innovation ecosystem therefore expands value
creation capabilities of the business leaders (Schneckenberg et al., 2016).
Complementary capabilities and knowledge contribute to better value
creation outcomes and reduced risk for the incumbent firm.
Adaptive pricing. Business leaders need to capture the value of all
other value proposition and value creation investment. For new firms, value
capture represents attraction of debt or equity capital to finance the business
venture as well as generating the right revenue streams. For incumbent
firms, the BMI have to be underpinned by better revenue streams at a better
profit formula than the incumbent BM. Business leaders therefore have to
overcome customer inertia, which can serve as an adoption barrier stopping
customers from taking up the new value proposition (Schneckenberg et al.,
2016). Other typical challenges business leaders have to cope with are
customers comfort in stable forecasting of their expenses, which the new
BM may seek to destabilize through flexible payment options or going after
untapped market segments
(Schneckenberg et al., 2016).
Summary. How business leaders cope with uncertainty is dependent
on, which value element of the BM they seek to reconfigure. It does not
necessarily follow that all three value elements of the BM need to be
reconfigured. Customer centricity and value co-creation drive value
propositions and seek to align the customers’ needs and expectations to what
the firm delivers as its value proposition. Business leaders therefore need up
to date market analytics to constantly reconfigure their value propositions
(Schneckenberg et al., 2016). Capabilities of the firm and ecosystem growth
are requisites for the firm’s business leaders to gain complementary skills
and reduce risks of generating new value creation elements. Adaptive
pricing enables business leaders to maximize on the firms’ value capture
elements by overcoming customer inertia and adoption barriers as well as
reaching untapped market segments (Schneckenberg et al., 2016; Verdu-
Jover, Alos-Simo, & Gomez-Gras, 2017).
Challenges of defining BMs. Foss and Saebi (2017) concluded that
the BMI research stream has so far fallen into four streams of (a)
conceptualizing BMI through definitions and conceptualizations of BMI, (b)
BMI as an organizational change process covering such as aspects as stages
of BMI and organizational capabilities, (c) BMI as an outcome with a focus
on the emergence of BMI in specific sectors and organizational forms, and
(d) consequences of BMI performance. Foss and Saebi (2017) identified key
strengths and weaknesses of the four research streams. On the strengths, the
research outputs have enhanced understanding of the nature of innovation,
its process dimensions and results of such innovation. On the weaker side,
the BMI research was criticized for not showing characteristics of well-
defined cumulative research as the research field has been siloed and not
building on each other (Foss & Saebi, 2017). In particular, the definition of
the unit of analysis was found wanting as some researchers looked at BMI as
a process while others looked at BMI as an outcome.
Foss and Saebi (2017) proposed dimensionalization of BMI through a
typology that classifies BMI across novelty and scope dimensions depending
on whether the BMI is new to the firm or to the industry and whether the
innovation was modular or architectural. In this approach, Foss and Saebi
(2017) proposed addressed four research gaps. The first gap is that of
defining and narrowing the dimensions of the BMI construct. The second
gap is that of clearly identifying antecedents and outcomes of BMIs with the
third being that of identifying the contingency and moderating variables of
BMIs. The fourth gap is creating boundary conditions for BMIs into areas
such as entrepreneurship and BMI, open innovation and BMI, servitization,
and BMI as well as sustainability and BMI. The research article was useful
to my doctoral study in how it delineated different dimensions of BMI,
which were necessary for the BM focus of this doctoral research.
Innovativeness of BMs. Spieth and Schneider (2015) built on the
construct of product innovation and examined the dimensions of (a) newness
of the BM, and (b) the specific BM dimensions to be considered in the
newness. The authors argued that a BMI is characterised by a change to its
existing BM configuration either to all or some of its elements (Spieth &
Schneider, 2015). The newness of the BM therefore has to be premised on
changes to the (a) value proposition or value offering, (b) value creation
architecture, and (c) revenue logic or value capture (Spieth & Schneider,
2015). Based on these commonly agreed BM elements, the authors
identified three BMI dimensions as (a) value offering innovation: newness
of value proposition to meet existing but unfulfilled customer demands or
generates new demand, (b) value architecture innovation:
harnessing the firm’ resources and competencies (internal and external) to
generate new value creations, and (c) revenue model innovation: new ways
of generating earnings and managing the BM cost structure for the highest
possible profit (Spieth & Schneider,
2015).
BM and BMI elements and definitions. Three main dimensions of
BMs are (a) value creation, (b) value proposition, and (c) value capture
(Clauss, 2016; Gronum et al., 2016; Morris et al., 2003). Value creation is
defined as the how and what mechanisms business leaders use to create
value within the firm and in partnership with other firms (Clauss, 2016).
Value proposition is defined as the array of solutions the firm offers to the
consumers (Mateu & March-Chorda, 2016; Morris et al., 2003). Value
capture is defined as the mechanisms that business leaders use to convert
value propositions into revenues and how they also manage the cost
structure of the firm to achieve profits (Clauss, 2016). BMI tackles the
innovation aspects of the business instead of the product and processes of
the firm and inherently tackles the three BM dimensions of value
proposition, value creation, and value capture (Brannon & Wiklund, 2016;
Clauss, 2016).
BMI dimensions and innovation sub-constructs. The three BM
dimensions of value creation, value proposition, and value capture have
underlying sub-constructs that are important to consider in undertaking BMI
measurement (Clauss, 2016). From an analysis of various BM and BMI
articles, Clauss (2016) identified ten common subconstructs underlying the
three BM dimensions. The sub-constructs are (1) new capabilities, (2) new
technologies/equipment, (3) new processes/structures, (4) new partnerships,
(5) new offerings, (6) new customer segments/markets, (7) new channels,
(8) new customer relationships, (9) new revenue models, and (10) new cost
structures (Clauss, 2016).
§New capabilities. This relates to the firm acquiring new capabilities that
enable the business leaders to explore, identify, and exploit new business
opportunities.
§New technologies/equipment. The role of technology and equipment in
BMI is in its capacity to innovate around new products, processes and
services as well as offering new revenue models (Clauss, 2016).
§New processes/structures. Innovations in processes enhance cost
efficiencies with resultant improvements to value propositions and value
capture configurations of the
BM.
§New partnerships. Business partners can be customers (in co-creation
processes), suppliers or competitors or other players in the innovation
ecosystem offering relational rents (Clauss, 2016).
§New offerings. When business leaders offer new solutions to meet their
consumers’ needs, the benefits are apparent to the market and these can
obtain from new innovations.
§New customers/markets. The identification of consumers (new and old)
willing to pay for the firm’s value proposition is at the centre of firm
competitiveness driven by products and service innovations.
§New channels. Innovations on how to deliver the value to the consumers
can be point of difference in a BM with bricks and click models offering
cost advantages (Clauss, 2016).
§Customer relationships. This speaks to the business leaders’ ability to
solidify existing relationships and build new ones with customers and the
resultant innovations that can obtain from understanding the latent
market needs and also the opportunities for creating lock-in relationships
such as iTunes and Gillette razor and blades model (Clauss, 2016).
§New revenue models. This innovation sub-construct is about how to
extract value from the customers through increasing the range of revenue
streams and mechanisms for customers to pay for the products and
services offered.
§New cost structures. This innovation is about how to manage the direct
and indirect costs and aligning the product-market strategy to ensure that
innovations in other subconstructs remain within the cost structure that
assures the profitability of the business (Clauss, 2016).
BMI typologies. Taran, Boer and Lindgren (2015) examined ten case
studies of BMI to generate BMI typologies. Taran et al. noted the
importance of BMI as organizations face global competition, which has
shortened product and BMI lifecycles. The authors further noted that key
organizational successes such as those of Apple, Microsoft, Ryanair, Skype
and Zara have come about as a result of BMI. They further explored BM
innovativeness, radicality, reach, and complexity along with the
organisational context within, which the BMI took place and the resultant
enterprise performance.
Taran et al. (2015) conducted 10 retrospective case studies of BMI
conducted by two industrial companies. The authors used a BMI analytical
framework focusing on innovativeness (innovation content, BM building
blocks, innovation depth of the BM and strategic and organizational context
(how innovation supports business strategy, open versus a closed approach
to innovation and measures of BM success). From the
innovativeness/innovation building blocks, Taran et al. established the
constructs of value proposition, target customers, customer relations, value
chain architecture, core competences, partner network and the profit formula
as key attributes of BMI. On the strategic context, the authors identified for
organizational strategic typologies of prospectors, analysers, defenders and
reactors.
The study made useful contributions to my topic in how the authors
applied the retrospective case study approach to isolate the key driving
constructs to BMI success.
The research methodology offered me a viable approach for my study.
BMI and dynamic capabilities. Teece (2018) examined the link
between BMI and a firm’s dynamic capabilities and argued that a firm’s
BMs are dependent on the firm’s capabilities. Teece’s (2018) argument
stemmed from the fact that maintaining competitiveness is predicated on the
ability to design and adjust BMs. Such dynamic capabilities are broken
down into two forms- micro-foundations and higher order capabilities
(Teece, 2018). In the former, business leaders muster the operational and
ordinary capabilities such as routine activities, administration, and basic
governance for day-to-day business operations (Teece, 2018). In the latter, it
includes capabilities in the domain of new product development and “astute
managerial decision making under uncertainty” including new BM design
(Teece, 2018, p.2). It is within the higher order capability domain that
business leaders exercise the sensing, seizing, and transforming
competencies and generate BMIs.
Teece (2018) also provided a useful breakdown of BMI through the
value creation, value delivery, and value capture dimensions (Teece, 2018).
Additionally, Teece (2018) articulated the three main categories of a BM as
(a) value proposition:
product and service, customer needs, and geography of focus; (b) revenue
model: pricing logic, channels, and customer interaction; and (c) cost model:
core assets and capabilities, core activities, and partner networks. One caveat
is that the first mover advantage with an imitable BMI does not necessarily
confer advantages to the incumbent firm. Using the containerized shipping
as an example, Teece (2018) outlined how Uber through waiting for the
standards and technology of the sector to mature and then moving in with
higher order dynamic capabilities allowed its business leader to introduce a
BMI that enables the company to earn higher revenues than the incumbent
taxi industry operators yet without the need to keep expensive assets on its
books but using technology, strategy and BMI coherence (Teece, 2018).
Functions of BMs. Spieth and Schneider (2015) proposed three major
functions of BMs as (a) description of how a firm conducts its business- this
represents the logic of the firm and design architecture depicting how the
business creates, delivers and captures value (transactive structures), (b)
opportunity creation/facilitation, identification and development- how a firm
is organized to pursue opportunities in its environment, and (c)
commercializing ideas and technologies- how the business leaders link
innovation and value creation and convert it to value capture.
BM dimensions and elements. Scholars generated varied BM
elements ranging from four to eight although the most recent BM elements
have tended to narrow down to fewer elements of between three and five
elements (Spieth & Schneider, 2015). Three BM elements are not contested:
(1) value offering or value proposition: the firm’s value proposition, target
customers, and market positioning, (2) value creation architecture:
competences and resources, transactional and organizational structure, value
chain partnerships, and (3) revenue model or value capture: revenue and cost
logics of the firm (Schneckenberg et al., 2016; Spieth & Schneider, 2015).
Reasons for BMIs success or failure. Christensen et al. (2016)
conducted case analysis with Harvard University working with 26 successful
and failed BMIs. Of the failed cases were nine industry-leading companies.
All the cases were profiled, and all 26 companies were invited to share the
experiences generated from the case the case analysis. From the case
analysis, the authors developed the four-box framework of BMI covering
four elements of (a) value proposition, (b) organizational resources, (c)
processes to convert inputs to finished products, and (d) profit formula.
Their conclusion was that successful BMI focus on organizational priorities
and capabilities. Also, BMI follows a pathway of creation, sustaining
innovation, and efficiency with particular requirements for success under
each on the priorities and capabilities parameters (von den Eichen, Alos-
Simo, & Matzler, 2015). The studies contribute to my research topic in how
Christensen et al. and von den Eichen et al. (2015) designed the case study
approach and explored the cases of interest. The BMI framework they
applied provided useful constructs for my case study questions and richly
informed my research design.
BMI pathways. Cao, Navare, and Jin (2017) identified six distinct
pathways of retail BMIs, which are (a) brand legitimization in export
market, (b) resource sharing within a group, (c) knowledge transfer from
head office to subsidiary, (d) alliance with local stakeholders, (e) imitating
local competitors to fit in, and (f) innovating in the new markets. Cao et al.
characterized these BMIs into three patterns based on their organizational
learning capability in terms of exploitation and exploration and how the
business leaders deployed home-based versus host country resources. Pattern
1 is dominated by business leaders’ reliance on their home countries BM
resources such as brand reputation, relationship with international suppliers
and home-based retail distribution and technological options. Pattern 2 is
dominated by business leaders whose BMIs are characterized by exploiting
resources in the export market through strategic alliances with local
stakeholders to customize their operations to the local markets.
Pattern 3 is characterized by business leaders developing new products and
services or BMs through a combination of both host country and
international resources. The authors concluded that BMIs can be understood
as innovative decision processes underpinned by organizational learning,
innovation and internationalization for sustained value creation and
competitive advantage. The study was relevant to my doctoral topic in its
application of the BMI conceptual framework in a multi-case study analysis.
Transition
Section 1 consisted of the focus of the study, the strategies small seed
company business leaders (BLs) and business executives (BEs), collectively
called seed company executives, may use for closing the innovation gaps in
smallholders’ markets for market share growth. The first element of Section
1 provided a background of the business problem followed by discussion of
the problem and purpose statements, nature of study, research questions and
interview questions, conceptual framework, operational definitions,
assumptions, limitations and delimitations, and the significance of the study.
Section 1 also provided a review of the professional and academic literature,
which highlighted the agribusiness seed system innovation gaps and the
BMI models forming the conceptual framework for the study.
In Section 2, I will cover discussions on my role as a researcher,
participants, research method and research design, population and sampling,
ethical research, data collection instruments and techniques, data collection
techniques, data analysis, and replicability and validity. In Section 3, I will
include the study findings, the study’s application to professional practice,
implications for social change, recommendations for action,
recommendations for further research, summary and reflections, and the
conclusion.
Section 2: The Project
Section 1 consisted of my focus in the study: the strategies that
agribusiness BLs and BEs may use for closing the innovation gaps in
smallholders’ markets for market share growth. In the first part of Section 1,
I provided a background of the business problem followed by discussion of
the problem and purpose statements, nature of study, research questions and
interview questions, conceptual framework, operational definitions,
assumptions
Purpose Statement
My purpose in this qualitative multiple case study was to explore
strategies that small agribusiness seed company leaders use to close
innovation gaps in smallholders’ markets. The targeted population consisted
of 10 agribusiness seed company chief executives and operations managers
of nine small agribusiness seed companies and their staff located in
Zimbabwe, Zambia, and Malawi, in southern Africa, whose primary markets
are smallholder farmers. The leaders of these nine seed companies have
demonstrated success in implementing strategies to close the innovation gap.
The implications for social change are that the results of this study may offer
improved seeds and food security for more than 51 million impoverished
smallholder farmers across SSA.
Role of the Researcher
A researcher in a multiple qualitative case study design is the primary
research instrument (Farooq & de Villiers, 2017). As a primary research
instrument, the researcher should seek to ensure that fieldwork is
implemented to collect, organize, and analyze data in an integrated manner
(Cronin, 2014; De Massis & Kotlar, 2014). I took responsibility for the
selection of the case studies, participants recruitment and their orientation on
the research objectives, as well as gathering and analyzing information. I
was therefore responsible for (a) creating an interview protocol, (b)
contacting potential research participants, (c) obtaining information
necessary to answer the research question through open-ended questions, (d)
identifying themes, and (e) analyzing and writing up the study results. I
considered the participants’ perspectives and also the context of the study as
recommended by Cronin (2014) and De Massis and Kotlar (2014). In this
regard, I used multiple data collection methods, including an interview guide
to conduct personal interviews ensuring adherence to interview protocols.
I also made observations and extracted company records and artifacts
to ensure adherence to high ethical standards and procedures to mitigate
personal bias and enhance the overall reliability of my study as
recommended by De Massis and Kotlar (2014). Given that I undertook data
collection through a range of methods such as observation, interviews, and
written materials, I needed to establish a trusting connection with research
participants. The data collection methods require researchers to establish a
connection with their respondents to the extent that the researchers
understand what is going on in the respondents’ minds, their ideas, and
thoughts to sufficiently interpret the respondents’ understanding into
meaningful research findings (Chowdhury, 2015).
My role as a researcher was to explore strategies that small
agribusiness seed company leaders use to close innovation gaps in
smallholders’ markets. It was critical for me to mitigate intentional and
unintentional bias to the extent possible. Fusch and Ness (2015) noted that a
researcher brings their worldview to social research and, therefore, can
intentionally or unintentionally introduce bias through their cultural and
experiential background. The aspect of interviewer bias stems from the fact
that the researcher is the data collection instrument and is immersed in the
data collection process combining the researcher’s perspectives and those of
the study participants (Fusch & Ness, 2015; Roulston & Shelton, 2015). To
guard against personal bias as a researcher, I first needed to ensure that the
views and interpretations of views I generated remained centered on the
participants. Second, I needed to acknowledge my personal bias and remain
vigilant to distance my personal views from those of the participants in the
data collection process. I used an interview protocol and diligently applied it
and also complemented the protocol with member checking and a rigorous
pursuit of data saturation as recommended by De Massis and Kotlar (2014)
and Fusch and Ness (2015).
Utilization of open-ended questions combined with excellent listening
skills, and where necessary guiding the discussions with follow-up questions
while minimizing distractions through note taking enables a researcher to
remain connected to the research participants (Rosenthal, 2016; Yin, 2018).
In this regard, I sought to use the interview questions as a guide to the data
collection process and collected information that is relevant in answering the
research question and collected a reliable chain of evidence.
Sourcing various data from different sources offers an unparalleled
combination of both objective and perceptual data offering both subjective
or interpretive and more factual information. Such an integrative approach
enables researchers to generate a deeper understanding of organizational
processes and outcomes not chosen from other research methods and,
therefore, offers data credibility (Baskarada, 2014; De Massis & Kotlar,
2014). To manage bias and enhance validity, I used confirmation through
data integration to allow me to triangulate data and reduce post hoc
rationalization and personal interpretation biases from interviewees. The
combination of data collection through a semistructured interview guide,
structured data analysis, triangulation of data sources and analysis of data in
an integrative manner enhances construct validity, credibility, and research
reliability (De Massis & Kotlar, 2014). I also used member checking to
assure the validity, credibility, and accuracy of my research findings as
recommended by Fusch and Ness (2015) and Harvey (2015).
Such an approach enabled me to effectively use a triangulation
method allowing adoption of different angles to data collection and analysis
of the same phenomenon from multiple dimensions creating credibility of
the findings. I equipped myself with the appropriate skills in the different
methods of data collection through practice in my work as I applied my
doctoral classes to my work with agribusiness companies in comparable
geographical areas. The triangulation methods are useful only to the extent
that a researcher is sufficiently knowledgeable and able to apply the data
collection methods (De Massis & Kotlar, 2014).
As a seasoned business analyst and agribusiness consultant, I brought
familiarity to the research topic as well as experience with design and
implementation of agribusiness BMI strategies. Besides my 20 years
managerial and technical experience in agribusiness, I have helped business
leaders to set up and grow agribusiness seed companies in eastern, western,
and southern Africa. I brought my own experience in agribusiness BMI
strategy development complemented by an extensive review of the literature
on the topic of agribusiness seed businesses and BMI in smallholders’
market.
The Belmont Report of 1979 established the standards for ethical
principles for the protection of human subjects in research studies with
respect for persons, beneficence; and justice as hallmarks of the research
standards (Wessels & Visagie, 2015; Zucker, 2014). In this research study, I
committed to upholding the highest ethical principles guided by The
Belmont Report.
Participants
My collection of data for this study followed a multiple case study
research design. Multiple case studies enable researchers to compare
phenomenon across cases and determine if it is unique to one case or
replicated across other cases. A multiple case study sample, therefore, within
and across case analysis offers more deeply grounded empirical evidence
(De Massis & Kotlar, 2014). I chose multiple cases for (a) literal replication:
allowing for prediction of similar results, (b) theoretical replication:
contrasting results across cases, and (c) elimination of alternative
explanations (De Massis & Kotlar, 2014). I collected data from small-scale
agribusiness seed company leaders covering ten participants comprising BLs
and BEs until I achieved data saturation. A small or large sample size is not
necessarily a measure of data saturation and therefore I remained open to the
number of participants going up or down depending on when I reached data
saturation. I conducted interviews until I achieved data saturation as guided
by Wakefield and Blodgett (2016). The balance between depth and breadth
always must be maintained, and choice of information-rich cases is a better
consideration than the number of cases to study (Fletcher, Zhao,
Plakoyiannaki, & Buck, 2018). Another caveat is that the number of cases
can be modified during the fieldwork as a function of simultaneous data
collection and analysis and the pursuit of data saturation.
Fusch and Ness (2015) asserted that data saturation is attained when
three conditions are met. First, the research has to generate enough
information such that no new data is being generated. Second, there should
be no new codes and new themes emerging from subsequent data collection
(Tran et al., 2016). Third, the existing data set from the data collection
processes should have generated enough information to replicate the study.
The number of interviews was not going to be the primary determinant of
data saturation in my study as few information-rich interviews could be
enough to attain data saturation.
The cases that I covered in my research study were chosen based on
their capacity for stronger explanation and rare or unique qualities in how
small-scale agribusiness seed company business leaders innovate in the
smallholders’ market. There are not that many seed companies (SCs) that
have been able to penetrate the smallholder seed market with most
smallholder farmers having to rely on using inferior retained seeds (McGuire
& Sperling, 2016). I expected to gain unique access into the operations of
these companies and their BMI strategies to penetrate the smallholders’
market. The firms of focus met the criteria of (a) having been in operation
for more than 5 years, (b) having successfully introduced innovation into the
smallholders’ market, (c) operated in the southern Africa region, and (d)
have fewer than 50 employees.
In addition to the business leaders, I also included business executives
who are management staff (BEs) of the seed companies. Two dimensions of
BLs and BEs informed my sampling from the seed company executives. The
first layer was business leaders that have equity in the firms and are
founding business leaders of the agribusiness seed companies. The second
layer was BLs that are directly and actively involved in the design and
implementation of the BMI strategies in smallholders’ market on behalf of
BLs. These layers of an investigation offered me enough distinct windows of
case observation in a peculiar way than has been researched before in
companies led by BLs and BEs that have been able to demonstrate a track
record of BMI in smallholders’ markets.
I encouraged voluntary participation while also informing the
participants of the potential benefits of the research, and the use of my
extensive network in the agribusiness seed industry, while guaranteeing the
participants confidentiality as recommended by Baskarada (2014) and Yin
(2018). These arrangements offered a good overview of the company
formulation and BMI strategy implementation from the founding BLs and
BEs involved in the strategy formulation and implementation. Mealer and
Jones (2014) proposed researchers to reach out to potential participants
through email requests explaining the research purpose and indications of
time investment requirements on the part of the participants. I sent emails to
potential participants providing background information on the study,
options for interview times and locations, and instructions for giving
informed consent in line with suggestions by Mealer and Jones (2014) and
Yin (2018). In line with ethical standards, I kept the participants identities
confidential and referred to the companies as BL 1, BL 2...BL 3 or BE 1, BE
2 as recommended by Mealer and Jones (2014) and De Massis and Kotlar
(2014).
Although recruitment of participants is essential, equally important is
the continued voluntary engagement of participants in the research (Cronin,
2014). My knowledge of the agribusiness seed industry and knowledge of
the operating context of my participants enabled me to allay any anxieties
participants may have had about the research and enabled the creation of a
relaxed environment for the collection of rich data from participants in a
relaxed collaborative relationship allowing for in-depth discussions.
Maintaining a relaxed environment and collaboration with research
participants is critical in qualitative data collection (Cronin, 2014; Rosenthal,
2016).
Exploring the BMI strategies used by business leaders of small-scale
agribusiness seed companies is only as useful as the quality of the data
provided by the participants. Knowledgeable BLs and BEs were essential to
answering the research question because the quality and completeness of
research findings are predicated on a selection of knowledgeable participants
(Rosenthal, 2016; Yin, 2018). My choice of BLs and BEs as research
participants provided knowledgeable key informants. The choice of business
leaders that are founder members and are still running these agribusiness
seed companies provided business continuity advantages and provided
useful details and insights from the business founders’ perspectives making
these cases unique and strategic sites. BEs that were part of the leadership
team in the formulation and execution of the BMIs were also included as
participants. My reason for the choice of nine cases was, therefore, premised
on deep access to the nine firms with unfettered access to the cases to
investigate the phenomenon of interest. I recruited participants according to
the clearly laid criteria above for business leaders’ eligibility requirements
recruitment and deployed an effective strategy to establish functional
relationships with the participants and ensured strict adherence to the
criteria. I was consistent in the application of the same interview guide for
all research participants and ensuring that all selected participants were
relevant to collect data that is relevant to answering the research question in
line with guidelines provided by Cronin (2014) and De Massis and Kotlar
(2014).
Research Method and Design
The method of the study was qualitative. Unlike quantitative and
mixed methods, using the qualitative method enables a nonlinear exploration
of a study’s central research question (Yin, 2018). Qualitative and contextual
analyses of phenomena require more indepth and focused attention on
strategies driving change. Cross-sectional case study analysis can provide
detailed phenomena analysis in a detailed manner (Yin, 2018). I did not
select the quantitative method as its focus is on examining relationships or
differences among variables by testing hypotheses. In addition, quantitative
methods do not allow researchers to consider the contexts of participants’
feelings, experiences, observations, and relevant documentation (Myers,
2013). I did not select the mixed-method research approach as I am not
testing hypotheses as advocated by Larkin, Begley, and Devane
(2014).
Research Method
The application of qualitative research is mainly to answer the why
question behind people’s motivations in engaging in particular behavior and
when a researcher is interested in better understanding a particular
phenomenon from the participants perspective (De Massis & Kotlar, 2014;
Rosenthal, 2016). Qualitative research is therefore useful for producing rich
and descriptive analysis drawn from interpretation of data that is coded,
sorted, sifted into themes and text into findings known as qualitative data
analysis (QDA). QDA is defined as “a range of processes and procedures
whereby a researcher moves from the data that have been collected into
some form of explanation, understanding, or interpretation of the people and
situations that the researcher investigates” (Chowdhury, 2015, p. 1136).
Data are collected through a range of methods such as observation,
interviews, participation, and written materials. The data collection methods
require researchers to establish a connection with their respondents to the
extent that the researchers understand what is going on in the respondents’
minds, their ideas, and thoughts to sufficiently interpret the respondent’s
understanding into meaningful research findings (Chowdhury, 2015). Data
analysis is, therefore, an inductive process to extract meaning and symbolic
content of the data and understand the reasons that govern human behavior.
Research Design
The research design I selected for my study is a multiple descriptive
case study. There is no universally accepted definition of a case study owing
to different disciplinary perspectives and theoretical traditions (Fletcher et
al., 2018). Fletcher et al. (2018) defined case studies as “meaningful and
complex configurations of events and structures, which are treated as
singular, whole entities purposefully selected” (p. 2). Case selection is,
therefore, considered to be at the heart of case study research and therefore
case study sampling is critical to the credibility of the research results.
Case studies fall into three main categories of explanatory case
studies, exploratory case studies and descriptive case studies. The
explanatory case study is applied when a researcher seeks to understand how
a phenomenon takes place and is typified by a how question such as how is
the product innovation process managed in a small-scale seed company?
This particular case study design is for understanding why a phenomenon
takes place. The exploratory case study is applied when a researcher seeks to
understand particular organizational dynamics or social processes in a theory
building context and applies a question such as “how do individual goals of
organizational members influence the organizational goals” (De Massis &
Kotlar, 2014, p.16). It is possible to combine the why and how aspects of a
case study in which case design could have both the why and how elements
of case study design (De Massis & Kotlar, 2014). The descriptive case study
design is normally applied to convince others that a particular phenomenon
actually exists as it provides a rich evidence base applying such research
questions as “are incumbent firms subject to organizational inertia when
they develop radical innovations” (De Massis & Kotlar, 2014, p.16).
Using a multiple descriptive case study enables flexibility and
adaptability, more so than other designs and enables analysis of a situation
through picture and words as opposed to numbers (Merriam, 2014; Yin,
2018). Applying case study design principles enables researchers to explore
more deeply into the unit of analysis (Yin, 2018). I used the case study
design for flexibility, adaptability, and an in-depth exploration of the case.
Yin (2018) stated that with unique cases, the researcher could derive
comprehensive findings through a thorough study. Therefore, the qualitative
method and multiple case study design were suitable to promote an in-depth
exploration of strategies that small agribusiness seed companies BLs and
BEs in Zimbabwe, Zambia and Malawi in
Southern Africa use to close the innovation gap. Bocken, Schuit, and
Kraijenhagen (2018) applied a multiple case study design to examine eight
cases on how they developed circular BMIs in the green economy.
Case studies are one of the most adopted qualitative research methods
in organizational studies for its relevance and rigor and as a robust research
design in generating managerially relevant information (De Massis &
Kotlar, 2014; Yin, 2018). The value of the case study design is in its ability
to interrogate a topic in its real-life setting in-depth allowing for in-depth
analysis of dynamics of an organizational context through a variety of
perspectives which would otherwise not be possible in quantitative research
designs (De Massis & Kotlar, 2014). Its particular value lies in extracting
“manifold variables embedded in the context of investigation” (p.16) and
application of multiple sources of evidence through convergence and
triangulation of data collection methods (De Massis & Kotlar, 2014). The
case study design can be applied on its own or in combination with statistical
empirical research designs to delve deeper into a given phenomenon.
Three aspects feature in case study research (a) a variety of sources of
data, (b) study of the phenomenon in its context, (c) juxtaposing theory with
reality on the ground (Fletcher et al., 2018). With the growing use of the
case study method has been an equally growing concern about the biased
samples used in research with the research results questioned. Cuervo-
Cazurra, Andersson, Brannen, Nielsen, and Reuber (2016) emphasized the
importance of case selection to generate trustworthy qualitative evidence and
place emphasis on the careful selection of case studies. My case selection
methods were based on strict criteria to conform to the study objectives.
Data triangulation and data saturation. Data triangulation leads to
data saturation (Fusch & Ness, 2015). Triangulation is defined as a method
for data saturation in which a researcher deploys multiple data collection and
analysis methods to the same empirical events (De Massis & Kotlar, 2014;
Fusch & Ness, 2015). Collecting data from multiple sources and integrating
the analysis of those data can be critical data triangulation to enhance the
reliability of the research results and obtaining data saturation (Fusch &
Ness, 2015). Triangulation can take four forms of (a) research triangulation:
where multiple researchers correlate their findings in the same study, (b)
theory triangulation: use of multiple theoretical strategies, (c)
methodological triangulation: comparing data from multiple sources, and (d)
multiple external analysis: cross-checking events through different data
sources and analysis (Fusch & Ness, 2015). For my research study, I applied
the theory, methodological and multiple external analysis approaches to data
triangulation.
Data saturation. Content validity is a function of data saturation, and
failure to attain it weakens the research quality (Fusch & Ness, 2015). Data
saturation is attained when three conditions are met. First, the research
process has to generate enough information such that no new data is being
generated. Second, there should be no emergence of new codes and new
themes. Third, there should be enough information to replicate the study
(Fusch & Ness, 2015). The number of interviews is not the determinant of
data saturation as few information-rich interviews may be enough to attain
data saturation. Therefore, data saturation is a function of the richness and
thickness of data as opposed to the size of the sample. Richness is
considered concerning the quality of information obtained while thickness is
considered concerning the quantity of the information and obtaining both is
the best option (Fusch & Ness, 2018). Fusch and Ness (2015) recommended
the use of a saturation grid that lists the major topics on the vertical axis and
the interviews to be covered on the horizontal axis.
Why other designs were inappropriate. To address the purpose of
this study, I considered case study, phenomenological, and ethnographic
research designs. Using the phenomenological design enables the researcher
to explore aspects surrounding a specific phenomenon and participants’
lived experience (Marshall & Rossman, 2016). The phenomenological
design was unsuitable as my study was not about the meanings of
participants’ lived experiences. The ethnographic research design is
primarily about the exploration of the beliefs and behaviors of culture-
sharing groups (Marshall & Rossman, 2016). I did not want to focus on
characterizing a culture as it pertains to the beliefs and behaviors of people;
therefore, I did not select an ethnographic design for my study.
Population and Sampling
The critical considerations for the sampling of participants for my
research were (a) appropriateness, (b) purpose of the research, and (c) access
to information-rich cases from which to obtain vital information for the
phenomenon of study as guided by Fletcher et al. (2018) and Patton (2015).
Fletcher et al. (2018) identified two core case study sampling approaches of
theory-driven versus phenomenon driven sampling strategies. The theory-
driven sampling strategies draw from a deductive approach where sampling
seeks cases that exhibit previously established relationships with theoretical
concepts or constructs. The purpose of such sampling is to draw cases that
inform the refinement or generation of theoretical models. The case study
units are selected before the project starts and are chosen because viable for
extending and revising relationships with theory (Fletcher et al., 2018). The
phenomenon driven sampling strategies seek to observe real-life phenomena
and apply inductive theorizing logic. Such sampling seeks deep immersion
into the phenomena to identify, document phenomenon to inform knowledge
creation (Fletcher et al., 2018). Three considerations come into play in the
choice of a case study. These are the (a) sampling strategies, (b) unit of
analysis, and (c) sample size (Fletcher et al., 2018).
Case selection strategies. Within the phenomenon driven sampling
strategies, there are several case selection strategy options for my
consideration. Based on international business research experiences in case
study sampling strategies, the top four sampling strategies are (a) criterion:
cases that meet preset criteria, (b) maximum variation: cases with diversity
in terms of predicted outcomes, (c) convenience: easily accessible cases, and
(d) extreme deviant/outlier: to learn from unusual cases or extreme outcomes
cases (Fletcher et al., 2018). In my case, I applied the extreme
deviant/outlier strategy as I sought agribusiness seed company leaders that
have adopted BMI to address the smallholders’ market, unlike the typical
seed company leaders that are struggling to make a foothold in the
smallholders’ market segment.
The cases I chose for my research were meant to reflect a
phenomenon that lacks present theory or empirical evidence. However, it is
worth noting that this does not mean complete absence of theoretical basis,
the base is always some theory, but the distinction is that these cases reflect
aspects not previously identified in relationships between phenomena and
theory (Fletcher et al., 2018). The cases can be selected during the research
process after the project has started.
My choice of a study sampling strategy was the purposeful sampling
strategy informed by selecting information-rich cases that have the best
chances of providing insights into the research question under consideration
as recommended by Fletcher et al. (2018). I applied the phenomenon driven
selection method where firstly, case selection represented the companies that
have designed and implemented BMIs in smallholders’ market and cases
that I chose represented that phenomenon. Second, the cases I chose
captured variations from the norm without predetermined theoretical
assumptions. My focus was to secure cases that are information rich that
show the BMI phenomenon under study. Third, I kept my case selection
dynamic to ensure that I choose cases that illuminate the BMI strategies of
small-scale agribusiness seed company BLs and BEs.
Unit of analysis. The unit of analysis is the focal entity of study
constituting the what or whom the case is studying (Fletcher et al., 2018).
There are four general classifications of units of analysis namely; (a) social
units- individuals, organisations, communities, (b) temporal units- epochs,
events or processes occurring in defined time periods, (c) geographical units-
countries, regions, and (d) artefacts- books, photos, buildings, seed samples
(Fletcher et al., 2018). Analysis of case studies can be at a single unit often
referred to as holistic case study analysis or at multiple units of analysis
often referred to as embedded case analysis (Fletcher et al., 2018). The
former can be done when a case study analyses a single seed company
whereas the embedded case analyses would analyze and present data for the
seed company at multiple levels covering management, supervisors,
customers and so forth while according equal importance to all levels of
analysis (Fletcher et al., 2018). The importance of the unit analysis is to
determine the sampling strategy to be applied as well as the study sample
itself.
A unit of analysis is defined as the case or “a phenomenon of some
sort occurring in a bounded context” (De Massis & Kotlar, 2014, p.17). Case
study analysis can be at the individual, organizational members, a group of
individuals, a process, programme, the firm, a group of firms. A unit of
analysis needs to be clarified in every case. In my case, my unit of analysis
is the innovation strategies of small-scale agribusiness seed company BLs
and BEs. My unit of analysis was, therefore, the leadership and organization
of BM strategy innovation in this group of firms. However, beyond the
business leaders, I was also interested in BEs in seed companies, and
therefore I had multiple units of analysis comprising BLs and BEs in small
agribusiness firms (seed company executives).
Adequacy of sample size. The adequacy of sample size is relative
and always dependent on the purpose of the study and the availability of
resources and the sampling strategy employed (Fletcher et al., 2018). The
balance between depth and breadth always has to be maintained, and choice
of information-rich cases is a better consideration than the number of cases
to study (Fletcher et al., 2018). The other caveat is that the number of cases
can be modified during the fieldwork as a function of simultaneous data
collection and analysis and the pursuit of data saturation.
Data Saturation and Sampling. Saturation is a function of no new
additional information being generated as Morse said, “heard it all”
(Malterud et al., 2015, p.7). Information power is a function of internal
validity “influencing the potential of the available empirical data to provide
access to new knowledge employing analysis and theoretical interpretations”
(Malterud et al., 2015, p.5). Content validity is a function of data saturation,
and failure to attain it weakens the research quality (Fusch & Ness, 2015).
Data saturation is attained when three conditions are met: the research has
generated enough information such that no new data is being generated or
new codes and new themes are emerging, and there is enough information to
replicate the study (Fusch & Ness, 2015). The number of interviews is not
the determinant of data saturation as few information-rich interviews may be
enough to attain data saturation. Therefore, data saturation is a function of
the richness and thickness of data as opposed to the size of the sample.
Richness is considered regarding the quality of information obtained while
thickness is considered regarding the quantity of the information and
obtaining both is the best option (Fusch & Ness, 2018). Fusch and Ness
(2015) recommend the use of a saturation grid that lists the major topics on
the vertical axis and the interviews to be covered on the horizontal axis.
Ethical Research
The Belmont Report published in 1979 (National Commission for the
Protection of Human Subjects in Biomedical and Behavioral Research,
1979) established the standards for ethical principles for the protection of
human subjects in research studies with respect for persons, beneficence;
and justice as hallmarks of the research standards (Zucker, 2014). In my
research, I committed to upholding the highest ethical principles guided by
Koonrungsesomboon, Laothavorn, and Karbwang (2015) in line with The
Belmont Report. I particularly paid attention to the three aspects of The
Belmont Report protocol of (a) autonomy: participants right to participate or
not participate in the research, (b) beneficence: the need for the researcher to
minimise the risks or harm to participants, and (c) justice: in cases where
participants stand to benefit from the research provided by Zucker (2014). In
line with provisions made by Honig, Lampel, Siegel, and Drnevich (2014), I
adhered to The Belmont Report protocols in the IRB applications and follow-
up field work as provided for in the approved research proposal. My IRB
approval number is 10-01-18-0607796 expiring on September 30, 2019
I followed the informed consent process outlined by Anderson and
Cummings
(2016) to (a) explain the purpose of the study and its potential benefits to the
participants, (b) the study procedures and time investment requirements, and
(c) the voluntary nature of the study. To ensure transparency, I shared
information with research participants via email followed up with a call to
explain (a) participants rights, benefits and risks of participating in the study,
(b) compensation arrangements, (c) confidentiality of the participants, and
(d) contact information for further information on the study should they
require it (see Appendix B). In addition to the informed consent form, I also
indicated to the participants the expected time required to participate in the
study and their permission to record the interviews. I sought consent via
email responses before conducting any interviews. The list of documents I
shared with the participants (see Appendix B) includes the informed consent
form, an information data sheet, and an abstract of the purpose of the study,
interview process, and confidentiality procedures as recommended by
Haahr, Norlyk, and Hall (2014) and O’Cathain et al. (2014). I made an
appointment with each willing participant who was over 18 years of age and
assigned a research number to each participant. I at all times encouraged
voluntary participation while also informing the participants of the potential
benefits of the research, and the use of my extensive network in the
agribusiness seed industry, while guaranteeing the participants absolute
confidentiality in line with guidelines from Baskarada (2014), Rao (2016),
and
Yin (2018).
In line with research ethical standards, I also kept the participants
identities confidential to protect the participants and referred to the
participants as BL 1, BL 2, BL 3…BL 5 or BE 1, BE 2…BE 5 as suggested
by Mealer and Jones (2014) and De Massis and Kotlar (2014). An additional
aspect of maintaining participant confidentiality is data storage. I stored the
electronic data on a personal external hard drive and protected it with a
password. I have also stored the data in a locked cabinet for my sole access.
I will store the data from participants for 5 years after which I will destroy
all the data. Data preservation is critical for participants’ privacy and
protection of their rights (Beskow, Check, & Ammarell, 2014; Yin, 2018).
While recruitment of participants is essential, equally important is the
continued voluntary engagement of participants in the research (Cronin,
2014). Participants should be provided with the option to withdraw from the
research should they so wish (Haahr et al., 2014). I informed the participants
that to withdraw from the study, they have the option to inform me via email
or phone at any time before, during, or after the interview, without any
penalty. Should a participant withdraw from the study, I will shred the data
from their company and provide them with written confirmation of the same.
I also did not compensate participants for their participation in the study.
The dangers of financial compensation lie in creation of perverse incentives
among participants to fabricate data during interviews (Robinson, 2014). I
asked the participants to confirm their willingness to participate in the study
by responding “I consent” to my email inviting them to participate in the
study. It is only when I had received that consent that I contacted
participants by telephone to schedule a day and time for the interview.
Data Collection Instruments
Collecting information. I was the primary data collection instrument.
Sutton and Austin (2015) highlighted that the researcher is the primary data
gathering instrument in qualitative research. The researcher seeks to obtain
rich and thick data (De Massis & Kotlar, 2014). I collected data from
business leaders and business executives from smallscale agribusiness seed
companies with experience in BMI in the smallholders’ market. The
participants are collectively referred to as seed company executives. I carried
out
Skype and telephone interviews with business leaders and business
executives of smallscale agribusiness firms. Hershbegger and Kavanaugh
(2017) and Whale (2017) advocated the use of Skype interviews in case
studies where participants are geographically dispersed and where cost
efficiency is a consideration.
Researchers utilizing a case study design can source data from six
sources: (a) interviews, (b) documentation, (c) archival records, (d) physical
artifacts, (e) direct observation, or (f) participant-observation (Smith, 2018;
Hershberger & Kavanaugh,
2017). It is recommended to use at least two sources for data gathering in a
case study (Yin, 2018). I collected data through semistructured Skype
interviews (see Appendix B), company documents, and company/archival
documents.
I gathered and reviewed company documents covering internal
records on BMI strategies. Such documents included company catalogs,
business reports, financial reports, seed production and marketing data, and
media accounts. I asked for contracts and company pamphlets that show the
implementation of BMI strategies in each of these seed companies. I was
given company brochures, pamphlets, and reports. Such information was
useful in informing on the company background and the types of BMI
strategies undertaken, reports and articles posted on websites, as well as
newspaper articles. Yin (2018) advocated the use of archival data to serve as
supporting evidence.
The use of semistructured interviews enables participants to provide
additional details and explanations and allows me as a researcher to probe
further where necessary (Gaikwad, 2017). Interview questions in qualitative
research should (a) focus on one aspect and not be double-barreled, (b) be
neutral and open ended, and (c) be clear and unambiguous such that the
researcher should think about how the interviewee would interpret that
question (Lewis, 2015; Rosenthal, 2016). Such varied data sources offer an
unparalleled combination of both objective and perceptual data offering both
subjective or interpretive and more factual information. Such an integrative
approach will enable me to generate a deeper understanding of
organizational processes and outcomes not picked from other research
methods and therefore offers data credibility (De Massis & Kotlar, 2014).
Such a triangulation method allows adoption of different angles to
data collection and analysis of the same phenomenon from multiple
dimensions enhancing credibility of the findings (De Massis & Kotlar,
2014). I equipped myself with the different methods of data collection
through practice in my work as I applied my doctoral classes to my work
with agribusiness companies in comparable geographical areas. The
triangulation methods are only useful to the extent that a researcher is
sufficiently knowledgeable and able to apply the data collection methods
(De Massis & Kotlar, 2014).
I followed the interview protocol (see Appendix A) and adopted a
systematic manner in asking the questions while probing to obtain elaborate
responses. CastilloMontoya (2016) advocated the use of an interview
protocol to ensure that the interview questions align with the research
questions and for the interview process to be an inquirybased conversation.
In following the interview protocol, I used the opportunity to reiterate the
purpose of the study and to review the contents of the informed consent form
with each participant. Following the interview protocol also afforded me the
opportunity to reassure the participants of the confidentiality arrangements
and answer any questions from participants as they arise. I sought
permission to record the interview and to take some notes for accurate
recording of the discussions. I adopted the five-step approach to the
interview process: (a) introduction, (b) warm-up, (c) main body, (d) cut-off,
and (e) closure as recommended by Alsaawi (2014).
Reliability and validity are key criteria for evaluating the quality of
research
(Noble & Smith, 2015). I sought to obtain data consistency and accuracy as
advocated by Fan, Lai, and Li (2015) and Saunder, Lewis, and Thornhill
(2016). The strategies for enhancing reliability of the study lie in laying out
the steps I followed in conducting the research, analyzing the data, and
clearly presenting the data such that the reader can evaluate the processes
followed in the case study. In this regard, I adhered to (a) the use of a case
study protocol laying out all the key strategies and protocol (see Appendix
A), (b) transparently using data preparation and presentation to make it clear
and easy for the readers to follow, and (c) replication of the case findings by
backing my findings through a database of the case study data collected in
the research study as provided by De Massis and Kotlar (2014) and Drisko
(2016).
I utilized member checking which entails sharing the emerging
analyzed themes with the participants for them to confirm consistency and
accuracy of the analysis as suggested by De Massis and Kotlar (2014) and
Drisko (2016). Such member checking can achieve twin objectives of
allowing key informants to clarify the accuracy of interpretation of the data
and also provide additional perspectives rendering credibility of the
qualitative results (Birt, Scott, Cavers, Campbell, & Walter, 2016; Morse,
2015).
Data Collection Technique
The data collection process for this exploratory case study began with
seeking the Walden University IRB approval, which once obtained marked
the beginning of my field work. The research question for this qualitative
multiple case study was: What strategies do small-scale agribusiness seed
company business leaders use to close the innovation gap in the
smallholders’ market? The principal data collection techniques were
semistructured interviews and company documents. I contacted the
participants explaining to them the purpose of the research and asked them
to complete the informed consent forms to acknowledge their willingness to
participate in the study (see Appendix B).
Once I had received the signed informed consent forms, I scheduled
Skype and phone interviews with the participants on dates, times, and places
mutually agreed with them. My role was to collect data that allowed me to
answer the research question by understanding the data, interpreting it into
themes and writing it up as recommended by Castillo-Montoya (2016) and
De Massis and Kotlar (2014). I followed the interview protocol in all my
semistructured Skype interviews (see Appendix C).
I audio recorded the interviews with a Philips DVT2710 voice
recorder backed up by Audacity application on my computer and took brief
notes to ensure that I captured the vital information. Data capture can be
recorded for later transcription, and ideally one should have a recorder and a
backup recorder as well (Rosenthal, 2016). I utilized two data recording
methods per interview to safeguard against the pitfall of one interview
recording mechanism failing. I closed the interview by thanking the
participant for their valuable contributions as well as invite them to
participate in a member checking interview at a later stage. After the
interviews, I stopped the recorder and went over the interview recording to
check the accuracy of my notes and recording quality.
Baskarasda (2014) and Hyett, Kenny, and Dickson-Swift (2014)
recommended the use of more than one data source as an effective
methodological triangulation in case study research. I conducted
semistructured Skype and telephone interviews to manage the geographical
spread of the participants across a number of countries (see Appendix C).
O’Cathain et al. (2014) recommended the use of telephone interviews for
participants that span across a broad geographical area and for interviewing
participants that are busy and find it challenging to commit too much time
for interviews. In addition to interviews, I also collected relevant company
documents such as operational documents, brochures and website
information where relevant. The key information of interest was the
financial performance, growth strategies and business profitability, an
important aspect in methodological triangulation. Castillo-Montoya (2016)
advocated the use of an interview protocol comprising a set of interview
questions and the process to be followed in guiding the researcher in
conducting the interviews. I was guided by the interview protocol (see
Appendix A).
Interviews. Use of semistructured interviews in case study research
offers advantages to researchers to understand by obtaining targeted
information covering the research question with participants providing
unique insights sharing perceived causal inferences (Gaikwad, 2017).
Interviews also have the advantage of providing relevance to participants
and enabling the collection of in-depth data with clarity (D’Souza,
Singaraju, Halimi, & Mort, 2016). In addition, open-ended questions allow
participants to share their lived experiences (Jamshed, 2014). Interviews can
also have the downside of bias if the questions are poorly designed or asked.
There can also be incomplete recollection by participants or the challenge of
reflexivity where participants provide information that they think the
research wants to hear (Gaikwad, 2017).
There may also be a misrepresentation of information of a historical
nature deliberately or through memory loss of details or memory distortion
(De Massis & Kotlar, 2014). Such bias can take the form of “hindsight bias,
attributional bias and subconscious attempts to maintain self-esteem or
impression management” (De Massis & Kotlar, 2014, p.19). Another
limitation of the interview method is the poor selection of critical informants
or the perceptual agreement problem where key informants in the same
company do not agree on a given phenomenon (De Massis & Kotlar, 2014).
Skype interviews can offer particular challenges such as functionality of
webcams, audio and stability of internet connections (Whale, 2017). Skype
interviews also offer advantages for geographical locations that are far apart
and enables researchers to access participants that would otherwise be
neglected (Whale, 2017). In the modern era, use of Skype for business is
common practice and the challenge of comfort with Skype is overcome
(Whale, 2017).
To maximize on the benefits of the semistructured interviews, I
established good relationships with the BLs and BEs (seed company
executives) from the chosen firms once they had given their informed
consent. Video calls help me to build rapport with participants (Whale,
2017). To ensure transparency, I briefed each of the participants on the
project and provided them with a project summary on the purpose of the
research followed up by a telephone meeting with each of proposed
interviewees. Once I secured participants’ informed consent, I proceeded to
undertake at least one semistructured interview with each participant
involved in the BMI strategy development and implementation. Each
interview lasted on average one hour. These semistructured interviews
followed a set of open-ended questions for each of the elements of the BMI
conceptual framework (see Appendix C). Rowley (2014) recommended the
use of explicit and probative follow-up questions. I asked probing follow-up
questions and recorded all interviews on an audio recorder and backed that
up with my phone in case one of the two recording mechanisms failed.
Protecting the confidentiality of participants is a prerequisite including the
masking of names of participants and their businesses
(Check, Wolf, Dame & Beskow, 2014).
The interview questions in qualitative research should (a) focus on one
aspect and not be double-barreled, (b) be neutral and open-ended, and (c) be
clear and unambiguous such that the researcher should think about how the
interviewee would interpret that question (Rosenthal, 2016). I utilized an
interview guide and literature on small-scale agribusiness seed companies’
participants. Literature is a good starting point for identifying recommended
BMI strategies for small-scale agribusiness seed companies. I shared
information about participants rights, confidentiality, and general
information about the study through email. The list of documents shared
with the participants included the informed consent form, an information
data sheet, and an abstract of the purpose of the study, interview process,
and confidentiality procedures as recommended by Haahr et al. (2014) and
O’Cathain et al. (2014). I made an appointment with each participant and
assigned a research number to each participant as described earlier.
Secondary information. In addition to the interview method, I
requested and obtained access to some company reports and project
documentation, and any other previously published documents on the
companies. Such documents included company catalogs and business
reports, seed production and marketing data, and media accounts. I also
asked for contracts and company pamphlets that show the implementation of
BMI strategies in some of these seed companies. Such information was
useful in informing me on the company background and the types of BMI
strategies undertaken.
Company documents. The value of secondary information is that it is
“stable, unobtrusive and an exact source of data” (De Massis & Kotlar,
2014, p.21). Company documents are also unobtrusive as they are already
available prior to the case study and cover a wide time span (Gaikwad,
2017). However, small companies are notorious for not documenting their
work or poorly keeping their records which may affect retrievability of the
data or business leaders may be tempted to selectively share documents (De
Massis & Kotlar, 2014). Nevertheless, such records represent credible data
that is not retrospective as it is recorded when the events happened and uses
multiple sources such as different scholars, reporters and market and
financial experts making it factual information (Anney, 2014; De Massis &
Kotlar, 2014). Such data provides an unparalleled chronological dimension
that span longer than a research project. Further, such data provides
longitudinal evidence in time and space (De Massis & Kotlar, 2014).
Member checking. To enhance the credibility of a study, I conducted
member checking after I had analysed the data. Member checking is when
the researcher shares the interpretation of the data to participants to afford
them the opportunity to confirm or refute the accuracy of the researcher’s
interpretation and clarify any points that require further details (Anney,
2014; Harvey, 2015). I shared my interpretation of the data with the
emerging themes and afforded participants 48 hours within which to respond
with their acceptance or modification of the analysis. Birt et al. (2016)
asserted that the sign off of the analysis by the participants is crucial for
enhancing the reliability of the research. I emailed a copy of my draft
interpretation of the data organized by the merging themes to each
participant for them to check the accuracy of my preliminary analysis.
Participants were free to confirm the accuracy of my interpretation or
provide any clarifications they deem necessary. Member checking is
essential to enhance the study’s credibility (Harvey, 2015; Morse, 2015). I
received responses with most participants accepting my interpretation. In
one case, the BL participant redacted some of the material originally shared
with me because I was not going to ascribe the innovation to his company by
name.
Data Organization Technique
Managing data. The efficient organization of data is part good
practice in qualitative research (Malsch & Salterio, 2015). To manage the
multiple data sources, I created a case study database to enhance the
reliability of my research to enable me to track and organise the data sources
and notes from interviews, observations, key case study documents, tabular
materials, narratives from key informant interviews, photographs and audio
recordings. Creating such a tracking system makes data analysis easier and
offers a replicable system that other researchers can use for similar studies.
Keeping track of data gave me a line of sight when themes emerge, data
categories, models and analytic memos. Utilizing a similar system, De
Massis and Kotlar (2014) created a chronological ordering of events per case
based on their interview transcripts, field and interview notes, secondary
sources and picked up patterns across the different data sets. I used this
approach to create a chain of evidence in this study to enable external
observers to trace my footsteps from start to finish and enhance the
credibility of the findings.
An important consideration is the secure storage of data and
destroying data after analysis to protect the confidentiality of participants
(Mealer & Jones, 2014). It is also important to observe the requirement to
save electronic data for 5 years and keeping it in a lockable drawer in my
home office. I only used the data for the purposes of the research and plan to
destroy it at the end of the 5 years.
Data Analysis
Data analysis in qualitative research is the relating of data to establish
meaningful patterns as thematic answers to the research questions (De
Massis & Kotlar, 2014). The data analysis steps need to be transparent and
clearly laid out to inform the readers to understand the processes followed
by the researcher (De Massis & Kotlar, 2014). In this regard, I analyzed my
data systemically. De Massis and Kotlar (2014) posited that the data analysis
process is iterative as a researcher analyses the data and seeks the emerging
patterns in response to the research question while gathering data. The
iterative nature of data collection and analysis means that I could modify the
research design while managing the risks associated with data manipulation
as recommended by De Massis and Kotlar (2014).
Triangulation. Triangulation is the application of more than one
methodology to obtaining information and understanding of a given
phenomenon through corroboration in qualitative research (Anney, 2014;
Wilson, 2014). There are four principal types of triangulation: data,
theoretical, investigator, and methodological (Anney, 2014; Cope, 2014).
According to Anney (2014), methodological triangulation involves use of
more than one research method to study a phenomenon therefore enhancing
validity and credibility of findings. Within the methodological triangulation
are the across-method and within-method triangulation techniques (Anney,
2014).
The former utilizes a combination of a qualitative and quantitative
data collection approach. The within-method approach uses two or more
data collection procedures such as interviews and archival data (Tran,
Porcher, Falissard, & Ravaud, 2016). I used “within-method” triangulation
to maintain a qualitative research design focus. I collected data that covered
different time periods narrated from participants’ perspectives by
interviewing several participants and retrieving archival documents for
validation purposes.
Preparation for data analysis. There are four key techniques for
preparing data for analysis as outlined by De Massis and Kotlar (2014).
These are (a) data reduction, (b) data display, (c) data categorization, and (d)
data contextualization (De Massis & Kotlar, 2014; Rowley, 2014). Data
reduction involves making sense of the collected data and condensing it and
categorizing it for simplicity to enable its analysis with a view on what data
is required to answer the research question. Data display involves
compressing the data into presentable formats such as charts, images, and
matrices to make it accessible and to make it easier to see the emerging
themes. This is the stage where coding takes place, and passages of text are
marked for similarities of messages and accompanying explanations are
noted to connect data (De Massis & Kotlar, 2014). Data categorization is
about decomposing the data to identify similarities and differences in the
emerging themes. Data contextualization is about assembling the data to
identify links and connections and contradictions (De Massis & Kotlar,
2014).
Techniques for data analysis. Data analysis can take the form of (a)
explanation building within-case analysis, (b) cross-case analysis, and (c)
pattern matching (De Massis & Kotlar, 2014). I have provided a clear and
proper layout of the data analysis to provide a basis for readers to judge the
credibility of the research in the section below. It was important to avoid the
risk of data analysis and presentation in separate parts based on the data
collection method as if the different data sources are answering different
research questions. The whole point of multiple data sources is not to
analyze and report that data separately but to integrate the data from
different instruments and report it in an integrated manner as well (De
Massis & Kotlar, 2014). Relevant data is considered reliable if at least two
key informants report it from different firms or if it is also confirmed
through secondary data sources such as company reports. I used the NVivo
12 qualitative data analysis software package to enable me to rigorously
analyze a large data set particularly in systematically coding and arranging
large volumes of data into categories.
Transcription. I hired the services of a professional transcription
service provider to convert the audio files from open-ended interviews into
written form and crosschecked the written format against the recordings to
ensure that there was a match and to pick up any transcribing mistakes
before analyzing the data. Rosenthal (2016) recommended that due to the
large volumes of data, it is advisable to hire the services of professional
transcribers to undertake the conversion of recordings into written form
before undertaking data analysis (Rosenthal, 2016).
Key Themes. Data analysis can take the form of thick descriptions by
laying out the research setting, context, and content of the interviewees for
the reader to appreciate the research environment (Rosenthal, 2016). In this
regard, my process for data analysis involved reading the transcripts and re-
reading them to (a) identifying recurring ideas, (b) coding the recurring ideas
from identifying common points and writing notes in the margins of the text,
(c) identifying themes that link various codes into meanings through an
abstraction process as recommended by De Massis and Kotlar (2014) and
Rosenthal (2016). Researchers use thematic analysis to provide an
abstraction of rich details obtained in the data from participants into specific
themes (Vaughn & Turner, 2015; Fugard & Potts, 2015). From this
analytical process, I abstracted six themes. Too many themes are akin to
replaying the interview guide in the research findings (Rosenthal, 2016). I
was not necessarily guided by the number of themes but generated and
refined themes until no new themes emerged as recommended by Fusch and
Ness (2015). I checked the identified themes against the original transcripts
and also shared the analysis with the interviewees as member checking for
confirmation, clarification and or addition of insights. More importantly, I
linked the themes to the conceptual framework and also related them to the
latest BMI and agribusiness seed companies’ literature published after my
fieldwork. I matched the major themes with the shared experiences of the
participants and undertook my data analysis through interpretation before
conducting member checking as part of the interpretation verification
process to build accuracy, credibility, and verification of the data collection
process and data analysis as recommended by Fan et al. (2015).
Reliability and Validity
Reliability and validity are crucial research quality elements often
applied to quantitative research to gauge the trustworthiness of the research
findings (Anney, 2014; Noble & Smith, 2015). Within qualitative research,
alternative criteria of dependability, credibility, confirmability, and
transferability are used to establish the trustworthiness and rigor of
qualitative research (Anney, 2014).
Reliability
Reliability is the extent to which other researchers can come to the
same research conclusions in similar research should they follow the same
steps implemented in one research (De Massis & Kotlar, 2014). It is the
equivalent of generalizability of findings in quantitative studies (Polit,
2014). Webster, Bowron, Matthew-Maich, and Patterson (2016) pointed out
that reliability is assured when a researcher minimizes errors and biases
through dependable and stable data collection and analysis procedures. I
used an interview protocol and use the same data collection process and
analysis procedures (see Appendix C).
Dependability
Dependability relates to the extent to which other researchers can
come to the same research conclusions in similar research should they
follow the same steps I implement in my research (De Massis & Kotlar,
2014; Noble & Smith, 2015). It is a consistency or repeatability check over
the same conditions (Cope, 2014) or “the stability of findings over time”
(Anney, 2014, p.278).
Dependability is about the quality assurance of the research that sets
the trustworthiness of the research (Yazan, 2015). Enhancing the
dependability of my study was achieved through laying out the steps I
followed in conducting the research, analyzing the data and clearly
presenting the data such that the reader can evaluate the processes followed
in the case study. In this regard, I established an audit trail by adhering to the
use of a case study interview protocol (see Appendix A) to ensure the
reliability of data gathering. I hired a professional transcriber to transcribe
each interview verbatim to ensure the accurate capturing of participants
views and experiences as recommended by Cridland, Jones, Caputi, and
Magee (2015). In addition, I kept raw data, interview and observation notes
as well as any documents I collected from the field as suggested by Anney
(2014). I also established a database of the case study data collected in the
research study for backing my findings. I used member checking, which
entailed sharing the emerging analyzed themes with the participants for them
to confirm consistency and accuracy of the analysis as suggested by Harvey
(2015), Hussein (2015), and Noble and Smith (2015). Such member
checking achieved the twin objectives of allowing key informants the
opportunity to clarify the accuracy of interpretations I rendered to the data
and also provided additional perspectives where necessary as suggested by
De Massis and Kotlar (2014) and Drisko (2016). I used established data
preparation and presentation techniques to make it clear and easy for the
readers to follow. Yazan (2015) suggested the use of NVivo software to
enhance dependability as an unbiased mechanism for data manipulation
using Saldana’s (2016) thematic analysis approach.
Validity
Validity is about how the conclusions drawn from the research are
drawn from an accurate description of the research and is a measure of what
the study intended to study (De Massis & Kotlar, 2014; Kihn & Ihantola,
2016). Validity is also about the appropriateness of the tools used, processes
followed in data collection and analysis, and the data itself (Leung, 2015). I
used member checking and triangulation and established an audit trail as
recommended by Noble and Smith (2015) and further explained below.
Credibility
Credibility is about the truthfulness of the information generated from
the research participants and how the researcher collects and interprets that
information through engagement with the participants using different forms
of data collection and maintaining the participants’ original views (Anney,
2014; Gonzalez, Rowson, & Yoxall, 2015; Noble & Smith, 2015). I used
methodological triangulation to collect data through semistructured
interviews with different informants within each company and company
documents to ensure cross examination the integrity of the participants’
responses. I also used the member checking and methodological
triangulation to enhance the credibility of my study. Member checking is
important to ensure that my interpretation of data from multiple sources and
multiple perspectives have convergence and confirmation of results from the
participants (De Massis & Kotlar, 2014; Drisko, 2016). Member checking is
at the heart of credibility as it ensures that ensures the voices of the
participants in the data analysis and removes researcher bias (Anney, 2015;
Caretta, 2016; Morse, 2015).
Member checking also allows for structural corroboration and coherence by
testing for
“internal conflict or inconsistencies as well as referential adequacy” Anney
(2014, p.277). Each participant was afforded a chance to review my draft
interpretations of the data to ensure its accuracy and credibility and were
free to challenge or refute my interpretations and clarify any points I may
have missed as recommended by Day et al. (2018).
Transferability
Transferability is a quality measure that establishes the degree to
which the findings from one study can be transferred to other contexts
similar to the generalizability criteria in quantitative research (Anney, 2014;
Elo et al., 2014). The key strategy for ensuring transferability lies in
providing thick descriptions. In that regard, I provided enough data and on
participants for the reader to assess the adequacy and transferability of the
results. I sought to establish the causal links between the conceptual
framework variables and case study research results. I also sought to
establish a plausible link between the two aspects for the case study results
to stand logical reason in the following manner. First, I demonstrated the
causal link between the conceptual framework and the analyzed data and
demonstrated that there are no spurious concepts that account for the
explanation of the research results as recommended by De Massis and Kotlar
(2014) and Drisko (2016). Second, I utilized pattern matching by comparing
the research results to those patterns predicted in the conceptual framework
or established in previous studies which also serves as confirmability of my
study. Lastly, I used cross-case analysis to compare results from the multiple
cases in line with guidelines from Bloomberg and
Volpe (2015) and De Massis and Kotlar (2014).
Confirmability
Confirmability refers to the degree to which the results of one study
can be confirmed or corroborated by other researchers (Anney, 2014). In
other words, the extent to which the reported results are reflective of the data
and interpretations of the findings and not the opinions of the researcher.
The measures for ensuring confirmability lie in establishing an audit trail,
reflexive journaling and triangulation (Anney, 2014; Kihn & Ihantola, 2015;
Williams, 2015). I enhanced confirmability by asking probing questions
during the semistructured interviews and conducting follow up member
checking interview. I asked probing questions to gauge the authenticity of
the respondents’ responses to the interview questions and obtain clarification
where necessary. Follow up member checking interviews are useful to
confirm the accuracy of the data and researcher interpretations while
allowing the participants to retain their voices in the research (Cope,
2014; Saunder et al., 2016).
Data saturation. Data saturation is a function of the richness and
thickness of data as opposed to the size of the sample (De Massis & Kotlar,
2014; Fusch & Ness, 2018). Saturation is a function of no new additional
information being generated exemplified by the statement “heard it all”
Malterud et al. (2015, p.7). My simultaneous data collection and analysis
pursuit is aimed at obtaining richness and data thickness. Richness is
considered regarding the quality of information obtained while thickness is
considered concerning the quantity of the information and obtaining both is
the best option.
Transition and Summary
In Section 2 of this proposal, I covered information on my role as the
researcher, participants, research method and design, population and
sampling, ethical research, data collection techniques, data management
techniques, data analysis, and research reliability and validity. I also
provided rationalizations for the choice the qualitative explanatory multiple
case study design, purposive sampling, and semistructured open-ended
interview questions. In Section 3, I provided the research findings,
application of research findings
to professional practice, the implication of those findings to social change,
recommendations for action and future research, as well as reflections, and a
conclusion.
Section 3: Application to Professional Practice and Implications for
Change
My purpose in this qualitative multiple case study was to explore
strategies that small-scale agribusiness seed company leaders use to close
innovation gaps in smallholders’ markets. The population for this study was
agribusiness seed company chief executives and operations managers of
small-scale agribusiness seed companies in Zimbabwe, Zambia, and Malawi,
in southern Africa, whose primary markets are smallholder farmers. Market
penetration by agribusiness seed companies in the smallholders’ market
remains at a disappointing 10% to 20% in SSA (Gaffney et al., 2016;
McGuire & Sperling, 2016). This study could have significant contributions
in exploring innovation strategies used by agribusiness seed company
leaders to close the innovation gap in the smallholders’ market. The
overarching research question was: What strategies do small agribusiness
seed company leaders use to close innovation gaps in smallholders’
markets?
I conducted semistructured interviews with five small agribusiness
BLs and five BEs in three countries in nine agribusiness SCs and used
methodological triangulation of my data sources using a combination of
interview data and company documents. Using NVivo 12 for data analysis
and based on the BMI conceptual framework and literature review, six main
themes emerged: (a) company BM, (b) seed production model, (c) product
and market differentiation, (d) value chain partnerships, (e) performance
measurement, and (f) organisation for innovation. The themes are based on
participant views, experiences and responses to the interview questions on
how they close innovation gaps in smallholders’ markets.
Presentation of the Findings
The overarching research question in my study was: What strategies
do small agribusiness seed company leaders use to close innovation gaps in
smallholders’ markets? The specific business problem that I addressed in
this study is that some small agribusiness seed company leaders lack
strategies to close innovation gaps in smallholders’ markets. For the research
method and design, I used a multiple exploratory case study to gain insights
to my research question as described by De Massis and Kotlar (2014). My
data were sourced from 10 interviews with BLs and BEs from nine SCs
spread across three countries in southern Africa and triangulating that data
with company documents. I transcribed the audiorecorded data into written
text before analyzing it in NVivo 12 through open coding, axial coding,
categorization, and thematic analysis. I stopped analyzing the data when no
new information and codes emerged from the data analysis as recommended
by Fusch and Ness (2015). For confidentiality, I identified all participants
with codes as BL 1, BL 2, BL 3…BL 5, or BE 1, BE 2, BE 3 and BE 5. To
mitigate personal bias in the study, I used an interview protocol and member
checking as recommended by De Massis and Kotlar (2014) and Drisko
(2016). I also used methodological triangulation by using interview data
along with company documents as suggested by De Massis and Kotlar.
From the data analysis, six themes emerged on the strategies used by
small agribusiness seed company BLs and BEs to close the innovation gaps
in smallholders’ markets. The six themes were (a) company BM, (b) seed
production model, (c) product and market differentiation, (d) value chain
partnerships, (e) performance measurement, and (f) organisation for
innovation. The themes can benefit small agribusiness BLs and BEs in the
study by focusing their attention on how to improve their strategies in
closing innovation gaps and enhancing their market share growth in the
smallholders’ markets.
According to the BMI theory, business leaders operating in fast-
changing environments require agility to identify and develop innovations to
emerging market opportunities to disrupt markets and build resilience to
external threats (Battistella, De Toni, De Zan, & Pessot, 2017). Maintaining
company value propositions relevance for continued value extraction
requires building of capabilities to avoid capability myopia (Battistela et al.,
2017). A BM is a depiction of how a company “creates, delivers, and
captures value- economic, social, or other” (Battistella et al., 2017, p. 67).
Maintaining business relevance requires BMI or reconfiguration. Such BMI
can be triggered by the need to match industry trends or a response to new
opportunities or fulfilling unmet market needs. The study was carried out in
the context of barriers to BMI by leading incumbent firms due to two main
factors. The first is that the underlying BMs (assets and processes) create a
lock-in effect too expensive to modify from the existing BM to a new one
limiting incumbent company executives to the present BMs (Battistella et
al., 2017). The second is a cognitive barrier where the dominant company
BM is itself a barrier which forces management to develop capability
myopia to develop new innovations as has been the case in large
agribusiness seed companies failing to penetrate the smallholders’ market
(Christensen et al., 2016).
It was in this context that I sought to understand how business leaders
of small agribusiness firms develop and execute strategies to close
innovation gaps as disruptors in the smallholders’ markets. Battistella et al.
(2017) identified core capabilities required by business leaders faced with
fast changing market environments as (a) strategic ability, (b) strategy
innovation capability, (c) resource capitalization capabilities, and (d)
networking capabilities. I will relate my research findings to some of these
capabilities.
Theme 1: Company BM
A company BM reflects how an organisation creates and captures
value, its underlying logic. To achieve sustainability, company executives
require cooperation with different stakeholders beyond the boundaries of the
firm and navigate value transfers with up and downstream actors (Brehmer
et al., 2018). Small seed company executives must navigate these value
boundaries as they mostly rely on upstream and downstream value chain
partners to create and deliver value. From the study, successful BM design
in small-scale agribusiness company executives focused on the design of
their company
BMs to suit their operating environments working with up and downstream
actors.
Brehmer et al. (2018) posited that there are five types of BMs
company executives can adopt. The BMs are make-sell, resell, license,
symmetric multisided, and asymmetric multisided. The make-sell BM is
where the company executives design the value content and manufacture the
products inhouse or outsources the production and then undertake the
selling. The second is the resell BM where the value content is sourced
elsewhere and not produced inhouse and then sold to customers. The third is
the license BM where the company executives license others assigning them
rights to produce or resell the value content. McDonalds is that type of
model. The fourth is the symmetric, multisided BM. It has two dimensions
with one value content production and delivery element for paying
customers generating value for the other customers, who may or may not
necessarily have to pay extra for it. An example is an estate agent platform
that enables real estate owners to advertise and find customers while also
enabling potential property seekers to find suitable properties. The two
customer segments therefore benefit from the estate agent platform. The last
is the asymmetric multisided
BM. An example is a newspaper charging one customer for advertising in a
newspaper. The advertising customer pays for that service while the
customer who buys the newspaper does not have to pay an extra price
beyond what they would have paid for the newspaper just because there is an
extra advertisement in the newspaper.
One key finding from the study was that small-scale seed company
executives embraced BMI and customized their BMs to suit their operating
environments to close the innovation gap in the smallholders’ market. Table
1 shows the types of BMs used by small-scale seed company executives in
the nine cases studied. In my case analysis using Brehmer’s et al. (2018) BM
classification, the cases exhibited four different types of BMs. There was a
difference from Bremmer’s BM typology in the fact that I found more than
one BM type in individual business cases, meaning that a single business
had more than one BM.
Table 1
Number of Seed Company Business Model Patterns by Country
Country Total
cases
Make-Sell Resell License Symmetric
multisided
Asymmetric
multisided
Country A 3 1 2 0 0 0
Country B 3 1 1 0 3 2
Country C 3 1 2 0 0 0
Total 9 3 5 0 3 2
Make-Sell. There was a total of three SC cases that were involved in
producing their own seed and selling it. They had their own farms where
they undertook seed production. The seed company executives all
outsourced seed production to smallholder farmers, and in turn received the
seed for processing to resale to smallholder farmer customers.
Resell. There were five firms that predominantly outsourced all their
seed production to smallholders. The smallholder farmers were carefully
selected to undertake seed production and the seed companies then
processed the seed for packaging and resale under their label. This was the
most common seed production model with all seed companies undertaking
some form of seed production under this BM. One of the key features of the
resell model was that smallholder farmers producing the seed were also
customers of the seed. The seed companies then processed the seed very
close to the sources of production in rural areas and resold the seed into
those market segments with short transport routes for fair seed prices as
noted by Brehmer et al. (2018) in short cycle product lines.
The use of smallholders as seed growers achieved two objectives for
the small seed company executives. First, the smallholders are the seed users
and their participation in seed production has the seed company executives
working with the same seed customers as marketers of the seed. Second, the
technology adoption barrier is immediately overcome as other smallholder
farmers see their peers growing the seed in their locality and technology
diffusion is immediately enhanced in line with Mannan’s et al. (2017) DOI
model. The DOI model has five attributes that enable increased adoption of
products and services by intended users. Mannan et al. (2017) articulated the
five DOI dimensions as (a) relative advantage, (b) compatibility, (c)
complexity, (d) trialability or the opportunity for the target customers to try
the product or service, and (e) observability. Working with smallholders to
produce and use the seed as customers enhances the compatibility, triability,
and observability dimensions for new smallholder seed customers therefore
enhancing technology adoption.
Symmetric Multisided. There were three such company BMs that
were premised on the seed company BM acting as a platform linking
smallholders seed customers with buyers/processors of their final grain.
These models were crop specific with a focus on groundnuts, beans, and
soya beans. The seed company executives, therefore, grew their business
interests by deepening smallholder customer base while linking the
smallholder farmers to buyers of the crops grown by the smallholders. This
BM typology was in line with Brehmer’s et al. (2018) symmetric multisided
BM model.
Asymmetric Multisided. Two seed companies were operating under
asymmetric multi-sided BMs in that they produced seed and processed the
grain produced by the farmers under that model. In return, the business
executives ploughed back the income returns to undertake social investment
activities to uplift smallholder farmers. The key features of these two BMs
were that customers of seed generated revenues and produce (grain) used to
produce finished products by the agribusiness seed companies. For example,
one of the seed companies bought groundnuts from smallholder farmers to
produce peanut butter. The company executives made a profit part of which
they redeployed to deliver social impact services to other disadvantaged
farmers in furtherance of innovation adoption while also growing their BM
profitability as posited by Brehmer et al. (2018).
Legal forms of seed companies. There can be for profit, nonprofit, as
well as hybrid BMs companies. Out of the nine business cases analyzed in
this study, seven were applying the for-profit BM, whereas two were
applying the hybrid BM. For the for-profit companies, the main goal is to
make income gains for the owners of the enterprise from the manufacturing
and selling of the products and services. Profits are distributed to the owners,
employees, and shareholders in such a business. In the nonprofit company,
there are no shareholders and a board runs the organization to deliver
societal influence. All profits are reinvested to amplify the social impact as
posited by Brehmer et al. (2018). In the hybrid company, there is a
combination of for-profit and nonprofit objectives in the same organization.
Participant demographics. The participants in the study comprised
five BLs and five BEs from nine small-scale agribusiness seed companies
located in three countries in southern Africa. Three of the five BLs
participants were female, whereas all Bes were males.
Table 2
Agribusiness Seed Company Study Participants Demographics
Seed company Key informant Title in company Gender
1 BE Marketing & Operations Manager Male
2 BL Managing Director Female
3 BL & BE Managing Director & Operations
Manager
Male
4 BE Operations Manager Male
5 BL Managing Director Female
6 BL Managing Director Female
8 BE Agribusiness Manager Male
9
BL Managing Director Male
BM and societal sustainability. Organizations are looked upon to
come up with innovations that address societal challenges head on with
attendant considerations to financial sustainability (profit), social
sustainability (people), and environmental/ecological sustainability (planet).
Invariably, achieving all these sustainability dimensions requires a focus
beyond products and services to focus on the BM (Brehmer et al., 2018).
Sustainability focused organizations have to focus on value exchanges
between the “focal organisation and its external network of BM actors and
customers” (Brehmer et al. 2018, p. 1515).
Contributions of BMs. First, companies deliver financial
sustainability through employing or supporting underprivileged communities
through value transfers. Second, BMs can create an organizational
imbalance as one part of the organization has to give to the other one which
supports underprivileged groups through donations to underprivileged
people who cannot afford the goods and services or through fair trade
practices by paying fair prices throughout the supply chain. Third, the seed
company executives can also apply the same traditional value logics of
make-sell, resell, license platforms as suggested by Brehmer et al. (2018).
There is a distinct group of for-profit companies that also combine non-
profit dimensions.
The seed company executives I interviewed were triggered to establish
small seed companies that innovated their BMs to address societal
challenges while simultaneously delivering profit and social impact. For
example, the seed company executive in SC 9 stated:
And we realized when we were getting the input that there really
weren’t quality seeds available. But at that point, we already had our
model locked in. And then at harvest, we had a lot of people coming
to us and saying, “Can we get your cowpea to plant? We can't find
good seed anymore.” Eventually, we went to the government and
classified our commodity cowpea as emergency seeds, started to
understand the seed system here better, started to understand the
market opportunity better. In the next year, we came back as a fully
formed legume seed company.
A BL in SC 2 stated the innovation gap in smallholders’ market as a
motivation factor for the formation of their seed company. The BL saw the
innovation gap as a market opportunity to set up their seed company:
The second motivation was the issue of lack of availability of seed
which created an automatic market for the seed for the farmers. Every
now and then the people would complain that they cannot access seed.
That was the second motivation. It was clear there was a market for
seed. And the second thing is that the market was looking for specific
products like soya bean which had high oil content and then when you
go to the market you find all the mixtures and we could not really
trade at a price that the good grade was trading for. So that also gave
me that push to say if you proceed and work on these issues across the
value-chain, then you have an automatic market in the chain which is
the market.
A BL in SC 3 stated their motivation for establishing a seed company.
The trigger was research evidence conducted by the company leadership:
The main thrust that made us focus on smallholder farmers was to do
with the studies that showed there is little access or less access to seed
varieties of choice by smallholder farmers. So initially we thought we
would actually ask bigger seed houses to come in and actually
converse with all the farmers who produce seed, but that proved to be
a challenge. As we scan the country, everything is now made up into
90% smallholder farmers.
A BL in SC 7 used their experience working with smallholder farmers
to close the innovation gap in smallholders’ market. The BL used their
career background and experience working with smallholder farmers as a
trigger for forming a seed company and stated:
I worked in the Ministry of Agriculture as an agriculture extension
officer, especially for women involvement in agricultural
development programs. So, I worked for another 10 years and retired
from there. That's the time I got very much involved with working
with smallholder farmers as an extension worker. So, through that
experience working with them, I got to understand their bottlenecks as
farmers, how they had problems accessing markets for their grain
produce, how the extension service delivery system was so weak on
the ground. We see maybe so many smallholder farmers being ripped
off by a system which brought inefficiencies in effectively reaching
down to the smallholder farmers. And so, I developed an interest on
how can I be part of assisting these smallholder farmers. Maybe to
develop a market for them. To work with part as seed growers and
then the other part as grain growers, so that they can be linked to other
commodity off-takers. I started to do it as a seed grower. I then
registered my company as a seed company.
Similar views were expressed by other BLs being triggered to design
their BMs specifically to close the innovation gap in the smallholder
markets. It was therefore no surprise that all the seed executives focused
their BMs on the smallholders’ market as their primary market of focus.
Theme 2: Organization for Business Innovation
Small-scale agribusiness leaders, who have sustained their businesses
for longer than 5 years, have deliberate organisational systems for closing
innovation gaps in the smallholders’ markets. The BLs also undertake
annual strategic planning involving their staff and value chain partners. The
business leaders also undertake periodic strategy implementation monitoring
and use innovation metrics to monitor their business performance. A BE in
SC I stated it as follows:
We hold a strategy meeting annually with all the branch managers,
and distributors just before the start of the peak agricultural season of
which our peak season, normally starts in September. So, in August,
we do hold strategic meetings with all the key staff like the branch
managers, other stakeholders, where we would put all our thoughts
together. And we've got financial reports. Then we put forecasting for
the next year so that each person can be given a target to achieve
because, the branches, we give them targets and the production team
can be given targets and the marketing team can be given targets.
Then those targets can be agreed by everyone that they can be
achieved, also taking into consideration the gross profit, which we
need to maintain.
A BL in SC 9 also indicated how their operational and strategic
meetings as a team enable the team to remain focused on their strategic
innovations and delivery of profitable outcomes along with social impact.
The BL in SC 9 outlined the meetings as follows:
We do have quite a few meetings and quite a lot of team time
together. So we have Monday morning meetings, which are all-hands on
Monday morning, of course. Those are just kind of check-ins, see priorities
for the week. We have operations meetings, which are managers and
directors on tracking critical numbers, every Friday. So those are our two
weekly meetings and we found that investing more time in having
everybody informed about what's going on across the company is a really
critical step to getting fresh ideas. And then a lot of the actual strategy work
comes from the director level. We have six directors in the company
including the two co-founders - myself and my co-founder. So, among those
six people, we have a number of processes that we've developed over the
years to kind of stimulate innovative thinking and to get people outside the
box. That's also where a lot of operational work is done. So it's strategy and
a lot of operational work like the budget creation and all of that. That's done
at the director level. And every director that's full time is becoming a
shareholder in the company. So we're starting to deploy our stock pool, our
common stock pool. We haven't gotten there yet for legal reasons, but we
have agreements with each of the full-time directors.
A BM is important as it shows “how strategy is concretely
implemented and describes the rationale of how an organisation creates,
delivers, captures value- economic, social, or other” (Battistella et al., 2017,
p.66). In that regard, the BM also shows the customer value proposition,
profit formula, key resources and key processes. Looking at the key drivers
of BM success, it is clear that small agribusiness seed company executives
are maximizing their market conditions of underserved smallholder farmers
in line with established BM literature. The key drivers of BM success are
considered to be market conditions, strategic synergies, competencies and
assets, pricing policies and revenue sharing schemes with smallholder seed
growers, and effective organisational design and governance mechanisms
(Battistella et al.).
BMI is concerned with the maintaining the competitiveness of a
business through innovation or reconfiguration (Battistella et al., 2017). The
drivers for BMI can be due to the need to respond to industry changes or to
take advantage of new opportunities or satisfy customer need or challenges.
In the case of the seed companies, the seed company executives were all
triggered to change their company BMs to respond to the customers’
challenges who found the offer from large seed companies inappropriate to
them. This innovation is in line with Battistella’s et al. assertion that new
innovations come from new firms responding to customers finding existing
solutions too expensive or complicated to access. The question that arises is
why the incumbent established firms did not undertake these innovations
themselves to fend off new entrants.
Planning to Disrupt Seed Industry. Battistella et al. (2017) argued
that there are barriers for incumbent firms undertaking BMI. First, is the fact
that the underlying configuration of assets and processes are in themselves a
hindrance to responding to new opportunities and attempting BMI will
impose high costs and risks to the incumbent firm. For example, large seed
companies are set up to produce seed with large-scale farmers normally
located close to their processing facilities in high rainfall regions. These seed
production models are far from the smallholders’ market and a shift from
this production model to one that responds to the smallholders’ market
segments would require a reconfiguration of these large-scale seed
companies organisational systems and acquisition of new capabilities which
come at a significant cost and risk.
Second, is the cognitive barrier where the dominant logics of a
company BM are themselves a barrier to looking at the market from new
lens different from those imposed by the firm’s dominant logic (Battistella et
al., 2017). In a study of 26 cases of successful and failed company
innovations, Christensen et al. (2016) concluded that as a company BM
succeeds, it becomes more “interdependent and less capable of change”
(p.33) driven by the business ingraining a way of doing business into its
company culture. For instance, at the start of a company BM, the focus is on
value creation where the BLs discover an unmet customer need for which
they develop product and service offers.
Once that is done, in the second phase, seed company executives seek
to sustain the innovation and the performance metrics are centered on
building customers into a reliable base and building the organization with a
focus on the income statement’s topline and maximizing the bottom line
(Christensen et al., 2016). The third phase involves a pursuit of efficiency
where the seed company executives seek to sustain the innovation at least
costs. Organisational systems are therefore created in a manner that takes
away the space for managerial freedom and the focus shifts to shareholders
and the ‘race to the bottom’ in terms of costs and less on the innovation and
the customers. The shift to the value extraction elements means that there is
less focus on the value proposition, and that vacuum opens the door to new
entrants. The incumbent firms therefore create rigidity in their BMs and the
business culture narrative shifts to cost and efficiency to maximize value
extraction at the expense of new innovations (Christensen et al., 2016).
Successful seed company executives in small-scale agribusiness seed
companies also undertake joint planning and maximize on the respective
capabilities of their team members. The BL of SC 2 laid out their planning
mechanisms they deploy:
Within the directors we have different expertise with my sister being
an expert in marketing, and that's her area of expertise. I am more on
seed production and the technical seed and all that and, of course, the
social component which is mobilization of the farmers. I
communicate with the other directors the key strategy behind what
needs to be done. So often, as directors we meet and then we put our
thinking on the table. Once we take that strategy thinking, then we
simply package and then get our technical people to run with
whatever strategy that we've come up with. But really, each and every
director provides input into the strategy we have on the table so that
we implement it accordingly.
Yet another BE in SC 3 stated how they undertake their planning and
pointed out how all staff and board members are involved in the strategy
setting meetings. In addition to staff members, the business leaders also
invite specialist consultants in different areas to provide inputs to the
organization’s strategy formulation. The BE related the nature of planning
they undertake in their company:
What we do is each year, we go for what I would say our yearly
review and strategic planning meeting. So there, we try to reflect on
the strategies that we would have used and how we would have fared
in the previous year, then try to also shape our coming season. Like,
for now, as we're getting into the 2018/19 agricultural season, we
have got our strategy planning meeting in the first week of
November. It's only that we have been overwhelmed by this
Presidential Inputs Scheme that we have been busy with. We are
supposed to have done that workshop like in October. So, there we sit,
reflect, and also, we plan forward. In fact, it's all staff members from
management to the garden boy. All staff members, we have an
opportunity to sit down and strategize. Yes. Then also we invite some
consultants in different areas that we want assistance. It could be
marketing. It could be financial. Then we sit down with the
consultants and then we see how we move on the strategy.
Capabilities. BLs are faced with pressures to innovate or reconfigure
their BMs because of (a) changing customer needs, (b) overcoming inertia in
their organisations, (c) acknowledgement that there are shifts in the industry
that are unavoidable and necessitate change (Battistella et al., 2017). Four
capabilities are required to undertake such BMI interventions.
Successful small-scale seed company executives innovated around
their relationships with a number of value chain partners in a very deliberate
way that moved from transactional relationships to relationship-based
collaboration with inherent cocreation responsibilities. The shift from a
goods dominant business logic to a service dominant logic is a challenge for
most BLs as the latter entails a shift to a value cocreation system between
the service provider and its customers (Sjodin, Parida, & Wincent, 2016).
Important in such a relationship is the need to reduce role ambiguities to
maximize on product-service co-creation. Successful small-scale seed
company executives have been effective in clarifying roles between
themselves and their value chain partners in particular the smallholder
farmer seed growers as well as setting expectations and responsibilities in
the value co-creation process. The two (seed company BEs and smallholder
farmers) parties have entered into what Sjodin et al. (2016) called a co-
implementation arrangement between the supplier and its customers by
changing their relationship from being “transaction- based to a relationship-
based collaboration”
(Sjodin, et al., 2016, p.109).
Strategic Agility. This capability is defined as the “ability to
dynamically revise or reinvent the company and its strategy” Battistella et al.
(2017, p.67). This capability requires business leaders to anticipate and
adjust their BMs to meet changing customers’ needs while remaining true to
their company vision. Business leaders that have built in this capability are
notable through five characteristics of (a) clarity of organisational purpose,
(b) an organisational climate that promotes dialogue, (c) a small unit of
accountability where decision making units are kept small, (d) staying in
touch with the customers through an outside-in approach, and (e) a
collective will amongst the organisational members (Battistella et al.).
Successful seed company executives demonstrated this strategic agility
capability.
Strategy Innovation Capability. This group of capabilities is about
how business leaders maintain adaptive, absorptive, and innovation
capabilities. Business leaders are here required to overcome perception
limitations and continuously read the environment. Battistella et al. (2017)
group these capabilities into two categories. The first category is about three
capabilities. First is how business leaders capitalize on emerging market
opportunities through adaption. Second is how business leaders can tolerate
and encourage risky ideas. Third is reconfiguration where business leaders
are adept at changing their asset structure to respond to the changing
environments.
The second category comprises two capabilities of acuity and seizing
and sensing opportunities (Battistella et al., 2017). In acuity, business
leaders have a good read of the business environment and build competences
to respond to the changes in the market environment. In seizing and sensing
opportunities, business leaders are in a constant search for the next set of
opportunities and the technologies they can deploy to capitalize on the
identified opportunities. Small-scale seed company executives that
successfully closed innovation gaps in smallholder markets also apply
periodic meetings and risk management strategies to maintain acuity and
sense opportunities. Seed company executives in companies SC 1, SC 2, SC
3, SC 5, SC 6, SC 7, and SC 9 indicated how they periodically meet to
review their strategies and to manage risks. The BE of SC 1 outlined their
planning frameworks as follows:
In between, we do regular meetings. For example, there's the
executive meeting, of which I am part. It's comprised of division
managers. We do weekly reports, weekly meetings where we'll be
trying to make sure that our performance trackers are followed as per
plan. Then we do monthly meetings with branch managers, to provide
feedback, and also see whether we are still in line with our strategic
objectives. Then the other meeting which we do bi-monthly is the risk
meeting to see whether the business is having any risk factors. So,
those are the major meetings which can be conducted to ensure that
the business is on track with the things which are organized for.
A BE in SC 4 stated how their planning works. The BE outlined the
different meetings they hold as follows:
We've got fortnightly meetings, where the different departments will
report back on progress through the season, and then we note
problems and then we offer solutions. That's how we proceed and re-
strategize if things are not working.
A BL in SC 7 reflected on how they use field monitoring as a platform
to inform innovation. The BEs use field observations and lessons learnt to
inform the company innovation planning process.
Of course, for each year, it is like when our staff are going out to the
field every quarter, when they are monitoring and so forth, that's the
time to also learn lessons. So we have just bundled so that the trip to
the field is not just for one aspect, whether it is a monitoring or a
production manager. If I note something there in the field, I have to
feed that to the rest of the management team. When everybody goes to
the field, they're also collecting lessons learnt. New lessons learnt. So
during the monthly management meetings and operations meetings,
we bring those lessons there. We have a portion there for sharing
those ideas. We are using research to inform practice, and are actually
doing our own research and feeding into our operations.
Resource Capitalization Capabilities. This group of capabilities
concerns how business leaders acquire, develop, and deploy their resources
to capitalize on market opportunities. Such capabilities involve teamwork
which converts team member knowledge and assets into strategic assets.
Organisational culture is also considered a resource capability where the
company mission, vision and core values are clear and internalized by team
members to create a shared mindset and strategic utility (Battistella et al.,
2017). It is evident that successful BLs and BEs of small-scale agribusiness
seed companies are applying resource capitalization capabilities in their
business innovations as evidenced in their reflections in the sections above.
Theme 3: Seed Production and Service Innovation Model
Small-scale agribusiness leaders that have sustained their companies
beyond 5 years servicing smallholder farmers have specific seed production
and service innovation models. The low-income status context of the
customers targeted by the small-scale agribusiness executives is a key driver
to the innovations introduced in their BMs. Geissdoerfer et al. (2018) posited
that extreme poverty and societal inequality necessitate a “transition to a
more sustainable socio-economic system” (2018, p.165). BMI is an
important mechanism for driving that change to meet sustainability
objectives because technological innovation alone does not go far enough
and yields diminishing returns. While the BM has become an important tool
for systemic analysis and communicating how a business is configured as an
organisational system, it is also as important for how it modifies existing
company architectures to deliver products and service innovations
(Geissdoerfer et al.). Successful seed company executives focusing on the
smallholders’ market respond to such a challenge. The reasons for the
formation of these small-scale seed companies demonstrate the innovation
response to the poverty challenge through a combination of BMI, social
product and service innovations.
Seed Companies Seed Production Outsourcing. Successful seed
company BLs and BEs outsource seed production to smallholder farmers
without signing any legal agreements. Rather they meet with the farmers and
verbally agree the terms and conditions and trust each other based on their
relationship. The seed company BLs and BEs provide the smallholder seed
growers with expensive foundation seed and other inputs like fertilizers and
chemicals on the strength that they will produce seed to the required
standards and sell it back to the seed companies. The smallholder seed
growers also trust the seed companies that they will offer them technical
agronomy support to enable them to grow the best possible seed and
eventually buy the seed from them at preagreed prices. These business
outsourcing arrangements are steeped in social relationships with the key
performance monitoring system resting on the smallholder seed growers’
group self-enforcement mechanisms of self-regulation (Lee et al., 2018). In
addition, the seed companies BLs and BEs go and monitor the progress of
the smallholder farmers seed growers and reinforce the group self-
enforcement mechanisms. Should the seed produced by the smallholder seed
growers not perform well, it is quality tested and traced back to each
individual farmer. The smallholder seed growers’ group has the right to kick
out the concerned farmer/s from their seed growers’ group. Should there be
wholesale underperformance in the quality of the seed produced by the
whole group, the whole group runs the risk of being kicked out of the seed
growing relationship with the seed company with significant negative
income and social status consequences.
Smallholder Customers as Seed Growers. All the seed BLs and BEs
worked with smallholder farmers as their seed outgrowers. Such a supplier
development mechanism is supported by Lee et al. (2018) as a key
competitiveness factor. The importance of outsourcing has given rise to
development of tools for managing buyer supplier relationships to enhance
firm competitiveness. Amongst the advantages offered from outsourcing
arrangements are cost reduction, access to specialized resources, quality
improvements, focus on core competencies (Lee et al.). There are, however,
risks to outsourcing as well. Key risks are “increased transaction costs, loss
of innovation capabilities, opportunistic behaviors by suppliers, and
undesirable outsourcing performance” (Lee et al., 2018, p288). Harnessing
relationships within outsourcing arrangements enhances competencies and
leverages cooperation and resource recombination. All the participant BLs
and BEs work with smallholder farmers as seed growers.
The salient seed production model features reported by the
participants included farmers’ recruitment, capacity building, monitoring
and payment mechanisms. The BE in SC 1 outlined their seed production
model as follows:
To recruit the farmer groups we just put some kind of informal advert
saying we are looking for farmers that can do seed production. Then
the farmers apply and we do due diligence visits to them to see their
land and also assess their past performance. And we assess also the
capacity in terms of past performance so that we can actually see what
these farmers can do.
A BL under SC 3 indicated how the prospective smallholder seed
growers actually find the seed company executives to sell their value
proposition as potential seed growers. The smallholders therefore sell their
value proposition to the seed company as explained by the BL:
In terms of how we identify the farmers, ever since we started, we
really don't make that much effort, they find us. I don't know how but
somewhere somehow, but they do get information. They get the
information. Either they mention to their friends that we are seeking
to grow seed and oftentimes somebody will approach us, and then
once they approach us, we go, and we meet the farmers and then we
do sensitization. We tell them who we are as a company, and what we
do, and how we want to partner with them. So, from the word go, we
are purely a business entity, and when we look at the farmers, we tell
them. So, they find us, and we agree on how to work together. We
look at the regions and identify the right seed for the areas, because
different seed varieties work for different areas.
Supplier Development. It can be defined as activities undertaken by
the supplier to “upgrade and enhance their suppliers’ technology, quality,
delivery, and price competitiveness in the outsourcing relationship” (Lee et
al., 2018, p.290). The outsourcing company therefore undertakes supplier
evaluation, performance expectation uplift, recognition and compensation,
commitment to future benefits, training and education of supplier personnel,
direct investment in a supplier. The benefits of supplier development rest in
delivery compliance and cost savings. There are three dimensions to supplier
management of (a) supplier selection, (b) supplier development, and (c)
strategic supplier alliance (Lee et al.).
Supply chain management is considered a source of competitive
advantage and can take the form of direct or indirect supplier development
dimensions (Golmohammadi et al., 2018). The enhancement of supplier
performance and efficiency leads to product quality improvements, lower
supply chain costs and enhanced profitability for all supply chain members.
Measures that buyers can adopt can include “enforced competition, informal
assessment, and knowledge transfer to enhance supplier performance”
Golmohammadi et al. (2018, p.1). Direct supplier development involves a
buyer’s allocation of capital, human resources, and equipment to its
suppliers. Indirect supplier development activities on the other hand involve
no buyer allocation of resources or limited resources for supplier
development. For instance, BMW and Hyundai deploy their engineers to
their suppliers to improve their productivity as a direct supplier development
intervention (Golmohammadi et al., 2018).
Seed Companies Supplier Selection. Successful seed company BLs
and BEs undertook all three phases of supplier selection as articulated by
Golmohammadi et al. (2018). There was a high level of supplier self-
selection amongst the smallholder seed growers resulting in them reaching
out to the seed companies to be recruited as seed growers. Supplier
development was a common element with varying degrees of supplier
development investment by the different companies. Strategic supplier
alliance was seen in joint marketing and seed technology promotional
activities between the seed companies and the seed growers through field
days and seed fairs to enhance technology amongst many smallholder
farmers.
Long Term Relationship Orientation. One of the glues to the seed
companies BLs and BEs and smallholder farmers seed growers’ relationship
is the long-term orientation where both parties consider not just the present
cooperative relationship but also future relationships as suggested by Lee et
al. (2018). For instance, the smallholder seed growers pride themselves as
innovators in their communities and when new seed technologies are
introduced on the market, they get to try them first. The continued
anticipation by smallholders in seed growing outsourcing relationships is
both a financial uplift as well as a relational dividend for the smallholder
farmers. On the other hand, the seed companies investment in seed growers
pays dividends in both the short term and long term as the seed growers get
more proficient at seed production and can increase their yields from
improved training and resultant performance enhancements. It is therefore in
the seed company BLs and BEs’ interest to maintain the outsourcing
relationship with the same smallholder farmers because when seed growers
exit after a sustained period of supplier development by the seed company,
the training and development costs are sunk and not recoverable (Lee et al.).
Trust is therefore important between the seed companies BLs and BEs and
seed growers to “improve organisational performance, reduce negotiation
costs and monitoring costs, and lead to mutually beneficial agreement” (Lee
et al., 2018, p.291).
Supplier Switching Costs. While these direct supplier development
activities may impose costs to the buyer, the resulting supplier capacity
enhancements can be significant. There can be the risk of different
competing buyers working with the same suppliers whose supplier
development efforts may spillover (Golmohammadi et al., 2018). Seed
company BLs and BEs assess and require their seed growers to have
exclusive arrangements with them and not grow seed for another company at
the same time as they are in contract with one particular seed company to
avoid a free rider problem.
Contracting Systems. It is interesting to note that there are no written
contracts between most seed companies and seed growers. Most of the
smallholder seed growers have basic literacy and numeracy. The outsourcing
relationships exist purely on relational basis. Lee et al. (2018) argued that a
contract can be a source of distrust while relational governance mechanisms
enhance trust and partner self-enforcement to act normatively and interfirm
interdependence (Lee et al.). This practice was reinforced by the seed
company executives that seed growers and seed companies work on trust
relationships steeped in relational governance principles to good effect.
Supplier Attracting Buyer. There are also instances where suppliers
take the initiative to attract buyers to consider them for their supplier
development programmes thereby increasing their attractiveness for buyer
investment in supplier development (Golmohammadi et al., 2018). There
have been reported cases of smallholder seed growers organizing themselves
and approaching seed companies to attract them for contracting as seed
growers. Along with that contracting then comes the supplier development
efforts of seed production training and contracting.
Seed companies’ supplier development. Seed company executives
also undertake smallholder seed grower development as a form of direct
supplier development where the seed company agronomists undertake seed
growers’ assessment, technical training of growers on seed production,
including monitoring of the growers and their performance assessment. The
monitoring takes the form of seed quality assessment at the end of each
production cycle as determined by the volumes of seed produced that meet
the quality specifications required by the seed certifying authorities external
to the seed companies.
In addition to building the capacity of the smallholder seed growers,
successful BLs and BEs of small-scale seed companies also undertake strict
seed growers monitoring. The monitoring visits are to ensure that the
outsourced seed production is in line with prescribed standards to guarantee
quality seed outputs. A BL in SC 3 outlined their seed production supplier
monitoring mechanisms as follows:
We monitor the crop at three levels. First one, during planting or plant
preparation. Then we monitor the crop at the early vegetative stage.
Then, at flowering, we monitor the growth together with the Seed
Services Unit. Then we do the final assessment at reproduction, after
the crop nodule formation in case of legumes. So, we actually do
monitoring of the growers performance. It would be randomly
selected. We can't do every grower. But, now, on their own, they have
got a committee which is very strong, which is called the Seed
Committee who do regular visits to all the growers in their group. So,
in our strategy, we normally recommend the Seed Committee, when
we get there that we need to see the worst farmers and also the best
farmers. Then the other ones, we can randomly pick.
A BL in SC 9 indicated how they invest in seed grower development.
The BL also explained how they also create an incentive mechanism to
induce good performance as follows:
So, we functionally run an outgrower for seed multiplication for up to
about 5,000 farmers. Not incredibly innovative at this line, but we
think it's probably one of the more important things that we do. We
invest more time and money per farmer than anyone else that I know
of working with smallholders. So, each of our farmers is visited every
three weeks at their home or field, receives a training every two
weeks, starting about a month prior to the growing season continuing
through the growing season and continuing a month after. With these,
the full financing package for their input, so that is also customized to
their region and their production history.
So, every one of our growers receives a credit score, basically. We
call it a grower rating, between 0 and 100. This is dependent on six
factors: the quality of crop they bring in, the quantity they bring in,
their side sell rate, so expected yield divided by the actual yield being
sold to us divided by expected yield from yield estimates, attendance
at trainings, adoption of practices, and a subjective rating from a
private extension agent about professionalism. And those six factors
are weighted and the score that they get at the end of the year is what
establishes their credit limit for the subsequent year.
Theme 4: Product and Market Differentiation Innovation Model
Small-scale seed company business leaders that developed sustainable
strategies for closing the innovation gaps in smallholders’ markets designed
suitable product and market differentiation strategies. They turned the
existing seed technologies inventions into seed innovations through
successful commercialization in smallholders’ market.
Importance of Seed Sector. A functional seed sector is critical for
diffusion of seed technologies to farmers for productivity enhancements and
containing food prices for consumers. There has to be solvent demand for
the seed to enhance the growth of the seed companies (Erenstein & Kassie,
2018). Seed systems can be classified as formal or informal with the former
including institutionalized seed producers and seed companies in both public
and private sector. The informal seed sector is premised on informal
exchanges amongst farmers and tends to be very localized.
Innovation versus Invention. Innovation is both the “process and
outcome of creating or inventing something new and valuable that produces
broader effects in the economy and technological advances” (Edwards-
Schachter, 2018, p.66). There is a difference between invention and
innovation with the latter entailing the successful commercialization and
marketing of the invention. An invention is not an innovation until there are
commercial transactions involved. It is important to note that innovations do
not necessarily lead to a tangible product as it can be a new way of doing
business and also that there can be different forms of innovations to
processes or recombination of ideas (Edwards-Schachter, 2018).
All the seed company BLs and BEs who participated in the study, had
ready access to quality seed breeds (inventions) that are made available
through the government research efforts supported by the CGIAR
institutions under open license. A lot of these seed varieties have not been
commercialized and the small-scale seed companies innovated by
commercializing those seed varieties. Given that these seed varieties are
generated from the public research institutions, the seed companies are
hardly accorded intellectual property rights and when these rights are
granted, it is for a limited five-year period. The seed varieties/inventions
therefore remain as open innovations with no excludability features (Poku et
al., 2018). The terms of competition of the seed companies are therefore on
price and marketing efforts as the seed varieties have no excludability
aspects unlike hybrid seeds (Poku et al.).
Table 3
Small-Scale Agribusiness Seed Product Portfolio
Seed SC 1 SC 2 SC 3 SC 4 SC 5 SC 6 SC 7 SC 8 SC 9
OPV maize X X X X X X X X X
Hybrid
Maize
X X X
Groundnuts X X X X X X X X X
Beans X X X X X X X X X
Mung
Beans
X
Soya beans X X X X
Sorghum X X X
Finger
Millet
X X X
Pigeon peas X X X
BLs and BEs in small-scale agribusiness seed companies that have
successfully closed innovation gaps in smallholder markets have a wide
range of customised seed products and marketing strategies to reach the
smallholder customers. The business leaders focus on drought tolerant, early
maturing, and high oil and protein content seed varieties. Business leaders in
all seed companies indicated how their product range is well suited to the
requirements of smallholder farmers. One BL in SC 3 narrated how they
match their products to the smallholders’ microclimatic conditions:
Then what we have also done is to say what crops can be grown and
we have matched the particular crops to the particular areas, even
when we are talking of Mwenezi district. Within that district, we
actually even look in what the particular microclimates to actually
match specific crops to the farmers. Say this was a bit drier, then we
would say this area would only go for sorghum seed. In instances
where we find an area a bit wetter, we go for maize and other crops.
So, there's been proper stratifying of crops according to
microclimates. And then after that, the farmers in the particular areas
are formed into a production committee which actually look after each
other in terms of seed production.
A BL in SC 5 indicated their product range and how the smallholder
farmers have accepted the seed technologies. The BL explained their seed
products value attributes: We have NUA beans. Now, this is another
drought-tolerant, early maturing variety, NUA beans. So NUA beans is
another drought-tolerant, early-maturing, and also very high-yielding. It's a
red kidney bean. On the smaller side, but it's very, very tasty. The farmers
really like it. Actually, they call it, in our local language, munyambatira. It
means finger-licking. You lick your fingers. You lick around your lips or
your fingers. So, we call it munyambatira in our local language.
Differences between BMI and product and service innovations.
There are two main distinctions. First, BMI is a process that is driven at a
strategic organizational level by strategic or top management rather than at a
functional level and “has higher strategic importance than product and
service innovation” (Geissdoerfer et al., 2018, p.169). Second, product and
service innovations are about diversification and how to integrate new
products and services into the portfolio while the BMI is about new ways to
generate value for customers and capture value or extract value from the
market. Third, the risk configurations involved in product and services
innovations are way lower compared to those involving BMI. For instance, a
BMI can lead to wholesale business failure while R&D efforts on a product
or service only entail failure at a localized level (Geissdoerfer et al.). Fourth,
product and service innovations entail retention of the existing customer
base while the BMI dimension can change the customer base completely.
Seed Companies Product Portfolio. All the seed companies had a
diversified seed portfolio with seed being their core business covering
maize, groundnuts, pigeon peas, sorghum, rapoko, finger millet, beans, and
mung beans crops that tend to be neglected by the large MNC seed
companies but in high demand among the smallholder farmers. There is
widespread recognition that private sector seed companies can effectively
undertake seed production and marketing activities provided they have
access to the right regulatory framework, access to improved seed breeds,
and good business operating environments.
Determinants of Seed Adoption. There are elements that determine
seed adoption by farmers: (a) acceptability as measured by the right seed
variety and the quality of the seed, (b) accessibility of the seed: how the seed
is marketed and sold, (c) affordability of the seed: how farmers access the
seed and are facilitated to purchase the seed, and (d) attractiveness: the rate
of return on the purchased seed (Wageningen, 2018). Small-scale have
addressed these features through focusing on high yielding, droughttolerant,
and early maturing seed varieties that also have market appeal in commodity
markets or have attractive use features such as high oil content, high zinc
and protein content, and poundability.
Proximity of seed company and smallholders. The formal seed
system is characterised by a large distance between the seed growers and the
seed users whereas in the informal seed system, there is close proximity
between seed producers and seed users. The small-scale seed companies
have taken features of both seed systems. They have specialized seed
production and yet at the same time are very close to smallholder seed users.
They have achieved this hybrid model by recruiting and training smallholder
farmers as seed users whom they link with their seed specialists. These
smallholder seed growers become the lead innovators that propel seed
adoption by their fellow smallholder farmers who previously did not adopt
improved seeds.
A BL from SC 3 explained the link between their seed production
model and smallholder farmers innovation adoption. The BM is based on
enhancing the smallholders experience growing the seed technology as a
trigger for innovation adoption as follows:
I think the very first and primary thing is to say you are doing the seed
with the smallholder farmers. So, in a way, they’re still obliged to buy
your seed because they are supporting their own company. So already
that gave us an edge. So that’s number one. Number two, the prices of
our seed being OPV. So, it means the production costs are relatively
low compared to hybrid seeds. So certainly now, because our pricing
against hybrids is quite low, so you would find with the income levels
of smallholder farmers around Zimbabwe, they are better off with our
seed than with these hybrids, which at the end of the day, because of
the rainfall pattern and climate change, they’ll still get a ton per
hectare for that.
So, at the end of the day, it wouldn't make sense to buy a 15-ton
potential seed. Very expensive, but you still get 800 kg per hectare. So
that has really given us an edge. In terms of agrodealers, they are
countless. We have got a wide distributorship. I cannot say them
offhand. We have agro-dealers. We do direct distributions to farmers.
A BL in SC 2 stated how they shorten the adoption cycle for
smallholders. The BM is predicated on shortening the smallholders distance
travelled and cost to access seed: What is done is through our model, is we
have now created what we are calling an agrodealers network within the
farming communities. So, when the seed is processed, it's put in these
particular agrodealership so that the farmers within the area can easily access
that seed. But even when they want to access grains, they will be able to
access it within the agro-dealer shops.
Another BE in SC 4 indicated how they enhance smallholder farmers
access to their products. The BM is based on utilising smallholders as seed
stockists to sell the seed to other smallholder farmers:
We've got what we call village-based agents (VBAs). These ones, we
go in a community. We contact the local government agricultural extension
officers to help us to identify good representatives who are farmers in the
locality. And then we contract those farmers to sell seeds on our behalf in
the locality. So, this one, we have done this in a few areas like Filabusi,
Domboshava, Wedza, where farmers demand that seeds come to them. They
don't want to go to local shops or the ones listed in their locality. So, we pick
a representative within that locality who will sell the seed on their behalf. It
cuts on costs. From our strategy we actually thought we should pursue it; it's
a very good model.
One advantage of it is it retains loyal customers once we establish in
localities. When we move in, we do demonstrations, demonstration blocks.
They are able to pick specimens of our varieties. And then they say, ‘This is
what we want to grow.’ So that's how it works.
A BL in SC 5 stated how the seed company staff constantly learn from
the smallholder farmers and integrate that into their value proposition. The
interactions with the smallholders provide the BL with market insights:
And also, my staff in the outreach to farmers go into various places to
talk to people, socialize and get back to me with the feedback. I've
already gotten the other feedback, which I appreciate, from some of
the agro-dealers from last year. They were saying quality protein
maize needs to be given a more local but a more attractive kind of
name. One of the varieties that is well known, from my company is
Kanyani. It grows very, very fast. It runs in its growth like a monkey.
A monkey runs fast. So, they call it Kanyani. Even Kanyani is like a
small monkey, runs faster, implying the fast growth of the seed
variety in the field. So, I need to think of the variety names that can be
catchy.
Facilitating farmers’ access to quality seeds. Producing improved
high-quality seeds is only one aspect of the seed system. The seeds
have to be accessible to the farmers in terms of cost and physical
distance. The small-scale seed company executives distributed their
seed through agrodealers that are based within walking distances of
smallholder farmers, they produced their seed within the communities
therefore reducing the transaction costs of seed redistribution with
their seed only transported within 50kilometer radius instead of over
300 kilometers as is the case for most large-scale seed companies. The
companies also facilitated farmers’ access to finance through banks
and MFIs or commodity outgrower schemes. The companies also
established crop demonstration sites at which farmers are given
promotional seed to grow and other farmers are invited to seed the
performance of the seed. This practice is in line with studies that
demonstrated that the return on seed investment is anything between
20% and 70% depending on the type of seed such as Wageningen
(2018). Affording the farmers, the opportunity to trial the technology
is another trigger for investment or adoption of improved seed
varieties.
Link between seed and commodity value chains. The other
innovation made by the small-scale seed executives is the link between the
seed systems and commodity value chains. Where the seed system ends are
the beginning of the commodity value chain (Wageningen, 2018). In this
regard, the small-scale seed executives have closed the loop between the two
systems (seed and commodity) by setting up sister companies that buy the
produce, setting up processing facilities that add value to the produce from
the farmers, and creating offtake arrangements between the farmers who buy
their seed and the commodity buyers who require their produce. That way
smallholder farmers are assured of a return on investment on their seed
purchases as they have guaranteed markets that warrant their investment in
high value improved seeds sold by the smallscale seed companies.
A BL from SC 3 indicated how they close the seed and grain value
chain loops. The business model is about enhancing the profitability of the
smallholders to enable them to be better seed customers.
I think that's one of the aspects where we have engaged for farmers
with what commodity, with what seed, so they should have the market
for their commodity. That's one of the key things we really want with
farmers, to try to get results because for them, once the value chain is
complete, then they can easily be in that value chain post-harvest. I
think it has been very good because most farmers produce good
products, but their challenge is to say they don't have market linkages
and our initiative offers them a market outlet.
A BL in SC 2 stated the interlinkages between seed technology
adoption and securing markets for smallholder farmers for their produce.
The BM is premised on enhancing smallholder market access for their
produce as a trigger for them to adopt seed technologies:
So, we have a stage where are identifying different groups that
produce and offtake the seed to produce the grain. And when we've
done for this particular year is through our own agro-dealers, we are
telling them to sell. So those who are procuring the seeds, we will
provide the buyback on the grain as well so that we start mobilizing
the grain that we know the quality of-- the quality that we are giving
them. And we know the traits of the products. That is easy for us to
market the products internationally. Because everybody wants to
certification of the product, we are selling to them.
Theme 5: Value Chain Partnership Innovation Model
Small-scale agribusiness seed company business leaders who closed
the innovation gap in smallholders’ markets created effective value chain
partnership innovation models. This type of innovation qualifies into what
Martin (2016) classified as dark innovation. It is defined as those
innovations that go unnoticed because they do not come in the form of the
traditional R&D innovation efforts characteristic of technological
innovations (Martin, 2016). Such innovations are not measurable through the
traditional innovation measurement indicators and remain below the radar
moreso in developing economies especially within the social innovation
space (Edwards-Schachter, 2018).
A BM reflects how an organisation creates and captures value, its
underlying logic. To achieve sustainability, BMs require cooperation with
different actors beyond the boundaries of the firm and navigate value
transfers with up and downstream actors (Brehmer et al., 2018). Small-scale
agribusiness seed executives have to navigate these value boundaries as they
mostly rely on up and downstream value chain partners to create and deliver
value.
A BE in SC 3 indicated how they have a range of value chain
partnerships. The
BE focused on how the value chain partnerships add value to their seed
business: We work with agrodealers, smallholder farmers as seed
growers and farmers as customers, and the Seed Services Unit
which provides us with plant breeding material and also inspects
and certifies our seed. The primary and the most important value
chain actor for us is the Department of Research and Specialist
Services, particularly, the Crop Breeding Institute. The seed guys.
These are the guys who breed the seed that we then use. So, I think
it's one of the major value chain partners that we work with. Then
we also work with other NGOs like CIAT. CIAT is involved in
promotion of biofortified products. And under NGOs, we have
quite a number of them who are interested in small grains and cow
peas whom we sell our seed through for adoption by smallholder
farmers.
Another BL of SC 6 underscored the importance of their value chain
partnerships. The BL worked with several value chain partners.
That is a quite a lot of buzz. Chief being the farmers, then distributors
of seed, and then we deal with the banks. We also get funds, and then
we link farmers as well as the financing. So, it's banks and
microfinance guys, yeah. Then we also deal with, in terms of
distributorship metric, yeah, your Farm and City, your Blue Cross, in
terms of distributorship, so the agent distribution network. We work a
lot with that. Then we also deal with packaging, or maybe what can I
say?
agrochemical suppliers. Then we also work with government
departments. These would be the government backed extension and
the local authorities more on the political side. We also work with the
seed inspection unit.
Firm versus multi-stakeholder collaborative innovations. the early
innovations called the Schumpeter Mark 1 centered on individual heroic
innovators before it was replaced by the Schumpeter II where innovation
was driven by large firms. The third wave of innovation is under the
auspices of creative destruction under innovation ecosystems in which
information exchanges, problem solving, and mutual learning take place
within clusters (Edwards-Schachter, 2018).
It is within this innovation domain where developing and poor
countries are innovating and represent a large opportunity to serve excluded
customers with net social impact. A number of BMs are emerging in that
sphere challenging conventional BMs with new supply chain and BM
configurations (Edwards-Schachter, 2018). Christensen, Raynor, and
McDonald (2015) argued that a novel BM is more important than a novel
technology with a bad BM. The agribusiness seed BMs in southern Africa
demonstrate the value of innovation around BMs by providing improved
seed technologies which are inferior to the ones offered by MNCs which are
unable to penetrate the low-income smallholders market.
Networking Capabilities. This capability is about creating
connections and interdependencies inside and outside the organisational
boundaries through coordination, customer connectivity where trust
relationships thrive, and stakeholders are integrated, and interconnectivity
creates the small word effect (Battistella et al., 2017).
Social Innovation. this innovation dimension is driven by innovation
purpose to solve societal needs by changing social processes through social
technical processes or social inventions. The key distinctions are (a)
innovation led by social activists, (b) collaboration between the social
activists and other market players from both the private and public sectors,
and (c) occasions changes to the production systems. The small-scale seed
companies fit this description particularly those that are from female
activists who established seed companies to solve nutrition challenges faced
by women by developing and marketing improved seeds of nutritious crops
neglected by mainstream MNC seed companies. A workable definition of
social innovation (SI) puts it as the coming up with new idea about “how
people should organise interpersonal activities, or social interactions, to meet
one or more common goals” (Mumford, 2002, p.253).
Lundvall (2016) emphasized the ‘social recipe’ that promotes the
adoption of technological innovations through new institutions a typical
phenomenon among smallscale seed companies that have smallholder
farmer customers as supply chain partners n new social constructs to
enhance their technological adoption while addressing their food, nutrition,
and income security societal needs. Lundvall (2016) called these grassroots
social innovations driven by social demand and premised on social inclusive
open innovation (Gupta, Dey, & Singh, 2017). In the mainstream, SI are
noted in the gig economy BMs of Airbnb or Uber that create marketplaces
that enable multiple transactions while in the seed industry, the small-scale
agribusiness seed companies demonstrate social innovations in BMs to
deliver improved seed technologies.
Typical examples from the study include how agribusiness seed
executives link various research organisations to provide research and
development support as well as their work with smallholder farmers, NGOs,
and government agencies.
A BL in SC 7 indicated how working with value chain partnerships
enabled several small seed companies to establish a collective business
model. The BLs used their collective capabilities to advance their seed
companies.
We are also working with a partnership of women in the field systems
development and transformation, seed taxes and so forth so that it's
known as African Women in Agribusiness. So, this is like an umbrella
body for, at least for now, about 10 women owned seed companies.
We have said we want to transform involvement of women by
reducing inequalities and imbalances in the seed systems industry in
our country. By starting with ourselves, where we want to reduce
those inequalities as pertaining to women because it seems like most
of the imbalances and inequalities pertain to women. And that's where
we have also come up to find out that it's important to consider issues
that may prevent seed companies performing better because they are
leaving women behind in the area that they take everybody like men
and yet, women do not have enough assets or valuable assets that can
make them qualify for large loans.
Owning a seed company is something costly. You need educated
researchers who can do research like scientists. But those are not
cheap to manage in a company. And the whole production processes,
it costs a lot of money. And especially when you're working with
smallholder farmers, it has to have a very strong training component.
And yet, when women are left behind, that has led, in the wider
community, to not meeting seed demands annually. So, we are
looking at it in this way. We are saying there have to be some trade-
off. Sometimes you have to reduce the levels of profit maximization
goals and/or to meet costs of farmers training, costs of research, cost
of employing capable people, and things like that. So what mitigation
measures can be in place to mitigate these trade-offs? Like working
with guarantors.
Theme 6: Measuring Business Innovation Performance
Seed Company Success. A seed enterprise is considered successful
when it has a reliable farm customer base to whom it sells improved seed
varieties of good quality at the right time and affordable prices to those
customers (Wageningen, 2018). The company should also be able to
overcome the cash flow challenges related to managing a seed company
given the long lead times between seed production and seed marketing of
between 3 to 6 months. Such success is measured by the number of years a
company has been in business and providing consistent high-quality seed to
its farmer customers. All the seed companies in the study had operated for at
least 5 years and were in expansion mode indicating that they had successful
established BMs and were increasing their market share in the smallholder
farmers markets.
In terms of seed executives relationship management with their seed
growers, they make efforts to build effective long-lasting relationships with
seed growers. The business leaders measure the effectiveness of their
business innovation from the perspective of the company and that of their
smallholder farmer customers. They are as interested in smallholder farmer
customers profitability as they are in their own company profitability.
One BE in SC 6 indicated how they measure innovation
performance. The company innovation performance was based on the
performance of the farmer. We look at the volume and value that we trade
coming from smallholder farmers. Then we also measure effectiveness.
When we see the smallholder farmers who have become successful
farmers of our seed and depend on benefits, they are deriving from the
seed business, in terms of what they can do with the resources they get,
they are a source of encouragement and success. To us, we feel that that's
a key area.
Another BL in SC 3 outlined the key performance metric in their
smallholder farmers’ innovation adoption model. The company BEs’ focus
was on the farmer customer.
We measure by what the farmers are producing. Because when we
started, on average, each farmer was producing about 600 kg per
hectare, but as we speak now, our farmers have more or less doubled
or tripled that. Because as I said, on average now, our farmers on our
scheme are producing like 1.5 tons per hectare.
Yet another BL in SC 8 shared their company innovation performance
metrics. The focus of the metrics was on different staff roles as follows:
We have goals which form like the yardstick of performance. And at
activity level, we have key performance indicators in place which are
made clear to all employees for their area of authority or their
mandate. And when we are doing performance evaluation and/or
performance appraisals for our employees, those form the yardstick.
And so, we don't just have to do the haphazard, where to say,
"We have succeeded," no. We have a base for measuring that.
Yet another BL in SC 9 indicated how they relate staff performance to
smallholder farmers’ performance. The BL outlined their company
innovation performance metrics:
Whenever we strategize operationally as well, and especially around
internal communication, we do focus on that one figure and the
message that you just outlined. And we try and inform everyone on
the team at every level how their work and the metrics that they're
judged on contribute to the welfare of the company and really what
that means instead of just being an abstract profit figure. So, for
example, if a field supervisor has a metric to get their farmers to 98%
loan repayment and another metric to get them to 67% of commercial
yield ceiling, those are at first glance just impact metrics, but we're
pretty open with our finances internally so that we can have
discussions about how those metrics tie directly into the health of the
company and vice versa. So, one thing that I see a lot with local
enterprises is people are just really, really guarded with information,
especially financial information, even when it's an investor asking for
it. And that's going to kill deals. I'm dealing with one right now, with
a friend who just won't-- they won't even pull together a one-pager
because they're afraid to share something externally to someone that
they don't know. A one-pager that has historical profit figures on it.
And I just consistently push people saying, "You've got to let go.
You've got to grow and have material agreements. And to scale these
things, you have to be willing to talk about your successes and your
failures."
The BM is a vehicle for innovation and an innovation in itself
(EdwardsSchachter, 2018). The BMI has components of value proposition,
and revenue generation mechanisms and the required enterprise cost
structure and profit potential. At the heart of the BMI is the “change of an
existing BM or creation of a new BM that improves its functions and
satisfies customer needs better than the existing BMs” (Edwards-Schachter,
2018, p.71).
Contractual Governance. The contractual governance mechanism is
premised on formal contracts with clear roles and responsibilities of each
party based on transaction cost theory. Therefore, the contract provides for
interfirm transactional relationship through third party enforcement to
minimise either party’s opportunistic behaviour (Lee et al., 2018). In such
contracts, roles and responsibilities of both parties are specified as are
contingencies, liabilities, monitoring processes as well as penalties and
remedies. Use of contracts is based on transaction cost analysis (TCA)
which advocates maximization of transaction performance while minimizing
transaction costs through transactional risk management inherent in
interorganizational relationships (Lee
et al.).
Relational Governance. this model of managing interfirm
relationships is premised on maximizing the “values and agreed upon
procedures which exist in social relationships” (Lee et al., 2018, p.289). The
key features of this governance mechanism are social control dealing with
soft issues such as trust, norms, open communication, and information
sharing embedded in informal norms and self-enforcement.
A BE in SC 1 demonstrated how they build relational governance with
the smallholder farmer customers. The relationship is built on customer
information. Normally we monitor our seed performance through
observations from, for example, programs like the field days. Then, two, in
terms of the number of smallholder farmers customers, on our system, at the
tills, we have got certain information which is captured. For example, we
capture the phone numbers of the farmers. And, also, daily, we will be
summarizing the number of customers at each of our outlets. So, if you take,
for example, in Gokwe, in Rusape, wherever our outlets are, they're located
where the smallholder farmers are. So, we can summarise and say, ‘Today,
we reached, say, 200 farmers in Gokwe. Today, we've reached so many
farmers in this area.’
And also, we're also using a new system called Evolution, the Pastel
system, Evolution. So, we do evaluations, like weekly sales
evaluations. Say, in terms of product ZM521, where was it bought
most. So we can value the sales by seed type by area and type of
customers. Then in certain areas, we know that they need this crop in
such an area through that valuation system.
Applications to Professional Practice
The strategies used by small-scale agribusiness seed company leaders
in this study to close the innovation gaps in smallholders’ markets might be
useful to business leaders and operations managers of any small agribusiness
company seeking to close the innovation gap in smallholders’ markets. The
objective of the study was to explore the strategies small-scale agribusiness
leaders used for closing the innovation gap in smallholders’ market. First,
the findings of this study are of potential value to business leaders seeking to
penetrate the large bottom of the pyramid (BOP) markets that are unserved
and underserved market segments for several businesses. Second, this study
may also equip business leaders and managers with a better understanding of
business processes, capabilities, social innovations required to navigate the
myriad of innovation challenges in rural smallholder farmers’ market.
Research such as the one covered under the study can also provide pointed
guidelines as to why some innovation strategies are not viable for closing
innovation gaps in smallholder markets. Such insights can save business
leaders and operations managers financial losses in replete in poorly
conceived innovation strategies.
The importance of collaboration, planning and coordination in
achieving business objectives is central to successful co-creation,
deployment and evaluation of innovation strategies (Persichitte, 2016). One
mechanism recommended by Lindgren and Munch (2016) is the creation of
a technical committee to drive the innovation process. Lindgren and Munch
suggested that there should also be user involvement to enhance the success
of technology adoption. While Silban (2016) recommended the use of
technology committees, small-scale agribusiness companies do not have that
many staff. Instead, the executive committees in the companies come
together to deliberate on the innovations to deploy and how to deploy them
as well as how to evaluate the performance of the innovations on the
smallholder farmers. For example, most of the seed company executives
held weekly meetings to discuss their innovation strategies. Two innovative
strategy insights used by business leaders of small-scale agribusiness seed
companies emerged from the study. First, the business leaders and
operations managers created innovation committees that were not only based
in their companies but roped in customers and other value chain partners.
This approach enhanced the capabilities available to the business leaders of
small-scale seed companies. Second, the business leaders also engaged in
user involvement in technology adoption through the deployment of
smallholder farmer seed customers as seed growers, effectively integrating
them into their supply chains.
The results of this study may provide value to the practice of business
because some small agribusiness seed company leaders are failing to close
the innovation gap in smallholders’ markets (McGuire & Sperling, 2016).
Provision of improved empirical evidence on how small agribusiness seed
company leaders can close the innovation gap and gain competitiveness in
smallholder markets may better inform how investors, donors, and public
entities can direct such investments in more productive ways. The findings
from this study may contribute to knowledge on the potential strategies for
changing increasing business competitiveness among small agribusiness
seed companies in southern Africa through strategies for accelerating
product and process innovations.
Implications for Social Change
The implications for positive social change include the potential to
enable small agribusiness seed company leaders to develop and adopt better
BMIs. Agriculture is the backbone of African economies (Kansiime &
Mastenbroek, 2016). Africa is home to
12% of the global population and will be home to 31% of the global
population by 2050
(UN, 2016). Smallholder farmers make up 70% of Africa’s population and
contribute 80% of the food consumed in Africa (AGRA, 2016). The
improvement of agribusiness seed companies’ BMs could catalyze
developing a dormant industry on which many people in Africa derive their
livelihoods. Improving the BMIs of agribusiness seed companies may lead
to food and nutrition security for African families currently living in
poverty.
The innovation strategies identified in this research have been
successfully implemented by small-scale agribusiness leaders and operations
managers in southern Africa. The results of the study have potential
contributions to social change by providing fresh insights into additional
strategies for closing the innovation gap in smallholders market by
agribusiness seed company for the vast under and unserved markets in SSA.
The sharing and dissemination of such strategies may enable agribusiness
seed company leaders to gain new strategic tools to deploy in closing
innovation gaps in smallholders’ market. Navigating resource constrained
smallholder farmers markets is a costly endeavor and outlining systematic
strategies used by successful business leaders has the potential to provide
and guide other managers aspiring to serve similar markets and help them to
reduce the cost of doing business in smallholder markets and avoid
technology innovation failure. These strategies can assist other small-scale
agribusiness seed company leaders that would like to pursue business
opportunities in the elusive smallholders’ market with resultant employment
impact.
Smallholder farmers technology adoption has triple benefits. First, it
increases the market share and profitability of small-scale companies.
Second, the growth of smallscale seed companies has the potential to create
more jobs for unemployed business and agricultural graduates as these
companies expand. The effects of the two growth scenarios above is that
they can potentially increase the tax base that can enable government to
finance public infrastructure such as schools, roads and clinics. Third, as
smallholders adopt technologies, they enhance their farm productivity and
generate more incomes for their household needs. Such income increases
have the potential to lift them from poverty and allow them to invest in their
children’s education and solar energy. With more disposable incomes, the
smallholders can also adopt further technologies beyond seeds such as solar
energy for the general well-being of their communities.
Recommendations for Action
In line with the conceptual framework of BMI, the findings of the
innovation strategies employed by small-scale agribusiness seed company
business leaders in this study and the following recommendations may apply
to many business leaders and operations managers operating in the BOP
markets. The first recommendation is for business leaders to plan for
innovation strategies rooted in local market conditions. The study findings
point to the use of structured techniques in developing business models,
innovation techniques around products, social systems, and supply chain
management techniques working with smallholder farmers. The evidence
from the study suggests that business leaders and operations managers
should be deliberate about the processes and methodologies that they follow
in strategizing innovations in smallholder markets. ToroJarrin, Ponce-
Jaramillo, and Guemes-Castorena (2016) recommended the proper
identification, and sequencing of innovation solutions by business leaser
through well thought out processes and methodologies.
A second recommendation is for business leaders to adopt BMI
techniques of designing suitable value propositions and creating value while
simultaneously considering value extraction mechanisms. Small-scale
agribusiness seed company leaders in the study undertook careful
identification of smallholder farmers user requirements, prioritization, and
effective management of new innovations. Such proper identification of
smallholders’ requirements, prioritization of the technology options enabled
business leaders and operations managers to deploy and integrate new
innovations into their company product and service portfolios to close the
smallholder farmers innovation adoption gaps. For example, working with
smallholders as seed growers enabled business leaders to fully appreciate the
user requirements of smallholders and effective deployment of new
innovations in smallholders’ market.
Business leaders serving the BOP may use the results of this study to
develop innovative business models that deliver customised value
propositions to smallholder customers while extracting remunerative
financial returns. It is my recommendation that business leaders take the
time to understand the dynamics of the smallholders and devise BMI that are
sustainable and specific to the market realities in the BOP which should
deliver both economic and social impact.
A third recommendation is for business leaders of small-scale
agribusiness seed companies should harness the value of innovation
ecosystems. Small-scale agribusiness leaders do not always have all the
resources they require to undertake huge research and development outlays.
In that regard, they should seek to work with value chain partners and other
players in the public, academia, and civil society space to leverage networks,
capabilities, and financial resources. Successful small-scale agribusiness
leaders worked in innovation ecosystems and leveraged resources and
capabilities from their innovation ecosystem to good effect. Such leverage is
akin to what Edwards-Schachter (2018) called dark innovation, which is
innovation bound in social systems.
Lee et al. (2018) posited that cultures that are steeped in high social
networks require more relational than contractual supply chain relationship
mechanisms. The study finding that small-scale agribusiness leaders worked
with several smallholder farmer seed growers with no legal contracts, but
social contracts is quite telling. The business leaders transferred the
responsibility to the smallholder seed growers to self-regulate and if they
failed to meet the minimum requirements, they would stand to lose their
privilege as seed growers, an attractive role in the community as an
innovation leader. It is my recommendation that small-scale agribusiness
leaders should understand the social contexts of the markets they operate in
and customize their value propositions and supply chain relationships.
The study is of potential benefit to business leaders and operations
managers as they may use its results to be more focused on the processes
and systems that are workable in the smallholders’ market. The study results
might be usefully shared via peer reviewed electronic media, literature
conferences, scholarly research, professional and business journals.
Agencies promoting small-scale agribusiness seed companies may find the
results of this study beneficial for enhancing their programme support
activities and developing customised training manuals on closing innovation
gaps in smallholders’ market.
Recommendations for Further Research
While this study has generated some insights into what strategies
small-scale agribusiness seed company leaders and operations managers use
to close the innovation gap in smallholders’ market, more empirical research
on innovation adoption by the smallholders is required. One of the
limitations of this study is that it only covered smallscale agribusiness
leaders and operations managers in countries of southern Africa. While such
a study is innovative as a first in the agribusiness space focusing on business
models, there are geographical differences in East and West Africa that
warrant further studies of the innovation strategies used by small-scale
agribusiness seed company BLs and BEs in those geographies.
Reflections
The objective of this study was to explore the strategies small-scale
agribusiness leaders and operations managers used for closing the innovation
gap in smallholders’ market. The doctoral journey in pursuit of answers to
this question was a demanding yet fulfilling one which I took with zeal and
stamina. The quest to establish what strategies business leaders used became
my pre-occupation over the last 3 years as I set to read around the
agribusiness seed industry, BMI, and innovation ecosystems. I found the
literature review very beneficial to my learning as well as application of new
concepts in my business consulting on business models. I continued with
literature review beyond the requirements of the doctoral proposal because
of the symbiotic relationship between the study topic and my consulting
company’s assignments. I am grateful for having the opportunity to study for
a doctorate as I am the first on both sides of the family to undertake a
doctoral study. I was determined to complete it and demonstrate to the others
that it is possible, and they can also emulate me. The study participants I
interacted with were a source of inspiration as they encouraged me and also
challenged me to complete the doctorate and be useful to their business
growth aspirations. I have a social contract with those business leaders to
complete my doctoral studies and contribute to innovative solutions to
closing the innovation gap in smallholders’ market.
Conclusion
Small-scale agribusiness seed companies are an important source of
innovation for smallholders in the SSA region (Poku et al., 2018). Business
leaders and operations managers can develop and deploy innovation
strategies that successfully close innovation gaps in smallholders’ market.
Business models need to be customised to suit the specific smallholders’
circumstances. Smallholder farmers need to be integrated into small-scale
agribusiness seed company supply chains and small-scale agribusiness
leaders need to enroll other players through innovation ecosystem principles
to leverage resources and capabilities.
