When modern distribution owns the piggy bowl

Abstract

Founded in 1971, Raporal was a venture of 18 pig farmers whose aim was to produce good quality animal food. The success of this venture allowed Raporal to expand down the entire chain of pork and beef production. The focus on a vertical production structure has also contributed to Raporal’s ability to respond effectively to the industry challenges and become one of the top players in the sector in Portugal. Despite its success, the changes in the macro-economic environment that accounted for the leading position of supermarkets in the grocery market and the growth of their private labels, presented a threat to Raporal, which experienced a significant decrease in sales, in 2006. In face of these events, its management looked for ways to establish binding agreements with important distributors in order to guarantee their space in the market. This partnership resulted in a sudden strategic change for Raporal which initiated its path in the production of a differentiated product. This case illustrates the importance of the producer and distributor relations, and includes themes such as differentiation, vertical integration and the strong growth of private labels, topics which are addressed in the literature review with the aid of some relevant models. The analysis in the teaching note section focuses mainly on the development of potential solutions to Raporal’s current problems. Amongst which is the strong bargaining power of buyers and the effectiveness of differentiation as a means to mitigate such tendency.

Date of Award	14 Jul 2014
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Nuno Magalhães Guedes (Supervisor)