Value-Creating Strategies in Dairy Farm Entrepreneurship: A Case Study in Northern Spain

Abstract

This paper explores different value-creating strategies (VCS) used by dairy farmers engaged in on-farm diversification ventures. In order to explicitly identify the informal strategies followed by 49 farmers in their value-added ventures, we applied a theoretically informed business model framework combining three dimensions: value proposition linked to local food, customer engagement via quality schemes and shorter supply chains, and the key capabilities of the entrepreneur. Using cluster analysis, four different types of VCS were identified and labelled as ‘Ecological’, ‘Single-product’, ‘Innovative’, and ‘Traditional’. Whilst we found that these strategies are influenced by contextual factors and the owner’s entrepreneurial skills, in general, we did not observe significant differences in performance between them. The results suggest that farmers respond entrepreneurially to sectorial changes adopting those VCS that tend to align with their entrepreneurial capabilities and context, thus enabling them to succeed with any of the strategies pursued. Hence, our work contributes towards clarifying the relationship between VCS, entrepreneurial capabilities, and context. This is important for farmers and policymakers because it reveals the diversity of farm management and the resilience of farm systems. As a result, the potential challenges for Single-product VCS and Traditional VCS are discussed.