Preprint Article Version 1 This version is not peer-reviewed

Organic Private Labels as a Tool to Achieve Competitive Advantage - The Case of International Retailers Operating in the Polish Market

Version 1 : Received: 30 April 2018 / Approved: 2 May 2018 / Online: 2 May 2018 (13:09:27 CEST)

How to cite: Górska-Warsewicz, H.; Żakowska-Biemans, S.; Czeczotko, M.; Świątkowska, M.; Stangierska, D.; Świstak, E.; Bobola, A.; Szlachciuk, J.; Krajewski, K. Organic Private Labels as a Tool to Achieve Competitive Advantage - The Case of International Retailers Operating in the Polish Market. Preprints 2018, 2018050043 (doi: 10.20944/preprints201805.0043.v1). Górska-Warsewicz, H.; Żakowska-Biemans, S.; Czeczotko, M.; Świątkowska, M.; Stangierska, D.; Świstak, E.; Bobola, A.; Szlachciuk, J.; Krajewski, K. Organic Private Labels as a Tool to Achieve Competitive Advantage - The Case of International Retailers Operating in the Polish Market. Preprints 2018, 2018050043 (doi: 10.20944/preprints201805.0043.v1).

Abstract

The main aim of the study was to analyze/determine how international modern retailers’ chains can achieve a competitive advantage by introducing private labels (PLs) in the organic category and in turn stimulate consumption of food produced with respect of sustainability principles. Following a review of the relevant literature data collection process involved two steps. First, to select retailers with organic private labels (OPLs) and producers delivering products under OPLs, there were conducted in-depth semi-structured interviews with the representatives of the management board of 17 enterprises. A group of 6 enterprises was selected, including 3 retailers having OPLs, 2 producers delivering products under OPLs and one enterprise that was categorized as producer and distributor. Based on the results of the interviews, six sources of the competitive advantage of the OPLs were identified and further discussed. Second, to analyze more in depth assortment-based competitive advantage of the OPLs, 8 enterprises (5 retailers having OPLs, 2 producers delivering products under OPLs and one enterprise categorized as a producer and distributor) were approached for the interviews. To explore price-related competitive advantage three products offered under the premium PLs, the economy PLs, the organic PLs, the producer brands and the imported brands were selected for the subsequent analysis. Increasing competition in the food retailing sector pose many challenges on the retailers and stimulate them to develop the PLs that is in line with global trends. In case of the OPLs, the more popular strategy while introducing them is to differentiate the PLs with quality and image related attributes comparable to leading producer brands. Retail chains introducing the OPLs achieve the competitive advantage related to six sources: price, range of assortment, type of PLs, image of retailer, sustainability and specific process and product related attributes of organic food. Additionally the retailers use their reputation and image of retailers’ brand to guarantee the quality of new organic products introduced under the PLs. To achieve or maintain the competitive advantage, retailers tend to introduce the OPLs positioned as value added PLs. They perceive the OPLs as a way to influence the consumers' decision to buy and increase their loyalty towards store brands. The strategies of the retailers evolve and the largest retailers decided to create the premium OPLs, the others focus on introduction of the international OPLs or aim at development of new PLs based on the analysis of consumers' preferences. There are several factors behind the decision to introduce or extend the premium OPLs i.e. to expand the assortment of organic products and green products line, to increase category margins and to enhance retailer’s image among customers. Other large retailers create the OPLs with special product line design focusing on health- and environmental related attributes and high quality guaranteed by the organic regulations and the certification. The process of the introducing the premium PLs should be influenced by the inherent characteristic of organic food and its production methods that respect the principles of the sustainable development.

Subject Areas

organic private labels, competitive advantage, retailing

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