*4.2. Cases Competing Based on a Single Quadrant*

Our analysis indicates that some firms occupy and compete based on a single quadrant of the typology. This is more readily observable for Future Emergent and Niche. Future Emergent production, as characterized from practice anecdotally and our single Future Emergent case (see Figure 4), is conducted by start-up organizations, some of which claim to be on the verge of commercialization. The phenomenon of competing within a single quadrant is also observed in Niche production when firms prioritize some form or combination of domestic conventions as a basis of competition. Seven of our 23 cases occupy a single quadrant.

Case D, for example is a producer that operates all levels of the supply chain, encompassing production through retail. Cultivation and animal husbandry techniques are more labor intensive than industrial farming and meat production methods, but are beneficial in terms of minimizing off-farm inputs such as pesticide and fertilizer as well as promoting carbon sequestration, soil quality, and animal welfare. In addition, the producer conducts their own slaughter, packaging, and distribution of products in a direct-to-consumer model, limiting distribution to a several hour drive from the farm. Our analysis of this case suggests two particularly interesting findings. First, products are characterized and marketed as *local* food. Second, this producer strongly asserts that scaling operations would destroy core capabilities and quality conventions.

When asked to define *local* food, the consensus of Case D responses indicated that in this context the term denotes more than geographical proximity between producer and consumer. Two main themes emerged related to their conceptualization of local food. First, local food offers the opportunity to develop a connection between the producer and the customer. Second, the term indicates a type of proximity that allows transparency regarding production methods and quality attributes [61]. In addition to limiting how far products travel, their distribution and retailing model maximizes direct contact between the producer and the customer. In addition to their production methods, this connection was reported to be an important, order-winning attribute for their products. Customers are encouraged to visit the farm and facilities, the producer regularly holds open on-site events, operates

an on-site store, and maintains an extensive website explaining their values, production methods, and quality attributes. The producer charges a substantial premium as compared to similar products available in specialty grocery stores or farmers' markets. Domestic and ecological quality conventions are intrinsic in product marketing, and justify the price premium (e.g., public and market). Because of relatively high prices and the method of distribution, these products are largely unavailable to socio-economically disadvantaged consumers. As a result, there is a tradeoff for this producer with respect to achieving market, ecological and public conventions versus the civic convention.

Conventional business logic suggests that where a premium can be earned, expansion and greater production scale are desirable. However, our interviews at Case D reflected strong resistance to the idea of scaling production up to higher volumes. Interviewees expressed serious doubt regarding the potential for achieving economies of scale with these practices. The producer firmly rejected the idea that a large firm could successfully undertake similar agricultural practices. The rationale behind this assertion was twofold: (1) Loss of the relational aspect of small volume production with direct-to-consumer sales would erode consumer trust in quality attributes; and (2) Perception that larger firms, because they rely heavily on external investment, would be unable to balance potential tradeoffs between sustainable practices and seeking higher efficiency.

Cases concentrating on Niche tend to be smaller firms with highly specific target markets. Cases D, G, H, I, and N serve relatively small geographic areas, reinforcing their branding as local food. The domestic convention as evidenced by these firms does not necessarily rely on external validation by certifying bodies or other institutions. Instead, Niche producers may develop and rely on their own definitions of practices that fulfill the domestic conventions. In this sense, this type of producer is particularly vulnerable to encroachment by Growth products, which may have more obvious and externally validated quality attributes and are more competitively priced than their Niche counterparts. To defend their competitive advantage, producers concentrating solely on Niche must therefore consistently deliver products that are perceived by customers as fulfilling domestic conventions with attributes that justify price premiums (public, market). We observed multiple instances of Niche producers implementing practices to defend their domestic convention, including direction connection to consumers (Cases D, G, and H) and high levels of transparency regarding production methods (Cases D, E, G, N, and U). In each case, demonstrating authenticity to customers appears to be central to domestic convention, conveying producer trustworthiness and maintaining socially embedded attributes of transactions [45,61–63].

Firms that compete in one quadrant face potential tradeoffs. Niche firms, for example exploit existing capabilities and accept lower productivity to earn a price premium. By forgoing entry into Growth, for example, such firms are trading off access to volume demand with avoiding investment in industrial conventions. For some Niche producers, this choice is philosophical (Case D, G, I), however, multiple producers indicated that they were more interested in, and believed their skills and resources were more suited for, incremental growth, including expansion of scope, within Niche. Firms may not have the resources to compete in multiple quadrants, or may decide that focusing on single set of quality conventions is more efficient. Finally, as explained by multiple respondents at Case D, there may be a perceived quality risk associated with expanding to different supply or demand characteristics.
