The rivalry trap – plant-based foods as transformers and destroyers

Abstract

Purpose The purpose of this paper, applying concepts in the plant-based food sector, is a focus on the competitive rival trap for startup firms, with their initial advantage for under-served market segments, only to be overtaken by scale, speed, and brands of incumbent brand firms. As a case study of industry transformation, the food production sector illustrates how organizational innovation brings new forms of rivalry, from the farm gate to the kitchen plate. As a result, startups face a rivalry trap, if unable to scale quickly, as incumbents reframe their strategic response with startup acquisitions, corporate incubators or alliance partnerships consumer demand. Design/methodology/approach This paper outlines the features of precision agriculture, a new paradigm for agriculture and food production, requiring new competences and skillsets in the protein revolution, including issues like virus, bacteria and the molecular structure of food groups, animal breeding and veterinary medicine. Plant-based foods is used as a case study for startups and the rivalry trap. Findings The emergence of plant-based foods is a case study of market opportunity and creative destruction, where the potential market varies from $25bn to $72bn, and growing faster in the dairy sector. However, food incumbents bring new strategic responses and a rivalry trap, where startups must gain scale quickly in capabilities, talent and marketing prowess, often exploiting demand in market niches unimpeded by incumbent rivals. Research limitations/implications Startups in biological sciences face massive challenges to increase scale and scope, even with unique intellectual property. Practical implications Startup firms need multidisciplinary management teams with a global outlook. Social implications Plant-based foods form part of the protein revolution but face challenges of scale, cost competitiveness and taste, despite advantages for climate mitigation. Originality/value The impact of technological and science applications has blurred the traditional concept of industry boundary, with huge variations in the intangible knowledge component in their core activities and capabilities. Underlying variations imply that not all industries have similar supply demand conditions, with variations in input costs, capital intensity and innovation needs, with strategic implications for the rivalry trap.