Being different matters! : A closer look into product differentiation in specialty coffee family farms in Central America.

Discua Cruz, Allan and Centeno-Caffarena, Leonardo and Solano, Marcos Vega (2020) Being different matters! : A closer look into product differentiation in specialty coffee family farms in Central America. Cross Cultural & Strategic Management, 27 (2). pp. 165-188. ISSN 2059-5794

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Abstract

Purpose There is a growing interest in understanding the strategic behaviour of family firms producing international commodities such as coffee, particularly in contexts where decisions about what products to sell, where to commercialise them and how to promote them appear to be highly based on both business and family aspects. The purpose of this paper is to explore product differentiation strategies in family firms in the specialty coffee industry across Latin American countries. Whilst the socioeconomic relevance of coffee production in Central America is unequivocal, the approach and rationale of families that engage in specialty coffee production remain underexplored. Design/methodology/approach This study examines product differentiation in specialty coffee family farms across countries in Central America: Guatemala, Honduras and Nicaragua. The study relies on in-depth interviews, case studies and an interpretative approach to unpick the dynamics of product differentiation by families in business dedicated to producing specialty coffee. Findings The findings show that product differentiation in specialty coffee family farms is influenced by both business and family aspects and driven by entrepreneurial stewards. Coffee-farming families can engage in product differentiation through a shared vision, a combination of traditional and specialised knowledge, and through the continuous development of an exchange network. The findings reveal a connection between families in business balancing family and business interests, and the strategic intention to build up their assets entrepreneurially over time. Originality/value This study contributes to the literature on stewardship and strategic behaviour in family firms when families in business engage in differentiating their products in a highly competitive industry. More specifically, this study focuses on companies across countries where coffee is of crucial socioeconomic importance, and where the said companies are owned and managed by families. The study expands understanding of product differentiation in family-enterprise-first businesses and suggests that the family elements in differentiation can be explained through an entrepreneurial stewardship perspective.