Redesigning the food chain: trade, investment and strategic alliances in the orange juice industry

Abstract

Change in trade barriers and capital flow creates opportunities for redesigning the food chain. The orange juice chain in U.S. and Brazil provides an interesting illustration of how institutional harmonization, high import tariff rates and complementary capabilities open new opportunities for strategic alliances and the re-arrangement in the FCOJ chain. This finding has the following implications. First, trade barriers are not enough to support FDI and related internationalization decisions. Second, the perspective of market integration creates a positive environment for new strategic alliances and the re-design of the food chain. And third, the existence of complementary capabilities between foreign and domestic companies is a necessary condition for this type of supply chain re-arrangement.