Using Fabianelli, a Tuscan pasta producer, as a single case study, Andrea Runfola, Giulia Monteverde, and Antonio Picciotti investigate how small and medium-sized enterprises (SMEs) can co-create value through local relationships with suppliers and various partners, leveraging the local network to become “network orchestrators.”

Drawing on the market-as-network approach from the Industrial Marketing and Purchasing (IMP) Group, they demonstrate how SMEs can generate value extending beyond regional borders and ultimately shape national and international business networks.

The article highlights the case of Fabianelli, as this company has been able to build a robust local supply chain for its “Pasta Toscana” branded product, which uses 100% Tuscan wheat and recyclable packaging—a unique selling point in international markets where “Made in Tuscany” is synonymous with quality. This case offers practical insights into the challenges and opportunities for SMEs in the food industry, showing how even smaller companies can achieve competitive advantages by emphasizing their local origin.

We spoke with the authors to uncover practical insights for managers looking to integrate these innovations effectively into their operations.

How can SMEs act as network orchestrators for local value co-creation?

SMEs can act as orchestrators of relationships and resources for local value co-creation by taking on the role of focal actors within their reference local network. In doing so, SMEs engage with business network partners with whom they share the aim of enhancing the local supply chain and the unique characteristics of the local territory; this is what Fabianelli has done with the “Pasta Toscana” project through the creation of a product with a marked local origin. Even leveraging their smaller size, SMEs can effectively interact and cooperate with local actors for local value co-creation, developing greater legitimacy and trust-based relationships in the network. In addition, the company’s local presence within the reference network can facilitate its role as an orchestrator, allowing it to relate directly with various players involved in the supply chain, perform activities with each player, and mobilize specific resources for local value co-creation.

How can SMEs leverage local value to develop business relationships?

SMEs can rely on locally generated value to foster business relationships as, by acting as network orchestrators, they can capitalize on the potential growing preference for products with a local origin and the distinctive qualities associated with the “Made in Italy” label. This result can be achieved through two primary dimensions: national/international levels: SMEs can expand relationships nationally or internationally, building upon local value proposition; own brand/private label proposals: SMEs can choose to prioritize their brand or develop private label products. Expressly, according to the study, SMEs can adopt four different strategies for business relationship development:

1. own brand regional origin strategy (developing national-level relationships through the company’s branded products);
2. own brand international origin strategy (developing international relationships through the company’s brand);
3. private label regional origin strategy (developing national-level relationships through private labels);
4. private label international origin strategy (developing international relationships through private labels).

Why is strengthening relationships with local partners beneficial for SMEs?

By positioning themselves as central players within the local business network and reinforcing relationships with local partners, SMEs can contribute to developing the local area and their national and international development. Specifically, by leveraging local relationships, SMEs can develop fruitful and profitable business contacts with domestic and foreign customers seeking regionally focused products with a precise territorial identity, either through their own brand or private labels. Through ongoing and trust-based relationships with local actors, SMEs strengthen their capabilities and skills, establish themselves as critical local reference points in the business landscape, affirm their reputation in the domestic market, and bolster their international business ambition and expansion. In this way, SMEs can also positively impact overall performance by increasing turnover and sales.

Copertina: Foto di izhar ahamed da Pixabay