The Sources Of Competitive Advantage In The Uruguayan And New Zealand Beef Industries

The Uruguayan and New Zealand beef industries have developed under similar climatic conditions that favour pastoral farming. Both industries are export focused. However, the development paths taken by the two industries have been different. Porter’s diamond is used as a framework for analysing the competitive strengths and weaknesses of each industry. It is concluded that the lower prices received by producers in the Uruguayan industry, linked historically to Uruguay’s foot and mouth disease (FMD) status but now caused primarily by tariff issues in the North American market, have been a fundamental problem. This has led to
different input-output ratios than have been experienced in New Zealand, and made investment based on intensification less attractive. The New Zealand industry has also benefited from deregulation, such that investors have been more willing to invest in the knowledge that their competitive position will be determined by market forces rather than by government behaviour. The key to the future prospects of the Uruguayan industry is by addressing the market access problems and the provision of a deregulated agribusiness environment. The challenge for the New Zealand industry is how to maintain and enhance its current position as other countries seek to copy and surpass its performance.

Keywords: Competitive advantage, Porter’s Diamond, beef industry, Uruguay, New Zealand.