1 Introduction

This paper investigates how small and medium-sized enterprises (SMEs) can orchestrate local business relationships with suppliers to co-create value and leverage this value to develop business relationships. Industrial marketing theorists emphasize the critical role of supplier relationships and supply network organization in value creation (Walter et al., 2003; Johnsen, 2018). Among the various theoretical perspectives that address this role, the market-as-network approach developed by the Industrial Marketing and Purchasing (IMP) Group holds a prominent position (Håkansson, 1982; Håkansson & Snehota, 1995; Ford et al., 2011). Over the years, IMP Group scholars have identified numerous advantages of close supplier relationships (Walter et al., 2003; Håkansson & Waluszewski, 2007; Li et al., 2021; Perna et al., 2022). For instance, prior research has shown that supplier connections can foster innovation (Tunisini et al., 2011). Additionally, suppliers can enhance efficiency in production processes and the customer’s business model (Guercini & Runfola, 2021). Research has also highlighted the importance of understanding the interplay between local and global supply processes, particularly how companies can manage supply networks across different geographical levels (Kano et al., 2020). Therefore, managing supply relationships effectively is crucial for companies. A company becoming a network orchestrator assumes a significant role in this context. Network orchestration has been defined as “the process of assembling and developing an interorganizational network” (Paquin & Howard-Grenville, 2013, p. 1623). It has been noted that orchestration can be assumed by a player legitimated by others through a shared goal (Perks et al., 2017). However, the existing literature has primarily focused on large companies or leading firms within specific regional clusters, such as industrial districts, known for their capabilities in organizing and managing supply networks (Tunisini et al., 2011). This highlights a gap, as calls have emerged for further research on the strategies employed by SMEs (Runfola et al., 2022).

Despite facing liabilities, SMEs play a crucial role in the economy (Eggers, 2020). However, the ability of small and medium-sized companies to orchestrate local supply networks to generate value, not just locally but also for developing business relationships (with existing or new actors), remains under-explored. Managing relationships across supply and sales markets within the IMP framework is critical (Turnbull et al., 1996). While the literature acknowledges the inherent challenges of leveraging local value in non-local business relationships, particularly for SMEs (Baù et al., 2021; Ranfagni et al., 2021), it also highlights the crucial role of relationships in enabling SMEs to strategize, position themselves within the network, and become key players (Håkansson & Snehota, 2017). This paper aims to address this gap by investigating the following research questions (RQs):

  1. RQ1)

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

  2. RQ2)

    How can SMEs leverage local value to develop business relationships?

From an empirical perspective, the paper presents a qualitative case study of a small-medium Italian pasta company. The pasta industry holds unique characteristics. Several large, internationally recognized companies dominate the sector (Cacchiarelli & Sorrentino, 2018). Furthermore, controlling raw materials (i.e., wheat supplies) is essential within the industry. Recent geopolitical tensions have further heightened interest in this area. Most importantly, the pasta industry represents a cornerstone of the “Made in Italy” brand. Both national and regional origin can enhance product value (Fauser & Agola, 2021) as consumers increasingly prioritize transparency (Mazzù et al., 2022). Made in Italy is an essential asset for SMEs and can contribute to shaping their role as network orchestrators. The literature highlights that Made in Italy is a brand that encompasses a series of characteristics recognized internationally (such as craftmanship and quality) and is often linked to the entrepreneurial skills of Italian companies, even small and family-owned ones (Matarazzo et al., 2021). In this context, we present a case study of a small-medium Tuscan company that successfully established a local supply network to produce a distinct “made-in-Tuscany” product. This strategy has garnered notable national and international recognition, with international markets contributing significantly to its revenue. This paper offers a novel perspective by integrating insights from the existing literature with the findings of this case study. This paper’s unique contribution lies in examining how the SME acted as a network orchestrator combining actors, resources, and activities to develop a “made-in-Tuscany” product.

Additionally, it introduces four key strategies for SMEs to link local value creation with developing business relationships. By implementing these strategies, an SME can position itself as a central player within its local business network, contributing to its development and the development of the surrounding area. The paper analyzes these strategies across two dimensions: national vs. international levels and own brand vs. private label proposals.

2 Theoretical background

2.1 Supply networks, orchestration, and local networks for SMEs

The Industrial Marketing and Purchasing (IMP) approach emphasizes that companies do not operate in isolation within business contexts (Håkansson & Snehota, 2017). Instead, they exist within a network, heavily influenced by relationships with other actors (Håkansson & Snehota, 1995). The supply network is among the critical concepts proposed by this school of thought. While the term seems straightforward initially, Johnsen (2018), reviewing various contributions using it, highlights the lack of a single, universally accepted definition. The author emphasizes the existence of varying conceptualizations of the supply network. These depend on whether one considers only upstream relationships (i.e., the network of supplier relationships) or also includes downstream relationships (i.e., customer relationships) alongside other network actors who indirectly influence buyer-supplier interactions (such as non-business actors). The broader definition aligns better with research emphasizing new trends in supply market relationships. For instance, Martinelli and Tunisini (2019) propose a framework highlighting the need for supply chains to reorganize around end customers’ central needs and requirements. The authors suggest achieving this requires greater collaboration among supply chain actors to generate value. This can lead to increased integration between producers and other network players, allowing them to exploit emerging trends, such as technological advancements (Li et al., 2021), and co-create new value propositions (Perna et al., 2022).

The concept of network orchestration is linked to the ability of a company to develop relationships and nurture the development of a network to converge toward a common goal (Perks et al., 2017). It has been highlighted that this requires company skills, such as initially generating interest in a topic, even serendipitously, and then acting by creating even formalized relationships between actors (Paquin & Howard-Grenville, 2013). The industrial marketing literature has highlighted that network orchestration is not related to the control that an actor can have over the network (Perks et al., 2017) but instead to the ability to influence others towards collaboration, for example, oriented toward “value creation through collaboration” (Dessaigne & Pardo, 2020, p. 224). Dessaigne and Pardo (2020) summarize the orchestration activities, considering the various conceptualizations within the literature, under an umbrella term encompassing the network orchestrator’s stewardship role. Tian et al. (2021), focusing on the capabilities that a network orchestrator can have, refer to three main ones (pp. 21–22) that are targeting (for example, the ability to direct resources towards a goal), legitimizing and envisioning (for example, the ability to obtain legitimacy, generate commitment, and share objectives), and expertise building (in terms, for example, of identifying and combining knowledge among players). The ability to orchestrate the supply network is often attributed to large companies, potentially affecting smaller companies within the network (Johnsen & Ford, 2006; Bocconcelli et al., 2018).

Moreover, within the supply network debate, geographic space (Törnroos et al., 2017) emerges as a critical topic for discussing relationships and the network’s “local” dimension. The literature has explored this theme, mainly through the lens of focal firms within geographically delimited clusters or industrial districts. A local network can be understood as a “network delimited by spatial proximity” (Guercini & Runfola, 2015, p. 271). Guercini and Runfola (2015) analyze the diverse roles of a focal company within a cluster, emphasizing its potential to act as a gatekeeper for the local system by combining internal and external resources. Tunisini et al. (2011) highlight that local suppliers can favor “knowledge and innovation development, flexibility of production and delivery performance, and cost efficiency” (p. 1019) and guarantee an effective “combination of product capabilities and volume and mix flexibility” (p. 1021). Recent research by Runfola et al. (2023) points out the importance of supply relationships within specific territories as a factor contributing to “resilience” against exogenous events due to their potential to activate positive relational dynamics. However, compared to traditional research focusing on districts or large enterprises, the role of small and medium-sized enterprises (SMEs) within these networks has received less attention. The local level of network relationships can be a factor that allows small and medium-sized businesses to become orchestrators in a circumscribed territory. Coming from a specific territorial area, such as a region, can be an asset to be exploited in a business context that appreciates territorial specificities in terms of made in and country of origin, leading to the creation of new customer relationships, for example, in international markets (Guercini & Milanesi, 2017; Festa et al., 2020). However, the broader literature (Ranfagni et al., 2021) has explored the challenges companies face in maintaining and strengthening ties with their local territories in the expansion process, especially abroad. This research emphasizes the difficulty of preserving the territorial identity of a company’s offerings amidst expansion.

In summary, the potential for SMEs to effectively become focal partners in orchestrating local supply chains needs a more profound analysis. While the literature highlights inherent challenges for SMEs (Eggers, 2020), the IMP approach can offer a framework that sheds light on how SMEs can orchestrate value creation.

2.2 Conceptualizing value in the network

The concept of value helps understand business markets (Walter et al., 2001) and, precisely, in business-to-business markets, conceiving, producing, and delivering value have a pivotal role (Anderson & Narus, 1998). In the marketing field, value is conceived in two main different ways: the first one conceptualizes value as the value of goods and services, considering its monetary nature, while the second focuses on the value of buyer-seller relationships (Lindgreen & Wynstra, 2005). In the second stream of research, “value is seen as reputation, relationship quality, trust, customer satisfaction and customer retention” (Matthyssens et al., 2016, p. 61). The extant literature suggests that exchange does not create value, but joint co-creation (Vargo & Lusch, 2004; Grönroos, 2008) is developed through interaction (Galvagno & Dalli, 2014). A joint value-creation process makes it possible to partner to generate innovative products and services (Möller & Törrönen, 2003). Value co-creation processes involve a number of diverse stakeholders: they form networks where resources are integrated and applied through interaction (Jaakkola & Hakanen, 2013). Specifically, the value co-creation process between buyer and seller can be extended to the broader stakeholder and network context (Frow & Payne, 2011) from an interaction-based perspective (Ford, 2011). Based on this approach, value creation is the foundation upon which relationships are built (Walter et al., 2001), and interactions and investments in relationships allow value co-creation in the network (Lindfelt & Törnroos, 2006). Hence, value creation may also depend on the network of other relationships the actors involved have (Möller & Törrönen, 2003). Actors may perceive value in different ways (Cantù et al., 2012), and it can take the form of “profits, but also knowledge, image, safety, health and a variety of environmental benefits” (Huemer & Wang, 2021, p. 721).

Relationships characterizing the value-creating network offer a rationale for delivering value (Kothandaraman & Wilson, 2001). Huemer (2006) emphasizes, through his research on value creation and supply network structures, that value is generated not just through production and marketing but also through establishing and efficiently managing connections within the network. In the extant literature, the original buyer-seller division is increasingly being replaced by the study of value creation through interaction between customers and suppliers (Lindgreen et al., 2009). In this vein, due to the dynamic nature of business relationships, maintaining long-term customer-supplier relationships requires offering superior value to the customer (Eggert et al., 2006), investing in the company’s resources and capabilities to beat the competition (Kothandaraman & Wilson, 2001). According to the study of Andersen and Christensen (2005), value derives from the combination of various local and international relationships in supply networks. In the network approach, all businesses are both suppliers and customers concurrently (Ford, 2011). They seek and provide resources through relationships (Cantù et al., 2012). Therefore, from an IMP perspective, value is co-created by both parties within and through their relationships.

Moreover, value creation derives from an exchange of resources and the complementarity of a set of connected resources (Johanson & Strömsten, 2005). As explained by Dessaigne and Pardo (2020), value co-creation is a network issue, requiring companies to combine resources for value creation (Kohtamäki & Rajala, 2016), also through collaboration. Also Grönroos and Helle (2010) propose value co-creation as a collaborative process. In this vein, orchestration activities have the potential to direct and manage value creation in the network (Batterink et al., 2010).

A compelling IMP perspective in this sense is that of the Resource Interaction Approach (RIA) (Baraldi et al., 2012; Prenkert et al., 2022), according to which the interactive and networked characterization of resources allows value creation (Mouzas & Ford, 2012) because of the heterogeneous nature of the resources themselves. Resource heterogeneity means that how a resource is used and connected to other resources determines its value (Bygballe et al., 2023). A company does not have access and control over all the resources needed, so the reference network is central for resource interactions and combinations (Harrison & Håkansson, 2006; Laursen & Andersen, 2023). Resource interaction connects with value creation in business relationships and networks (Prenkert et al., 2022). Huemer (2006) points out the importance of the network size for value creation in terms of number of players and network composition and nodes. The interaction between resources creates interfaces constituting the points of contact between resources (Prenkert et al., 2019). Based on the RIA, mixed interfaces between technical and organizational resources across organizational boundaries have a particular potential for value creation (Bygballe et al., 2023).

Thus, the network provides a crucial context for value creation and a value-creating system in which a constellation of companies co-produce value through business network relationships (Blankenburg Holm et al., 1999). Considering the interactive vision of the business, Ford (2011) underlines that the company’s network relationships are with several customers, co-developers, suppliers, and distributors. Accordingly, conceptualizing value creation from the business relationships perspective reflects the interaction process where relationship value is created (Corsaro & Snehota, 2010). Indeed, “value originates in relationships” (Haas et al., 2012, p. 95). It follows that, from the perspective of the ARA model (Håkansson & Snehota, 1995), value comes from the link between the three layers of Activities-Resources-Actors of the customer-supplier relationship and the connection of these two businesses to the broader network (Haas et al., 2012). Precisely, actors, resources, and activities characterize business relationships in the network and are interrelated: resources are bonded to activities and actors use resources within activities (Glinka et al., 2023). Moreover, in the ARA model, bonds at a firm level affect the orientation of activities and resources, and also the behavior of the company itself. Resources are distributed among different actors that are linked both directly and indirectly in the network (Hauke-Lopes et al., 2022).

Following the IMP debate, the interaction should not be considered as a means of creating value, as the interaction between the parties is the process of value itself (Håkansson et al., 2009). It implies that value co-creation “involves value processes within organizations, in relationships between actors, and within a network of actors” (Jaakkola & Hakanen, 2013, p. 49).

3 Methodology

The qualitative case study methodology was considered appropriate to answer the paper’s research questions through the collection of in-depth data. We explain the choice of an explorative methodology (Yin, 2009) by considering the nature of the research questions and the topic addressed. We propose a single case study to contribute to existing knowledge and widen the current understanding (Siggelkow, 2007). The existing literature recognizes the importance of case research to generate and test new theories (Eisenhardt & Graebner, 2007). In particular, using a case study in industrial marketing allows a better understanding of the observed phenomenon (Dubois & Gadde, 2002) also given the involvement of networks of organizations (Easton, 2010).

We decided to carry on a single case study (Eisenhardt, 1989; Yin, 2009) that regards an Italian food company, Fabianelli, a pasta factory in the Tuscany region. We purposely selected this firm for its revelatory potential (Coviello & Joseph, 2012). It is a historic SME run by a family, founded in 1860 and currently in its fourth generation. Fabianelli has its roots in the local territory and, through its production, is the emblem of the Italian culinary tradition and culture, undoubtedly closely linked to pasta. Indeed, in Italy, pasta is not just a food but a fundamental element of union and sharing; it is an integral part of the life and popular culture of all Italians. Italy is the world leader in pasta, leading the world’s per capita pasta consumption (Sabatini et al., 2021). At a national level, Tuscany is one of the regions where there is a more excellent production of pasta and where marketing this product has created an economy. Castiglion Fiorentino and the alluvial plain of the Chiana in Tuscany cradle the Fabianelli family’s passion for pasta and its pride in being Tuscan. The company aims to spread Tuscany’s solid and recognizable style through refined ingredients and flavors. Indeed, as an example, the “Pasta Toscana”, a branded product with a regional origin, reflects the corporate desire to disseminate a markedly local product; specifically, the company integrated this offer with other offers of Italian pasta already present in its production. Despite being an SME, Fabianelli is a relevant player in the sector. However, its local and national vocation has not prevented Fabianelli from expanding internationally; its local supply network is recognized and grown internationally due to its link with the territory. The foreign market covers over 60% of the entire production with a capillary diffusion in all continents and an export range to more than 70 countries. Therefore, experience and future innovation coexist and interface dynamically in this company.

For the data gathering, we considered multiple sources. This choice granted triangulation (Woodside & Wilson, 2003) and improved data credibility and research construct validity (Creswell & Miller, 2000). Specifically, in-depth semi-structured interviews were conducted face-to-face and represented this study’s primary data source (Eisenhardt & Graebner, 2007). IMP studies considerably relied on this typology of inquiry, which has been presented as “the most effective means of gathering data” (Lindgreen et al., 2021, p. A8). We followed an ad hoc interview protocol to meet the research objectives precisely and based the track of interviews on open questions. The guideline included four sections that we considered crucial for the study: (a) company history, business model characteristics, and respondents’ profile; (b) local supply chain structure and relationships with the main actors involved; (c) production development and differentiation based on the outlet market; (d) local market management and foreign market entry strategies. Thus, we conducted in-depth interviews (in-person and digital) with various informants to reach construct reliability (Dubois & Gibbert, 2010). In particular, we managed, in total, fifteen interviews with the CEO, the Export Manager, the President, and the Purchasing Manager of the company. The interviews were carried out over a period ranging from September 2022 to January 2024, and all of them were transcribed verbatim. Table 1 summarizes specific information about the respondents and the interviews. In addition, we collected secondary materials, such as data from the company’s website, news in online magazines, the company’s annual reports, and internal documents provided by the informants. Informal contacts with the interviewees also enriched the data collection via telephone and e-mail. They were crucial for improving the structure of the interview protocol over time in a dynamic and interactive process with the firm. Furthermore, the empirical investigation benefited from a former relationship of one of the researchers with the company management for previous research.

Table 1 Key informants and interviews. Source Our elaboration
Full size table

For the data analysis, we first triangulated the recorded interviews with secondary information to answer the research questions by examining and validating data from different sources. In doing so, we strengthened the trustworthiness of the results (Flick, 2018). Moreover, we focused on the collected data by organizing and combining the information obtained; we finally derived the conclusions (Miles & Huberman, 1994). In particular, we performed a content analysis of documents and interview transcripts to investigate the case study. Sharing the research methods, materials, and interpretative logic, the authors analyzed and interpreted the interview transcripts according to the paper’s aims (Eisenhardt, 1989).

Thus, in the following section, we present the case study, which has been preliminarily shared and discussed with the company for its final validation.

4 The case study

4.1 The company and the “Pasta Toscana” project

Fabianelli is a pasta producer in Valdichiana (central Tuscany), an area with a strong agri-food production vocation. The close link with the local territory coexists with the international aims of the company. Indeed, as evidence of this international openness, Fabianelli has been included, for two consecutive years (2022 and 2023), in the Export Champions ranking, which, drawn up by Il Sole 24 Ore and Statista, reports the 250 Italian companies with the highest export rate. In the Fabianelli Magazine (31/03/2023), it is possible to read that the firm considers this achievement as “a very important recognition for the company, which, based on an export share of 75.16%, acquires an increasingly international vision, with its pasta Made in Tuscany and exported all over the world”. Therefore, the strong territorial roots and the broad international involvement can be considered the two aspects characterizing the activity of Fabianelli. In this vein, the high capability to combine these dimensions (local and global) is undoubtedly represented by the “Pasta Toscana” project, which is “the brand that most embodies the authentic essence of the territory and of the pasta factory itself. Made from a selection of the best 100% Tuscan durum wheat, traceable thanks to a QR-code, and packaged in 100% recyclable paper packs, ‘Pasta Toscana’ is a guarantee of quality and a starting point for a certified and sustainable short supply chain entirely developed within the region” (Fabianelli Magazine, 16/12/2021).

The enterprise’s origins and deep local roots represent the antecedents for the conception and development of this project. The company registered the trademark earlier but only in 2007, when it noticed a growing customer interest, it developed the project, proposing a branded product from a local supply network. In particular, this branded product concerns a range of pasta (e.g., wheat, whole wheat, organic wheat, and artisan pasta) labeled “Pasta Toscana” that responds to the aim of targeting final consumers with a regional brand. However, the company lacks direct involvement in the upstream phases of the pasta supply chain, as it neither owns land nor engages in agricultural activities like sowing or cultivation. Indeed, the wheat used for the “Pasta Toscana” production consists of purchases made from agricultural producers in other areas of the region, particularly in the provinces of Siena (Val d’Orcia), Arezzo (Valdichiana), and the Maremma. In this vein, a respondent says: “it was important for us to reach an agreement with the farmers because our company does not own a mill or land. Not being able to interact directly with that part of the supply chain, we needed to go to the origin and therefore to the farmer who sows the wheat” (R1).

From this perspective, it becomes crucial to understand how Fabianelli has established a network of local suppliers, the nature of these relationships, and the impact generated in the local context.

4.2 Creating value at a local level

Bridging agriculture and manufacturing, the “Pasta Toscana” brand relies on the specific roles each subject plays, considering that relationships are a crucial component. The company has in fact relevant relationships with local farmers; it has also developed a relationship with the local farmers association, i.e., a territorial association representing agricultural producers, to facilitate collaboration agreements. As part of this initiative, the local farmers association identifies and contacts local farmers who want to collaborate with Fabianelli, coordinating not only the initial agreement signing but also the ongoing collaboration throughout the process. Moreover, this entrepreneurial association plays a directing role, supporting companies in some specific operations, such as grain storage management.

For its part, Fabianelli demonstrates its commitment through purchasing wheat from these local farmers at a fixed price level, which is typically above the market price. Supply contracts are signed with single farmers, immediately establishing the price that will be paid for the wheat, along with minimum protein content requirements. Furthermore, additional benefits are provided for each percentage of protein that the farmer can obtain; according to this aspect, one interviewee specifies: “the agreement provides that we immediately recognize a fixed price for the wheat the farmer produces for us at specific minimum protein content requirements, with an additional bonus for each extra percentage of protein obtained” (R1).

Through this mechanism of incentives, farmers who produce good quality wheat are therefore satisfactorily rewarded. Farmers ensure the established supply of wheat, adhering to specific delivery terms and, above all, adequate quality of the raw material.

Indeed, the interactions between Fabianelli, the local farmers association, and local farmers do not end in the initial negotiation phase; indeed, they continue throughout the supply relationship. Initially, the company collaborates with individual farmers to jointly determine the types and quantities of wheat to be sown, factoring in potential product innovations. Throughout the cultivation phase, Fabianelli maintains regular communication with both the association and individual suppliers, receiving updates on the progress of their activities. Beyond sowing, the company actively monitors grain growth, potential water scarcity impacts, and the effects of excessive rainfall. Therefore, the relationship is constantly monitored: this also helps strengthen the personal ties established between the company and local farmers: “we receive continuous updates from farmers and evaluate with them how the sowing is going and how the wheat is growing. We follow them constantly. […] We have direct contact with farmers we know personally. For example, we recently met with the association representative and the farmers to renew the short supply chain agreement and met here, in our headquarters” (R4).

The relationship between the company and local farmers has developed without particular problems or critical issues, with all the actors involved in the network having high resources and skills to carry out the planned activities. While there was an understandable lack of mutual knowledge in the initial start-up phase of the project, the growth of trust in the company increased the number of farmers adhering to the initiative. From the initial 7 suppliers located in the Valdichiana who initially decided to sign the supply agreement, the number increased to 21 in the later years to reaching 40 farms involved currently.

The local supply network of “Pasta Toscana” is integrated and completed with the purchase of packaging from local companies. Indeed, beyond sourcing local raw materials and keeping industrial processes local, Fabianelli partners with two Tuscan companies to supply the pasta wrapping and the cardboard packaging. In this way, a product made in the regional context is guaranteed. Moreover, the company also guarantees the complete traceability of the product. The origin of the wheat used to make the single pasta pack is retrievable on the package. Consumers seeking information can scan a QR code on the packaging, directing them to a dedicated company website landing page. By entering a unique code printed on each package, they can discover the specific Tuscan area where the wheat was sourced. The results coming from this initiative have been highly favorable for all the parties in interaction, generating different dimensions of value.

Farmers show a high degree of satisfaction and involvement. The growing number of local enterprises that joined the project is proof of this. Due to the recognized prices, local farmers’ turnover has increased and become stable. The quality of the grain produced has also increased with farmers investing in the relationship and cultivating wheat sold to Fabianelli. Furthermore, offering a fully local product fosters pride and high satisfaction among farmers who contributed their efforts to its creation; in this regard, one respondent claims that “the project is working because the farmer is satisfied, does not feel exploited, and continues to invest. […] I imagine the great satisfaction that the farmer can feel seeing ‘Pasta Toscana’ on the shelf! In my opinion, this is the secret of the project’s success” (R3).

Another dimension of value creation is related to the activities of the local association of farmers. It has contributed to developing a valuable project for the area, increasing its institutional representation capacity and political visibility through this relationship; the following sentence is emblematic: “the association had the opportunity to convey this project within its circuit, creating an additional commercial outlet for all its members” (R1).

These relationships, as a consequence, have made it possible to maintain and nurture a local supply network in the area, bringing together different players and promoting connections within the local context, thus supporting its sustainable development. The aim was to establish a new way of collaborating based on the increasing involvement of different players, the enhancement of specialized skills, and the ability to maximize and share the results. Therefore, in doing so, it is achievable to preserve and develop knowledge and skills.

Finally, the last dimension is represented by the value proposition for the final consumers. Considering the consumer’s perspective, the company’s ability to build and implement a local supply chain through numerous collaboration agreements with local suppliers guarantees, simultaneously, the quality of the raw materials and the products. This aspect is currently considered critical in the food industry, as traceability emerges as a crucial topic.

4.3 Leveraging local value for national and international relationships development

The essential aspect distinguishing Fabianelli from other pasta producers is the local supply network, which permits pasta production using only Tuscan wheat and making the production entirely in Tuscany. The branded product lets the company develop and strengthen various relationships with national and international customers. The company distributes its brand nationally through retailers, even large retail chains. However, “Pasta Toscana” is experiencing growing international demand, attracting both new customers and existing customers familiar with Fabianelli’s other brands (namely “Fabianelli” and “Maltagliati”). These customers are mainly importers-distributors and leading retail chains: “we have always exploited this project by mainly linking it to a global expansion perspective. We did not think about ‘Pasta Toscana’ to sell it in Italy” (R3). The reason behind this approach is represented by the appeal that the brand, and therefore the origin of the product, have towards foreign consumers, as stressed by one informant: “there is a generalized propensity to look for something more exclusive and authentic and the word ‘Tuscany’ is among the most sought-after because it is perceived, especially abroad, as excellence, as a very high quality of life. This is reflected in the consumer’s perception, as a guarantee of the quality of the product” (R2). The results achieved in recent years have confirmed this approach; the same informant continues: “so ‘Pasta Toscana’ was the product that grew more than the others in terms of sales. The secret was offering a high-quality product that could also tell something different from classic Italian pasta” (R2).

Moreover, the company, both at the national and international levels, partners with retailers and other pasta producer brands to develop private labels with regional origin. Some customers rely on Fabianelli to produce Tuscan pasta with their brand. There are different initiatives in this area. For instance, when the “Pasta Toscana” brand was launched, the company made pasta for one of the leading Italian large-scale retail chains. This actor needed to offer pasta made in Tuscany in its stores. Although the relationship had been dormant for a while, Fabianelli was able to rekindle it thanks to the advancements of “Pasta Toscana”. The reputation and skills developed over the years have also allowed the company to supply a range of pasta made with Tuscan wheat, labeled with the premium brand of the same retail chain for the United States of America market.

A similar situation relates to the supply of products for a US distributor, which aimed to promote and launch a line of Italian pasta made with Tuscan wheat with its brand. Fabianelli developed this relationship as the sole supplier, obtaining different advantages: it gained entry to an area of the United States where it was not present until then; it strengthened its positioning as the collaboration with a prestigious company represents a positive reference for future potential customers.

Another initiative involves producing a private label pasta range for a major national player, i.e., a group controlling various stages of the food supply chain, from agriculture to the distribution of a wide range of products.

Finally, beyond its international focus, the company has consistently produced pasta for a Local Farmer Consortium, which launched its brand to promote Tuscan wheat and products from this local supply chain.

The success of the “Pasta Toscana” project across various national and international markets can be attributed to the company’s specific approach. Fabianelli initially focused on pre-existing customers with established business relationships, regardless of their location (such as the United States, Canada, Korea, India, or Eritrea). As explained by the Export Manager of the company, this strategy resulted in a positive response by existing customers. Initially, there were test orders, often pushed by the company’s sales managers and based on mutual knowledge developed in previous business relationships. Subsequently, “Pasta Toscana” became the most requested product on the local markets for many of these customers, further solidifying existing business relationships. Based on the positive feedback, the company seized the opportunity to establish new relationships with customers that, in the same foreign countries, had specifically expressed interest in “Pasta Toscana”. This enabled Fabianelli to expand the market reach and interact with a new customer base.

In summary, over the years and through the local supply network project, Fabianelli has successfully maintained its local dimension, becoming the main pasta factory in Tuscany, and positively established itself internationally.

In conclusion, the “Pasta Toscana” project highlights the company’s ability to manage relationships in the network, as shown in Fig. 1.

Fig. 1
figure 1

Main network relationships. Source Our elaboration

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5 Discussion and implications

Our study, in answering the first research question - RQ1) How can SMEs act as network orchestrators for local value co-creation? - shows how the company investigated orchestrates business relationships at a local level to create value. In particular, the company involved business network partners sharing the goal of valorizing the local supply chain and territorial features through the “Pasta Toscana” project. Leveraging trust, the company created a product with a specific local origin, responding to the needs of final consumers. The company assumes a focal position in the local network in our empirical investigation. It interacts with the local actors; this highlights the importance of cooperating for value creation, as shown in the literature (Perks et al., 2017; Martinelli & Tunisini, 2019), to meet consumer demand (Mazzù et al., 2022).

The fact that a small and medium-sized enterprise (SME) can orchestrate relationships and resources within a network is particularly relevant because, due to its smaller size, it can often develop greater legitimacy within its local territory. This, in turn, allows the SME to build and leverage trust with other actors more effectively. Our research emphasizes SMEs’ critical role in creating local value by acting as network orchestrators, as evidenced by their typical activities (Paquin & Howard-Grenville, 2013; Dessaigne & Pardo, 2020). Furthermore, SMEs have the unique ability to effectively combine resources at the local level (Laursen & Andersen, 2023). This focus on building trust-based relationships leads to the creation and enhancement of value within the local context. The local dimension fosters local value creation through trust-based mechanisms, which aligns with existing literature (Franklin & Marshall, 2019). This enables even small and medium-sized enterprises (SMEs) to position themselves as legitimate focal actors. In our research, the personal involvement of the company’s representatives further facilitated this process. They engaged directly with local suppliers, spending time to convince them of the project’s mutually beneficial nature.

Similarly to the suppliers, the company’s local presence adds value to the initiative’s success and diffusion. The activities range from meetings and company visits to formal agreements, consistent with the network orchestrator role highlighted in the literature (Paquin & Howard-Grenville, 2013).

In particular, considering the three layers of the ARA model, it is possible to highlight that the company interacts with a multiplicity of actors (local farmers, packaging suppliers, local farmer associations, and national and foreign customers). The company performs specific activities with each actor, including knowledge sharing on raw materials, exploration for innovations and new opportunities in terms of product assortment, production monitoring and assistance, fostering engagement among partners, co-designing and developing packaging solutions, and leveraging exporting knowledge tailoring customers’ requirements. Therefore, the company develops and mobilizes specific resources in the local supply network through its network orchestration activities. When combined, recombined, and co-developed, these resources, alongside those of other network actors, as described by Baraldi et al. (2012), generate value (Prenkert et al., 2022).

Additionally, we offer original insights that address the second research question: RQ2) How can SMEs leverage local value to develop business relationships?

Following our empirical investigation, we propose four strategies, as shown in Fig. 2. Our findings reveal that SMEs can leverage locally created value to establish business relationships. In this respect, the SME’s orchestration activities align with the potential to leverage a preference for local origin and the unique characteristics associated with the “Made in Italy” label and its territorial provenance (Matarazzo et al., 2021; Ranfagni et al., 2021). This can be achieved along two main dimensions: (a) National/International levels: SMEs can expand relationships either nationally or internationally, building upon local value creation; (b) Own brand/Private label proposals: SMEs can choose to focus on promoting their own brand or developing private label products.

Fig. 2
figure 2

Business relationships development: emerging strategies. Source Our elaboration

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The first strategy focuses on developing national-level relationships through the company’s branded products, which we label “own brand regional origin strategy”. By leveraging local relationships, the company develops relationships with national retail chains and traditional customers seeking regionally-focused products. This valorizes the local supply chain guaranteed by the project, meeting national consumer demand for distinctive, regionally sourced products.

The second strategy, “own brand international origin strategy”, involves developing international relationships through the company’s brand. Here, the company cultivates relationships with importers, distributors, and foreign retail chains, promoting products of Italian origin and a distinct territorial identity.

The third strategy is developing national-level relationships through private labels, a strategy we label “private label regional origin strategy”. The company nurtures relationships with national retail chains, national agro-industrial customers, and local farmer consortiums. In this role, it acts as a supplier, creating private label products with a distinct regional origin.

The fourth strategy, “private label international origin strategy”, focuses on developing international relationships through private labels. The company interacts with national retail chains (for exported products) and foreign retail chains, partnering to develop private label products specifically for foreign markets.

The four strategies mutually reinforce and demonstrate the company’s ability to act as a network orchestrator. The company is a local network gatekeeper (Guercini & Runfola, 2010). Its strategies enable it to maintain and nurture the local supply network, a crucial element given the need to continuously strengthen its connection to the territory (Ranfagni et al., 2021). The analyzed project exemplifies how collaboration, increased engagement of various players, enhancement of specialized skills, and sharing of results ultimately maximize benefits for all involved.

This paper’s findings regarding the two research questions offer valuable contributions to the literature. We show how SMEs can orchestrate local value creation and enhance business relationships, highlighting the acquisition of a focal position through the IMP perspective. Our study shows how network orchestration activities (Andersen & Christensen, 2005; Perks et al., 2017; Laursen & Andersen, 2023) generate value and position an SME as the orchestrator. Additionally, we underscore how a local supply network fosters new international opportunities. These relationships enrich the “Made in Italy” association, emphasizing a regional offering. Our analyzed case study demonstrates how localized value creation becomes relevant for companies seeking to combine territorial roots with international business development (Baù et al., 2021; Ranfagni et al., 2021). Finally, we show how the IMP approach provides a valuable framework for understanding how locally rooted companies can generate value, subsequently enabling them to expand both nationally and internationally.

From a managerial point of view, managers of SMEs should rethink the company’s role in the supply network. Indeed, SMEs can assume the role of focal actors in creating value with a local origin. We identify strategies SMEs can use to enhance the value generated through interactions with national and international players. Furthermore, implementing these four strategies benefits all actors within the supply network. Emphasizing local origin strengthens relationships with local partners, fueling virtuous cycles of value creation and positively impacting the entire supply network. From a managerial perspective, our analysis suggests that when an SME, through its supply network, develops a project aimed primarily or even exclusively at foreign markets, it needs to develop further relationships and use new resources to allow it to interact with international customers. In other words, the company, in its role as orchestrator, must also have the ability to balance different needs, such as production times and trends with the needs and requests of foreign customers or technical-manufacturing skills of an agri-food nature with those more commercial, such as export and retail services. Our analysis exemplifies how an SME can become an orchestrator and leverage the “local origin” to drive the local network’s overall development.

6 Limits and directions for future research

This paper has some limitations that also represent directions for future research. First, it considers a case in the pasta industry. Although relevant, the food sector may have a more direct connection with the origin and local supply than other sectors. Hence, while studying this industry may have shown some fascinating insights for this paper, future research should be oriented toward comparing the results of this study with findings from other industries. Second, the paper relies on a single case study. The case is emblematic of the phenomenon under investigation, but future research should develop a cross-case analysis that could propose further insights. Finally, the paper has considered value from the perspective of a focal company. Hence, conceptualizing the value created may depend on this decision. We argue that future research should investigate how other actors in the network perceive the value creation of a local supply network.

This paper sheds light on how SMEs, acting as network orchestrators, can foster local value creation, potentially leading to business relationships development with diverse clients. Moreover, it reinforces the importance of the market-as-network approach in understanding and analyzing business markets.