Sustainable Business Models: Challenges on potato agro-industry SMEs

Abstract Potentially, agro-industrialization presents valu-able opportunities and benefits for developing countries, in terms of overall processes of industrialization and economic development, export performance, food safety and quality. Though most of potato agro-industry is worked on small and medium sized enterprises (SMEs), that have multidimensional problems, however the SME sector’s motto for the next millennium is “Think global – Act local”. Potato agro-industries will be sustainable only if they are competitive in terms of costs, prices, operational efficiencies, product quality and flexibility and also integrate the social and green (ecology) issue . In facing the global market, they need to find new ways to avoid wastage through the effective design and operation activities that are efficient in organizational system. Trough the sustainable business models, potato agro-industries have three responsibilities, that are: financial, environmental and social responsibility. The main purposes of this study are analyzing the sustainability business performance and formulating the sustainable business model of the potato agro-industries SMEs. Purpossively, three potato agro-industries actors were determined, as follows: medium, small and micro scale. MDS (Multi Dimensional Scalling) was used for analyzing data with the Rap-Potato (Rapid Appraisal for Potato) method. The results show that the sustainability business performance of medium scale potato agro-industry is in a very sustainable state, small scale and micro scale are in a fairly sustainable state. The sustainable business model for improving performance include: in medium scale agro-industry are: increasing financial access, handling and utilizing waste that disrupts the environment, and increasing product delivery responsiveness. The sustainable business model for small scale agro-industry are: the addition of water sources alternative, increasing income, and increasing financal access; whereas in micro scale agro-industry, the strategies are: arrange the location of agro-industries, increasing family labor participation, and improving product quality.