FARMERS BUSINESS SCALE RELATION WITH PRODUCT DIFFERENTIATION IN THE CZECH REPUBLIC

Two step cluster analysis was method for clustering the data, aiming to identify clusters, within examined farms, differing from the others in level of Product Differentiation and to proof, whether there is a significant relation within level of Product Differentiation, Scale of Business and Production Process & Conditions of examined farms. Primarily, data are clustered by "Business Scale", then by "Pure Effectiveness" and then, finally, by all variables. There was defined Product Differentiation in a simple way, as capability to reach higher profitability then other competitors in the same industry/conditions, without external support/subsidies. Product Differentiation validates ability to valorize product, i.e. to sell for higher price per physical unit, then competitor. It is not primarily focused inside production process effectiveness. There was developed unique performance indicator within this research, named Pure Effectiveness, aiming to evaluate Product Differentiation, i.e. effectiveness of business gross profitability, related to Total Output and to eliminate effects of subsidies on business. Primary data collected for FADN (Farmers Account Data Network CZ) represents 1 048 holding, representing 13 901 farms in the Czech Republic. Data for the research was delivered in aggregated level and after input cleaning there were 41 aggregated samples, each with 96 variables, characterizing each sample. The research results, there is not a significant relation within level of Product Differentiation, Scale of Business and Production Process & Conditions of examined farms. Higher "Pure Effectiveness" is dedicated, probably to those, who have better knowledge, skills, approach and will to succeed.