Networks Collaboration in Wine Sector SME: A Study Applied to a Portuguese Wine Region

Networks Collaboration in Wine Sector SME: A Study Applied to a Portuguese Wine Region

Maria João Sousa Lima (Polytechnic Institute of Setúbal, Portugal) and Luísa Cagica Carvalho (Open University, Portugal)
DOI: 10.4018/978-1-4666-9567-2.ch035
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Collaboration between companies, especially for SMEs, can increase their ability to compete in new global markets. The emergence of new wine-producing countries over recent decades allows to evaluate its impact on the performance of a collaborative supply chain in countries with wine production tradition. This chapter describes the collaboration in the interface wine-grower/wine maker in a Portuguese wine region (Setúbal Peninsula). It reveal that intensification of collaboration between wine companies could increase their competitiveness in the domestic and the international markets, due the benefits it endorses. It also exposes some factors that stand out as conditioners to the operationalization of a deep collaboration, restricting it to just a few activities. The results of a case study performed suggested that the wine industry structure and the product characteristics are factors that negatively influence the intensity and the extension of collaboration. Trust is the intangible element that stands out as critical to the intensity of collaboration.
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The increasing world trade liberalization together with the emergency of new wine producing countries (USA, Argentina, China, Australia, Chile and South Africa) has significantly increased competition to the European wine producers (old world wine countries, such as, Spain, France, Italy, Germany and Portugal), certifying that the wine market is gradually globalized.

The globalization of the wine market, results on a growth of the supply and increasing the volume and the easy access to the information. These factors increase the demand and improve the conscious and exigency of customers. Nowadays, customers are alert to the novelties but, for a regular consumption, remain to claim the maximum satisfaction with the least allocation of his income. They seek the best balance between quality and price (Cembalo et al, 2014).

Some studies performed by Aicep Portugal Global1 in several countries (Brazil, 2008; Switzerland, 2009; Singapore, 2010; China, 2011, Spain, 2011, USA, 2011; Norway, 2011; Netherlands, 2013; Germany, 2014) and a study developed in Portugal (CVRVV2 et. al., 2003) suggest that standards of wine consumption fall into wines with a lower price. Although a wine with a lower price potentially have a wider range of buyers, the value that consumers are willing to pay per bottle depends on the occasion, the place (supermarket or restaurant) and the category of wine. It also appears that people with a high income consume all categories of wine in terms of price and not just the higher price categories. In non-traditional producer countries such as USA the price, although to be an important factor in the choice, it is not so important to the sophisticated consumers whose focus is on quality and taste the experience of consuming an imported wine. On the other hand in China (Muhammad et al., 2013), where consumption and imports of wine registered a high growth in last years, the increase on wine demand are associated with the fast growth of the middle class, many purchases are made for a status reasons (expensive/distinct wine region, like French wines) or accessibility (cheap) rather than by balanced quality/price ratio. In Eastern countries the consumer is very driven by the price of wine and influenced by opinion leaders in the area. It is important to be aware that the global wine consumption is not only increasing but it is also changing in the terms on the place and pattern.

Key Terms in this Chapter

Critical Factors: Elements that are necessary for an organization or project to achieve its goals.

Wine Sector: It is one of the sectors that integrate the agro-food industry. It integrates the production of grapes, the wine production as well as the organizations of control and certification.

Collaboration: Joint work to carry out a defined task or a common business purpose.

Supply Chain: It is a system of organizations, people, activities, information and resources involved in moving a product or service from supplier to customer.

Network: Consists in linkages established between companies in order to share resources and get critical mass that allow them competitive gains.

Case Study: It is a depth investigation of a subject (the case), using one or more methods, as well as its related contextual conditions.

SME: Enterprise which employs less than 250 people; has an annual turnover of less than €50m and/or balance sheet assets of less than €43m.

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