BUS602: Marketing Management

In recent years, the wine sector has had an evolution marked by an increase in market competition. While wine production in the world was 267 million hectoliters (mhl) in 2016, consumption remained at 241 mhl that year. A more detailed analysis shows that the difference between production and consumption is especially in countries that traditionally produce. For example, Italy, France and Spain, which together account for 50.0% of the world's wine production, have had a noticeable decline in consumption. Production in 2016 in these countries was 50.9, 43.5, and 39.3 mhl, respectively, while their consumption, was 22.5, 27.0 and 9.9 mhl. This important difference between production and domestic consumption has changed the market for these countries, which have started to export in order to sell their products in international markets. As a consequence, sales in the international wine market have grown from 60 mhl in 2000 to 104 mhl in 2016 (3.6% in volume per year) and from 12 to 29 billion (bn) euros (5.9% in value per year). Spain, due to its greater differential between production and domestic consumption, has become the country with the largest volume of wine exports (22.9 mhl), although in value it ranks third, with 2.6 bn euros, behind France and Italy, with 8.2 and 5.6 bn euros, respectively.

In this paper, the focus of analysis is centered on the factors that determine the firm's performance, using a sample of Spanish wineries.

Wineries in Spain have undergone an important process of updating and renewal in recent years. It is estimated that since the year 2000, more than 130,000 ha have been reconverted and restructured, with investments of more than 800 million euros. There are 4052 wineries in Spain, which are mainly small in size and are family owned businesses. Nevertheless, there are a significant number of agricultural cooperatives, which coexist alongside the large firms with production centers in different areas in order to diversify their supply. All of them face the challenge of competitiveness. In this study, authors consider a cooperative an autonomous association of persons united to meet common economic, social, and cultural goals. In Spain (Ley 13/2013) cooperatives are considered the following firms: cooperative societies, second-tier cooperatives, cooperative groups and agrarian transformation societies.

The analysis of the circumstances that allow for a superior performance, and the scope of a dominant position in the competitive environment, has been studied from the point of view of two different approaches. The first one is centered in the characteristics of the sector, while the second one takes into account the resources of the firm. Several studies show that these two approaches are complementary and compatible.

The review of the literature has allowed to find out that the majority of studies undertaken for the wine sector are focused on large companies, due to the fact that it is easier to access information for these firms than for smaller ones, both in terms of objectives and results. The study of competitive advantages becomes difficult when the focus is placed on small and medium-sized enterprises, although they amount for about 99.8% of the companies in the EU-27 and 99.9% in Spain, as shown in Table 1. In this study, size is determined by the number of employees.

Table 1. Number of companies according to employee stratum and total percentage of firms, in Spain and the EU27, 2015.

a

Number of employees.

The main objective of this article is to empirically test how resources, capabilities and strategies modulate the results of companies. For doing so, this study analyzes the technological and managerial capabilities of the firm, its strategic positioning and the business result in the market, as well as the financial result. The main contribution of this article is to analyze the distinct importance of resources and capabilities and strategy in the wine sector and how these vary according to the type of company. This study considers three types of companies depending on ownership: 1) Individual companies, formed by a single person firm; 2) cooperatives, formed by cooperative societies, second-tier cooperatives, cooperative groups and agrarian transformation societies; and 3) mercantile societies, which contemplate limited companies and corporations. The results show that resources capabilities and strategy do not have the same importance in all firms. In individual companies strategy prevails over resources and capabilities. In cooperatives it is primarily technological capabilities that dominate performance. However, the wineries constituted as mercantile companies explain their performance by a combination of strategies, resources and capabilities.

The paper is organized as follows: after this introduction, Section 2 presents the theoretical framework. Section 3 offers the theoretical foundation for the proposed hypotheses. In the following section, the methodology used is presented: sample, variables, and the model to test the hypotheses. Section 5 reports the results of the analysis and the theoretical and practical implication. Section 6 shows the conclusions drawn from the results. And finally, Section 7 presents the limitations and applicability of the study.