TY - JOUR
T1 - Modelling the group dynamics in the wine industry
AU - Penagos-Londoño, Gabriel
AU - Ruiz-Moreno, Felipe
AU - Sellers-Rubio, Ricardo
N1 - Publisher Copyright:
© 2020, Emerald Publishing Limited.
PY - 2023/2/8
Y1 - 2023/2/8
N2 - Purpose: One of the main difficulties for wine managers is understanding and interpreting how some strategies and company behaviours could affect firms’ performance. This study aims to contribute to improve these concerns by examining the evolution of the competitive wine industry structure over time using the strategic group membership dynamics approach. Design/methodology/approach: This study empirically analyses a data set spanning the period 2004–2014 to identify the strategic groups in the Spanish wine industry and to model their evolution over time. A time inhomogeneous hidden Markov model (HMM) is used for this purpose. Findings: Three strategic groups are identified: Young Makers, Quality Lovers and Major Players. Young Makers are small wineries that produce low-quality wines. They are not part of a collective brand – Protected Designation of Origin – and do not invest in marketing campaigns. Quality Lovers produce the highest quality wines but offer a narrow assortment. They invest modestly in advertising, and most of them belong to a Protected Designation of Origin. Major Players produce medium-quality wines, offer a wide assortment and invest heavily in advertising. The groups seem stable over time. Practical implications: The results show that strategic group analysis can be used to identify and compare patterns of strategic activity within the wine industry, providing a better understanding of the competitive environment. Originality/value: No previous studies have analysed the competitive structure of the Spanish wine industry. This study delineates the structure of this industry using strategic groups, which is supported by a valid econometric model. Therefore, from a theory base perspective, this study adds new evidence to the stream of research on strategic groups by investigating their evolution over time in the wine industry and the effect of strategic group membership on performance.
AB - Purpose: One of the main difficulties for wine managers is understanding and interpreting how some strategies and company behaviours could affect firms’ performance. This study aims to contribute to improve these concerns by examining the evolution of the competitive wine industry structure over time using the strategic group membership dynamics approach. Design/methodology/approach: This study empirically analyses a data set spanning the period 2004–2014 to identify the strategic groups in the Spanish wine industry and to model their evolution over time. A time inhomogeneous hidden Markov model (HMM) is used for this purpose. Findings: Three strategic groups are identified: Young Makers, Quality Lovers and Major Players. Young Makers are small wineries that produce low-quality wines. They are not part of a collective brand – Protected Designation of Origin – and do not invest in marketing campaigns. Quality Lovers produce the highest quality wines but offer a narrow assortment. They invest modestly in advertising, and most of them belong to a Protected Designation of Origin. Major Players produce medium-quality wines, offer a wide assortment and invest heavily in advertising. The groups seem stable over time. Practical implications: The results show that strategic group analysis can be used to identify and compare patterns of strategic activity within the wine industry, providing a better understanding of the competitive environment. Originality/value: No previous studies have analysed the competitive structure of the Spanish wine industry. This study delineates the structure of this industry using strategic groups, which is supported by a valid econometric model. Therefore, from a theory base perspective, this study adds new evidence to the stream of research on strategic groups by investigating their evolution over time in the wine industry and the effect of strategic group membership on performance.
KW - Dynamics
KW - Inhomogeneous hidden Markov model
KW - Quality
KW - Strategic groups
KW - Wine industry
UR - http://www.scopus.com/inward/record.url?scp=85132638373&partnerID=8YFLogxK
U2 - 10.1108/IJWBR-09-2021-0049
DO - 10.1108/IJWBR-09-2021-0049
M3 - Article
AN - SCOPUS:85132638373
SN - 1751-1062
VL - 35
SP - 25
EP - 44
JO - International Journal of Wine Business Research
JF - International Journal of Wine Business Research
IS - 1
ER -