International Business Strategy for Wine Industry - Case Study Example

The paper looks into the wine industry by looking into resource and institution based view and the way in which the wine industry has grown over the old economies. The paper highlights the method in which the resource based view which utilizes the competencies and resources of an organization gain competitive advantage. This along with the institutional based view presents, the manner in which the formal and informal environment factors affect the wine industry. The resource based view presents the behaviour in which the resources present in an organization helps to deliver success for an organization. This view concentrates on the competitive advantage that the firms are able to get by using their resources, after understanding the industry competitiveness and bringing the transition which helps to shape the performance of an organization. (Millard, 2010) The way in which the wine industry is changing due to the new resources and technology, being used by the new world, presents an excellent case of the use of resources to develop the company. The resource based view for the Wine Industry has been divided into industry based on competition, firm based resources and capabilities and the condition and transition which helps to identify the strategy of the new world. (Barney & Jay, 2001) On the industry based competition view, the case presents different areas which highlighted the growth the new world showed. The resource based view highlights the importance resources have for an organization and stands as a differentiating factor in comparison to others. (Kotelnikov, 2001) This was evident in the case, as there was availability of land which was cheap for the new world compared to the old, make them gain a strong foothold in the wine industry. This made it easy to produce goods and provide an advantage. The resource based view concentrates on the development of technology which helps them to be ahead of competitors and provide extra return (RBV, 2011) as seen from the usage of technology in harvesting wine. This made the new world differentiate as technology made it easy to produce wine and also helped to earn superior return, at the same time provide quality. There was wide difference in the quality of wine manufactured by new and old economies which made people shift towards higher quality wines of the new economies. This view also highlights that developing asymmetry, which helps to provide a competitive advantage as others can’t replicate them, provides a competitive advantage to firm as those resources are rare. (RBV, 2011) This was seen in the Wine Industry case, where the new world economies were able to create a brand power that helped them ensure that they stayed ahead of competition from the old economies. On the firm based resources and capabilities view the case presents different areas which highlighted the growth the new world showed. The resource based view capitalizes on the resources and capabilities which an organization possesses and helps to distinguish on the basis of those factors. (Adam, 2011) The case presents the manner in which the new world was able to use both the tangible and intangible assets. The new world was able to create value which helped them to gain competitive advantage (Prusak, 2007) as seen by the fact that the new world had the capability to harvest at night, which made their resources differentiate from the old economies. It created additional value and helped them grow. Resource based view also requires that organization lays importance to knowledge management so that it is able to capitalize on the resources and develop their working environment. (Prusak, 2007) This is evident in the case as the new economies were able to integrate different methods of production, stands as a strong reason for being able to integrate their resources. This is further demonstrated by the fact, that the new world was able to use computer to produce wine and also used steel tanks, in comparison to some of the methods used by old economies. A study in this direction presents that, firms who are able to innovate by using IT help to create market power which helps to bundle the resources to develop the competencies. (Rivard, Raymond & Verreault, 2006) This is evident as the new economies were able to invent new models for marketing which increased people preference towards the product. The development and invention of new bottles and design helped the new economy gain relevance in the wine industry. The new economies had the resources to market the wine themselves by establishing networks and dealers, which were not prevalent with older economies, gave them a competitive advantage to understand the customers better and design their strategy which helped them to gain a large chunk of the wine industry. This has helped them bargain well and garner maximum advantage due to it. (Lippman, Steven, Rumelt & Richard, 2003) On the condition and transition view, the case presents different areas which highlighted the growth the new world showed. A study in this direction shows that ability to integrate and change with the environment helps organization to be able to capture a wide chunk of the market. (Kraaijenbrink, Jeroen, Spencer, Groen & Aard, 2010) This is further substantiated that by understanding the changes that the business needs to encounter will help to bring a change in the working condition. (Connor, 2002) This is seen in the case which highlights that the change in environment made it easy to cultivate grapes at different locations. The change in culture integration in Argentina and Chile helped wine production to be integrated as a part of the production process. Also the change towards wine as a preferred drink in Australia and other parts brought about changes and gave new insights into wine production. Another change noticed in the new world was that they were willing to move away from the traditional ways and try newer methods on an experimental basis helped them change the manner in which wine was produced. The resource based view thus concentrates on the different factors which will help to determine the success of the new economies. The strategy used here helps to determine the success the manufacturing units get which finally leads towards the success of business. (Moran & Meso, 2008) This thereby helps to understand the assets the business has and the manner it can grow. The institution based view is another approach which presents the impact on formal and informal environmental factors has on the wine industry case. This will help to identify the different factors which are helping new economies and differentiate themselves from the old economies. Institution based view presents the change in environmental factors which has a change in the pattern of working for industries. (Steve, 2008) This is also evident in the case, as the change in government regulations in different country brought about a change in the manner business was conducted. A study in this direction shows that different economies have different rules and regulations which suit industry. This helps industries to differ and use factors which help them integrate the factors that will support development. (Peng, 2002) This was evident as the Australian government, framed laws suiting the wine cultivation and helped the industries get maximum leverage by operating. A finding on the institutional based view suggest that, organizations who are able to understand the environmental factors which includes formal and informal factors, will be able to get maximum result and ensure development. (Peng & Khoury, 2008) This is evident in the case, where the new world economies realized the importance of integrating the factors so that the wine industry benefitted from it. This is also substantiated by the growth in revenues and sales from new world economies as they were able to integrate the factors better. The institution based view of strategy presents that organization by integrating the different factors which help to understand the environmental factor will help emerging economies to grow. (Wang, Jiang & Peng, 2008) This is seen in the case where new economies were able to understand the different factors to develop their working environment and helped the new world economies ensure steady growth. The paper thus, presents the manner in which resource and institution based view helps new economies in comparison to the old economies. It highlights the different areas of resource based view which requires that organizations are able to understand the resources and capabilities, and by directing those resources by understanding the changes will help industries to differentiate and provide competitive advantage. This along with the institutional based view suggest that, using the formal and informal helps organization to understand the environmental factors better which thereby helps to develop economies. This goes with the case on wine industry where utilizing the resource, and institutional based view helped the new economies to develop and have an upper hand over the old economies. This shows that using measures will help the new economies to develop and improve their wine business worldwide. References Adam, (2011). “RBV-Resource Based View”. MBA Tutorials Barney, Jay, B. (2001). “Resource Based Theories of Competitive Advantage: A ten year retrospective on the resource based view”. Journal of Management, 27 (6), 889-902 Connor, T. (2002). “The resource based view of strategy and its value to practising managers”. Luton Business School. United Kingdom Kraaijenbrink, Jeroen, Spencer, Groen & Aard. (2010). “The resource based view: a review and assessment”. Journal of Management, 36 (1), 349-372 Kotelnikov, V. (2001). “Resource Based View (RBV) of Firms”. Business e-coach Lippman, Steven, A., Rumelt, Richard, P. (2003). “A bargaining perspective on resource advantage”. Strategic Management Journal, 24, 1069-1086 Millard, R. (2010). “The Resource Based View of Strategy”. Adventure of Strategy. Edge International Moran, T. & Meso, P. (2008). “A resource based view of manufacturing strategy and implications to organizational culture and human resources”. Journal of Business & Economics Research, 6 (11), 99-110 Peng, M. & Khoury, T. (2008). “Unbundling the institutional based view of international business strategy”. 256-268, Delhi Prusak, L. (2007). “Business Knowledge Exchange: Resource Based View”. Strategic Management Peng, M. (2002). “Towards an institutional based view of business strategy”. Asia Pacific Journal of Management, 19 (2-3), 251-267 RBV. (2011). “Resource Based View of Firm”. 12 Manage. The Executive Fast Track Rivard, S. Raymond L. & Verreault D. (2006). “Resource Based View and Competitive Strategy: An integration model of the contribution of information technology on firms’ performance”. Journal of Strategic Information System, 15 (1), 29-50 Steve, J. (2008). “An Institution based view of international business strategy: a focus on emerging economies”. University of Texas, Dallas Wang, D., Jiang, Y. & Peng, M. (2008). “An Institution based view of international business strategy”. Journal of International Business Strategy, 39, 920-936 Read More