Armand Gilinsky, Sandra Newton and Robert Eyler
The purpose of this study is to investigate the impact of strategic orientations and managerial characteristics on the performance of wine businesses in the US wine industry. Also…
Abstract
Purpose
The purpose of this study is to investigate the impact of strategic orientations and managerial characteristics on the performance of wine businesses in the US wine industry. Also considered is the power of firm size as measured by production and firm age since founding, as moderating variables that could attenuate or heighten their impact.
Design/methodology/approach
Data were gathered via an online survey, where 306 representatives of the US wineries responded. Data are analyzed using descriptive statistics, multinomial logistic regression, cross-tabulations and Pearson chi-square (χ2) analysis.
Findings
Wine businesses that reported increased sales and profits over the previous three years made significant changes to organizational structure and staffing levels. Wineries that reported flat or decreasing sales and profits were less apt to make changes in organizational structure or staffing levels. Firm age was found to mediate performance in terms of incremental sales and profit growth; firm size was found to mediate only incremental profit growth.
Practical implications
Developing skills in marketing, strategic planning and entrepreneurial thinking to build a defensible industry position and to create the staffing and structure to support that position appear to be of great importance to wine businesses.
Originality/value
This study develops and tests a model investigating how firm size and age impact strategic orientations and managerial characteristics on the performance of the US wine businesses. This study investigates which strategic orientations and managerial characteristics wine businesses need to be successful in the future.
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Armand Gilinsky Jr, Sharon Lee Forbes and Rosana Fuentes-Fernández
The purpose of this paper is to investigate philanthropic practices in the US wine industry, as prior research on charitable giving by wine industry participants is limited…
Abstract
Purpose
The purpose of this paper is to investigate philanthropic practices in the US wine industry, as prior research on charitable giving by wine industry participants is limited. Earlier studies on corporate philanthropy are inconclusive about the direction and the degree of community philanthropy on organizational effectiveness. There are also notable research gaps, including the lack of research into philanthropy in small businesses and the dominance of US studies.
Design/methodology/approach
This paper reviews the literature on corporate social responsibility and philanthropy, presents a series of propositions and a theoretical model, sets forth a research schema to investigate to what extent philanthropic activities are motivated by altruistic as well as strategic considerations across the global wine industry and reports preliminary findings from a sample of 100 US wine producers.
Findings
In brief, 99 per cent of the wine businesses surveyed significantly engaged in altruistic behavior in their local communities, primarily helped local charities, donated at the median 150 cases each year, and those activities represented about 1 per cent of pre-tax profits, comparable to or above giving by other participants in other industries.
Research limitations/implications
As survey data were self-reported, empirical proof has yet to be obtained to support or refute the findings of this investigation. Comparisons to philanthropic practices in other wine regions of the world are not yet completed.
Practical implications
Wine producers pursue community stewardship and maintain good corporate citizenship to create direct benefits apart from economic growth or jobs, but future research is needed to ascertain whether motivations are primarily altruistic or strategic.
Social implications
Communities embrace the presence of wine businesses to foster job creation and economic activity, but remain uncertain about the other community benefits.
Originality/value
This exploratory paper fills a major gap in understanding with respect to examining motives for giving and expected outcomes by wine industry participants.
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Armand Gilinsky Jr, Julia Mallon and Adele Santana
This case should be paired with textbook chapters that cover the important roles of leadership, staffing and corporate culture in the strategy implementation effort. The case can…
Abstract
Theoretical basis
This case should be paired with textbook chapters that cover the important roles of leadership, staffing and corporate culture in the strategy implementation effort. The case can also be used to review textbook chapters covering competitive and industry analysis, differentiation strategies, goal setting and financial analysis. In advanced courses, readings on leadership and corporate social responsibility should be assigned to inform debates regarding Vasu’s style and his commitment to creating shared value. Alternatively, instructors in retail management courses could assign readings that investigate the linkages of human resource management, service quality and other behaviors to optimal supermarket performance.
Research methodology
The authors revised this case and Teaching Noes from an MBA student case writing project in Fall 2017. The student conducted focus groups with Pacific Market’s consumers, worked with Vasu and his consultant, Tom Scott, a former CEO of a local grocery chain, supplemented with secondary industry research and demographic information about the cities of Sebastopol and Santa Rosa. Meetings to develop the company mission statement and long-term goals took place over Fall 2017. Tom provided the operating information and trade area analysis used in the case, and Vasu provided financial statements and background information.
Case overview/synopsis
After a career as a turnaround specialist for Silicon Valley high-tech startups, Vasudev Narayanan (Vasu) acquired Pacific Market, a two-store chain in Sonoma County, California, in 2013. By Fall 2017, rival local chains had expanded, online vendors threatened in-store shopping, the Amazon-Whole Foods combination threatened disruption, and consumers increasingly insisted on “buying local.” Vasu aimed to grow revenues 50 percent by 2020, and fund Good Karma Foundation, a charity in his native India. Strategies to achieve these objectives included infrastructure investments, employee profit sharing, changing the mix of products and amenities or finding a buyer for the operation.
Complexity academic level
The Pacific Market case is intended for undergraduate or MBA-level strategic management courses. The case pairs well with coverage of how leaders approach the strategy implementation effort, a topic typically introduced toward the end of the course. The case gives students practice in applying strategy formulation concepts and frameworks, e.g. PESTEL analysis, Porter’s industry forces, key industry drivers, strategic group mapping, SWOT analysis, corporate social responsibility and financial ratio analysis. Instructors might also use this case to cover similar material in retail management courses. The case is highly suitable as a written assignment for an examination and/or for team presentations.
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Armand Gilinsky and Brent Trela
International marketing, national competitiveness, strategic decision-making, wine.
Abstract
Subject area
International marketing, national competitiveness, strategic decision-making, wine.
Study level/applicability
Undergraduate and MBA.
Case overview
The nationally important Georgian wine industry by 2008 was in a deep recession due largely to the continuing 2006 Russian wine embargo, prior to which Russia had been the largest export market for Georgian wines. Second World War-era Georgian wineries such as Shavteli (disguised), in the historic Racha-Lechkumi wine-producing region, were disadvantaged due to aging facilities, lack of tourist infrastructure, and inadequate capital to make needed changes to compete in the global markets for emerging economy wines. All nearby wineries faced continuing operating deficits, high inventory levels, and could lose much of their aging wine inventory to oxidation if they could not quickly sell more wine or convert the wine to brandy. To avert becoming another defunct producer, Shavteli needed a strategy. Industry observers were divided about whether Shavteli and its sister Georgian wineries should continue operating independently, seek government support, or form a marketing association to create new export demand. Students need to prepare a strategic plan for Shavteli and the Georgian wine industry.
Expected learning outcomes
Students should develop well-supported recommendations for competitive strategies in an emerging economy. Students should use strengths, weaknesses, opportunities, and threats and country competitiveness analyses to ascertain vision and mission, segmentation, targeting, positioning, and alliance strategies for international markets.
Supplementary materials
Teaching notes.
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Armand Armand Gilinsky and Raymond H. Lopez
In October 2004, Mr. Richard Sands, CEO of Constellation Brands, evaluated the potential purchase of The Robert Mondavi Corporation. Sands felt that Mondavi's wine beverage…
Abstract
In October 2004, Mr. Richard Sands, CEO of Constellation Brands, evaluated the potential purchase of The Robert Mondavi Corporation. Sands felt that Mondavi's wine beverage products would fit into the Constellation portfolio of alcohol beverage brands, and the opportunity to purchase Mondavi for a highly favorable price was quite possible due to recent management turmoil at that company. However, should it be purchased, strategic and operational changes would be necessary in order to fully achieve Mondavi's potential value. In making a decision, students need to consider the attractiveness of the wine industry, its changing structure, its share of the overall market for beverages, and rival firms' strategies. As rival bidders may emerge for Mondavi's brands, Constellation must offer a price that demonstrates its serious intent to acquire Mondavi.
Rosana Fuentes-Fernández and Armand Gilinsky Jr.
This paper aims to develop an understanding of cooperation and collaboration in the natural wine industry in Spain as well as a deeper understanding of the challenges facing…
Abstract
Purpose
This paper aims to develop an understanding of cooperation and collaboration in the natural wine industry in Spain as well as a deeper understanding of the challenges facing natural wine producers in the 21st century.
Design/methodology/approach
Field interviews using a structured questionnaire were conducted with five Spanish producers of natural wine in five different regions during fall 2018 and late spring 2019. Interviewers prompted respondents to expound upon the potential of incorporating cooperative relationships to help producers grow their businesses, share production and marketing techniques and explain how they educate consumers about natural wines.
Findings
Content analysis among five field-researched case studies reveals common goals and challenges, but Spanish natural wine producers have not reached a consensus on the benefits of cooperative relationships. Respondents acknowledge that their indecisiveness and consumer confusion about natural wines are barriers to working together.
Research limitations/implications
Generalizations from a sample comprised five companies cannot be made, nor can we claim that respondents were unbiased. Respondents were reluctant to release financial and production data; thus, the outcomes of coopetition strategies were indeterminate. It may be that a coopetition strategy is only positive up to a fixed point, upon which a diminishing-returns effect is manifested. Observations were made during a period when the Spanish wine industry was contracting, as political uncertainty in that country and post-Brexit clouded the future of tourism in and exports from certain Spanish wine regions.
Practical implications
Collaboration and cooperation would afford Spanish natural wine access to shared resources, networks and farming technology and knowhow to enhance the image and reputation of natural wine in Spain and internationally.
Social implications
To explore how cooperative and collaborative relationships might be achieved, five case studies of natural wine producers in Spain illuminate their real-life challenges and goals. Cooperative relationships among these producers have the potential to contribute to industry growth and value creation, while creating shared competitive advantages. As these niche producers weigh how to come to a consensus about pooling resources and working together to educate the prospective natural wine consumer, doing so may well lead the next wave of entrepreneurial, innovative activity in an industry that is ripe for change.
Originality/value
To explore how natural wine producers face the challenge to increase transparency in its production and to help consumer to know what natural wine is. In the Old World, the French Fraud Control Office recognized the category “vin méthode nature” (wine nature method) as a special wine. It was the first step towards helping consumers to reduce the information asymmetries existing between the productive and consumption fields, increasing transparency in natural wines production.
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Golbou Ghassemieh, Liz Thach and Armand Gilinsky
The questions of when and what types of human resource (HR) support are needed tend to be unanswerable for small and medium-sized enterprises (SMEs). This article addresses this…
Abstract
The questions of when and what types of human resource (HR) support are needed tend to be unanswerable for small and medium-sized enterprises (SMEs). This article addresses this gap in the strategic HR literature. Hiring, training, employee retention/satisfaction, wages and benefits programs, and worker's compensation insurance are important to SMEs seeking to build strong capabilities and resources and to increase their competitive advantage.This article presents an analysis of the existing HR literature for SMEs. It introduces a decision model to help SMEs choose a cost-effective HR strategy, listing a range of options from hiring the HR function to electronic HR (eHR) and outsourcing
Armand Gilinsky, Raymond H. Lopez, James S. Gould and Robert R. Cangemi
The Beringer Wine Estates Company has been expanding its market share in the premium segment of the wine industry in the 1990's. After operating as a wholly owned subsidiary of…
Abstract
The Beringer Wine Estates Company has been expanding its market share in the premium segment of the wine industry in the 1990's. After operating as a wholly owned subsidiary of the giant Nestlé food company for almost a quarter of a century, the firm was sold in 1996 to new owners, in a leveraged buyout. For the next year and a half, management and the new owners restructured the firm and expanded through internal growth and strategic acquisitions. With a heavy debt load from the LBO, it seemed prudent for management to consider a significant rebalancing of its capital structure. By paying off a portion of its debt and enhancing the equity account, the firm would achieve greater financial flexibility which could enhance its growth rate and business options. Finally, a publicly held common stock would provide management with another “currency” to be used for enhancing its growth rate and overall corporate valuation. With the equity markets in turmoil, significant strategic decisions had to be made quickly. Should the IPO be completed, with the district possibility of a less than successful after market price performance and these implications for pursuing external growth initiatives? A variety of alternative courses of action and their implications for the financial health of the Beringer Company and the financial wealth of Beringer stockholders are integral components of this case.
Armand Gilinsky, Jr, Sandra K. Newton, Thomas S. Atkin, Cristina Santini, Alessio Cavicchi, Augusti Romeo Casas and Ruben Huertas
This purpose of this investigation is to compare the perceptions of competitive advantage through cost leadership and differentiation with sustainable practices of wineries from…
Abstract
Purpose
This purpose of this investigation is to compare the perceptions of competitive advantage through cost leadership and differentiation with sustainable practices of wineries from the USA, Italy and Spain.
Design/methodology/approach
Data are collected via self-report web-based surveys in California, Tuscany and Catalonia in 2010-2011 during a severe economic downturn in the wine industry.
Findings
Of the 260 respondents among the three country samples, over 75 per cent are family-owned and family-managed. Respondents indicate who has implemented a clear business case for an Environmental Management System (EMS) and who has not. Benefits and challenges of implementing sustainability practices are also addressed.
Practical implications
A comparable percentage of respondents across the three countries indicated a “clear business case for EMS”. Wineries in all three countries perceive that they have competitive advantage through implementation of EMS and commitment to sustainable practices. Top perceived benefits for respondents from the USA and Italy are focused on cost reduction strategies, while top perceived benefits for Spanish respondents are focused on differentiation strategies.
Originality/value
Activities that create competitive advantages for wine businesses in different countries are understudied; this research bridges that gap.
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Armand Gilinsky, Raymond H. Lopez, Cristina Santini and Robert Eyler
Researchers into entrepreneurial strategy have overlooked the impact of small vs big investments on a venture's return on investment (ROI). The purpose of this paper is to…
Abstract
Purpose
Researchers into entrepreneurial strategy have overlooked the impact of small vs big investments on a venture's return on investment (ROI). The purpose of this paper is to investigate to what extent does entrepreneurial behavior impact initial investment size and the return on that investment?
Design/methodology/approach
This investigation summarizes research into entrepreneurial leadership behavior and uses data from longitudinal case studies of four innovative start‐up wine businesses in California, India, and Italy.
Findings
Investment size and ROI appear to be related to entrepreneurial behavior.
Practical implications
Lead entrepreneurs must develop both technical competence and social networking skills to achieve small wins, i.e. early if only modest ROI.
Originality/value
This paper develops a model consisting of several testable propositions to measure the impact of entrepreneurial behavior on ROI.