Case Study: The Spanish Wine Industry
This scholarly article assesses the elements of competitive advantage in the Spanish wine industry. Strategy, resources, capability, and managerial ability all affect a firm's competitive advantage.
Hypotheses
Competitive strategies and business performance
Porter,
1980 and Porter and Strategy (1985) argues that the strategic choice of
the firm is the one that will determine its performance, avoiding
intermediate positions, a feeling of "stuck in the middle", that would
lead to a loss of competitive advantage. Cost leadership focuses mainly
on the production of low-cost products to satisfy price-sensitive
customers, specialization in certain
products and services, investment in reducing costs with technology and
equipment and use of distribution channels to reduce their costs. Differentiation focuses more on offering different and
unique products and services in the industry but to a wide range of
relatively price-insensitive customers,
having quality products, broad product lines, consumer service and an
efficient distribution system.
This analysis leads authors to propose the following hypotheses:
H3.1
In the wine sector, the companies that use a differentiation strategy will achieve a superior performance.
H3.2
In the wine sector, the companies with a cost-leadership strategy will achieve a superior performance.