What drives and determines competitiveness and sustainability in small to medium-sized Australian wineries?
共同研究 8125

後発国産業のグローバル化に関する研究─豪州ワイン産業のグローバル化を中心にして─What drives and determines competitiveness and sustainability insmall to medium-sized Australian wineries?
Yuka Sakurai

Introduction
Over the past 15 years the Australian wine industry has demonstrated remarkablethgrowth in overseas markets. As a result Australia is now the 4largest wine exporter inthe world, exporting more than 700 million liters annually to over 100 countries. However,this remarkable success story has not been achieved without cost. Due to the fact that
Australian wine predominantly represented entry level wines in overseas markets, it gained
an unfortunate reputation for being a cheap everyday commodity notwithstanding the beneﬁts
of greater market share and a global presence in a short period of time (Aylward & Clements
2008; Robinson, 2009; Kesmodel 2009). But as competition from wine producers in othercountries increasingly intensiﬁed, a volume-oriented approach targeting a mass market was
no longer viable as an export strategy for Australia. Instead, a more value-oriented approach,that is, creating low-volume but high-value brands through limited high-end distribution, hasbeen acknowledged as a new key strategy in the Australian wine industry while continuing
to promote high-volume products through existing distribution channels (Euromonitor
International 2005). In addition, tapping into underdeveloped wine markets, specifically in
Asia with existing products at higher price points is recognised as another eﬀective way toachieve sustainable growth (AWBC 2007). This paper intends to argue that Small to Medium
Enterprises (SMEs) are better positioned than large wine conglomerates in creating lowvolume but high-value brands through limited high-end distribution: but only if they are able
to successfully leverage ʻdistinctive capabilitiesʼ to create a competitive advantage in themarketplace.
Currently, 2,532 companies that commercially sell wines in Australia are listed in The
Australian and New Zealand Wine Industry Directory 2012. The majority (over 90%) aresmall family-owned firms that crush 500 tonnes or less of grapes per year. Therefore, it isvital to address the unique characteristics and challenges of these SMEs in order to build
a sustainable business model to ensure long-term growth of the Australian wine industry

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126both domestically and internationally. Hence, the main purpose of this paper is to explore thefollowing question: What drives and determines competitiveness and sustainability in small to
medium-sized Australian wineries. I propose to undertake this research by utilising a resourcebased view (RBV) of strategy management (see: Prahalad & Hamel, 1990, Barney 1991), in
particular, John Kayʼs (1993) ʻdistinctive capabilitiesʼ framework.
RBV has been widely used in examining the performance of ﬁrms in various industries;
however, little work has been done in examining the applicability of the framework to SMEs
in the wine industry. The wine industry by nature represents an agricultural industry withthe addition of manufacturing (winemaking), bottling, market development, and distribution.
Because of its complex nature, the wine industry requires a very long-term vision andcommitment. Identifying capabilities embedded in these enterprises and leveraging theircapabilities through cultivating and nurturing long-term relationships with both internal andexternal stakeholders will be required for a sustainable growth of the industry.
This paper has been organised into four main sections. The ﬁrst section outlines a brief
review of RBV which views ﬁrmsʼ internal resources and capabilities as determinants of anorganisationʼs performance and sustainability. The second section provides a discussion of
the methodology used in this paper. The third section compares and contrasts how three
SMEs successfully leverage their ʻdistinctive capabilitiesʼ to create a sustainable competitive
advantage. The fourth section provides discussion of findings and suggestions for future
research. This report is a part of the research project funded by the Faculty of Economics,
MeijiGakuin University. A brief review of the RBV of firmsʼ strategic management will be
provided next.

The resource-based view of firms’ strategic management
The ʻresource-based viewʼ approach gained its popularity in the early 1990s (see: Prahalad& Hamel, 1990, Barney 1991). RBV sees a ﬁrm as a bundle of resources and emphasises thatthe way these resources are combined and applied within a firm can create a ʻsustainable
competitive advantageʼ that is not easily duplicable or surpassed by its competitors. Resources
are categorised as tangible and intangible. Tangible resources include physical, financial
and human assets. Intangible resources include intellectual and/or technological resources
and reputation. Technological resources include the organisationʼs ability to innovate andthe promptness with which innovation takes place. In the knowledge-based economy, atacit knowledge that is shared and learnt by people in the organisation and is embeddedin organisational culture is increasingly viewed as an important resource of competitive

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advantage. For example, the reputation and goodwill of the organisation is a valuableorganisational resource as it takes time to build but can be easily damaged. In order for a ﬁrm
to have competencies in the marketplace, the ﬁrm needs to ﬁnd a way to eﬃciently coordinate
and organise these resources. Prahalad & Hamel (1991) use the term ʻcore competenciesʼ
to refer to the activities in which the ﬁrm can achieve a sustainable competitive advantage
whereas Kay (1993) uses the term ʻdistinctive capabilitiesʼ as the sources of the firmʼssustainable competitive advantage.
Kay (1993) views an organisation as a collection of capabilities, and argues that thesuccess of an organisation is determined by those of their capabilities that are ʻdistinctiveʼ.
Moreover, Kay points out that an outstanding organisation derives its strength from a
distinctive structure of relationships with various stakeholders such as customers, employees
and suppliers. The stability and continuity in these relationships is essential for creating socialand commercial values. ʻDistinctive capabilitiesʼ are often embedded in an organisation andtherefore cannot be easily copied or imitated by its competitors. Three important sourcesof ʻdistinctive capabilitiesʼ through which a company can achieve a sustainable competitive
advantage include: architecture, reputation, and innovation.
Architecture refers to a structure of relational contacts with its employees, customers,
suppliers and a group of collaborative ﬁrms which a ﬁrm may network with. Reputation canbe built over time through ﬁrmʼs reliable relationships such as excellent customer services andconsistency in quality of product oﬀering. Innovation in management and technology allows
an organisation to be distinctive in the marketplace; however, in order to create a sustainable
competitive advantage, a ﬁrm needs to engage in constant innovation and development that is
supported by its organisational architecture. Thus, a distinctive collection of both internal and

Reputation
Distinctive
capabilities

Innovation

Architute

Figure 1: Distinctive capabilities of strategy (adapted from Walters 2003)

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128external relationships that are developed and nurtured for a long period of time would help
ﬁrms to achieve a competitive advantage (see Figure1 below).
As mentioned earlier, the wine industry largely represents an agricultural industry innature and thereby requires a very long-term vision and commitment. For organisations
that belong to such an industry, the stability and continuity in relationships with internal andexternal stakeholders is hypothesised to be essential for creating added values. Thus, Kayʼsframework of ʻdistinctive capabilitiesʼ of strategy is employed in this study to explore drivers
and determiners of competitiveness and sustainability of small to medium-sized Australianwine producers. In the following section, the methodology employed in this study will bearticulated and discussed.

Methodology
The interviews were undertaken as follows: 1) in Victoria interviews were conducted at,four wineries in Bendigo and one winery in the King Valley region, between the 13th and 16thof August 2011; and 2) in Queensland interviews were conducted at two wineries in the Granite
Belt Region, between the 29th of March and 3rd of April 2012. The cases were selected fromThe Australian and New Zealand Wine Industry Directory 2011. Due to the significant
diﬃculty encountered in identifying appropriate and willing respondents and the widespreadlocation of selected cases, only a limited number of wineries were able to be identified
within the Australian wine industry. Finding willing respondents was time consuming as
in many cases interviews were only agreed to if a positive referral was given from anotherwine producer. As a result of this process, the investigator has learnt the importance ofspending a considerable amount of time building trust with each respondent in a closely-knit
wine community. One limitation of this research involves a small number of cases with an
exploratory focus; however, ﬁndings will provide some insight into the sources of a competitive
advantage pertaining to small and medium sized wineries that may have been overlooked.
In each case, semi-structured, in-depth interviews (recorded) were conducted with themarketing and/or management decision makers to identify an understanding of the pertinent
research issues. Due to their in-depth nature, each of the interviews can be classified as asingle case study (Yin, 2003). The investigator travelled to conduct interviews with them.
Upon the completion of the interview, the investigator asked the interviewees to ﬁll in aquestionnaire containing questions concerning 1) what they perceived as strengths of the ﬁrm,2) what they perceived as key success factors and 3) the anticipated factors for future success.
In this paper, three companies were selected that demonstrate unique characteristics inWhat drives and determines competitiveness and sustainability in small to medium-sized Australian wineries?

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terms of how they leverage their ʻdistinctive capabilitiesʼ to achieve a sustainable competitive
advantage. All three companies are family-owned; however they are diﬀerent in size and scaleof production. The information was supplemented by publically available resources including
industry reports and company websites. In the following section, three cases are presented
with ﬁndings concerning ʻdistinctive capabilitiesʼ that create a competitive advantage for eachﬁrm.

Findings
Case 1: Alpha
Alpha was established in 1889 in Victoria. It is one of the oldest, family-owned wineries inAustralia prospering over ﬁve generations. The ﬁrm sources grapes from its own vineyards
that are located within a 50km radius of the headquarters and also from recently acquired
vineyards in Tasmania. This enables the ﬁrm to oﬀer a wide range of products in terms ofvarieties and wine styles to both domestic and international markets. Wines are exported
to over 30 countries in which the largest markets are the UK and New Zealand. The firm
employs over 300 people and produces more than 1 million cases annually.

1-1: Reputation-Brand sovereignty as a family heritage
The firm places great importance on its family heritage and traditions that are deeprooted in its organisational culture and sees them as a source of the firmʼs ʻdistinctive
capabilitiesʼ. This can be illustrated by the following statement from the marketing manager:“The important thing is there has been no change to the vision of the company,
what we stand for, how we operate and culture [over the years]. The culture of thecompany is really the culture of the [founding] family and there is no difference
between [our] brand and the family. The brand and the family really have the samevalues- very unpretentious, very innovative”.
The founder incorporated its family name into a company name, which has been passed on
through generations along with their family values for over 100 years. This demonstrates thatthe founding family members take great pride in their business and their product oﬀering. The
strong identiﬁcation of family heritage with its brand was reinforced in 2003 when the ﬁrm
released a new ﬂagship range of super-premium wines that were named after the winemakerʼswife of an earlier generation. Thus, for Alpha, family heritage plays an essential role in creatingand embracing a distinctive corporate and brand sovereignty which is continuously being
expressed in organisational practices. This is one of their ʻdistinctive capabilitiesʼ which cannot

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be easily transferred or imitated by other ﬁrms.

1-2: Leveraging reputation through internal relationships
While the family heritage is greatly valued, Alpha makes sure that non-family memberswith expertise and knowledge in certain areas are brought into the company and gets them
involved in decision-making in order to be ﬂexible and innovative. At the same time, the ﬁrm
is very clear in communicating its vision and goals to all employees. As stressed by the ﬁrmʼsexecutive director, a loyal and engaged workforce is regarded as one of the most importantcharacteristics of the ﬁrmʼs competencies. Thus, tacit organisational knowledge that is sharedby a loyal and engaged workforce creates a distinctive value in Alpha.

1-3: Leveraging reputation through cellar door experience
Cellar door experience is seen as an eﬀective way for the promotion and sales of highvalue brands through limited high-end distribution. In Victoria, 75.5% of all wineries have acellar door facility (The Australian New Zealand Wine Industry Directory 2012). The beneﬁts
of having cellar door sales include: distribution at a low marginal cost, the development ofbrand equity, and a chance to add value to their product by sharing a ʻstoryʼ with theircustomers about the uniqueness and qualities inherent in each wine.
Alpha strongly believes that a ﬁrm can build customer loyalty and enhance its reputation
through cellar door sales as illustrated by the following quote:“The best way to sell your product is the principle of the cellar door, face to face, glassin the hand, get your potential customers to taste, understand and hear the story.
.what has to be done is to take the cellar door across the nation and then across theworld” (quoted in Dunstan, 1999, p.174).

At Alpha, customers are provided an opportunity to explore new wine varieties and styles
including limited release of new varieties, experimental batches and optimum aged wines thatare only available at the cellar door. The question that arises is: How can the winery tell thestory to international customers who are unable or unlikely to visit its cellar door? One way
to do this is by organising a number of tasting events which include participating in food andwine markets and then persuading repeated customers who come to the events or markets totastetheir wines on a regular basis. Another way being suggested by the marketing manager
is the eﬀective use of a website that “tells everything about the family, the vineyards and thelatest vintages available” (in Dunstan, 1999, p.175). Wine club membership of Alpha is currently
only available to Australian residents; however, it is another eﬀective way to promote highvalue brands through a loyal customer base.

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1-4: Leveraging reputation through industry leadership and networking
Alpha is highly respected in the wine community and was complimented by a number ofpeople encountered during the interview processes. They constantly provided complimentarycomments on the founding family about their personalities and contributions to the community.
In fact, several people used the term ʻunpretentiousʼ in describing the family which is alsoa core corporate value of Alpha. Clearly, Alpha has attained its reputation in the community
through developing dedicated relationships with other wineries and industry leadership.
Alpha is an active member of Australiaʼs First Families of Wine, that is, an alliance of 12
multi-generation family-owned wineries, with a long history, having committed to export andenvironmental best-practice and producing iconic wines. The alliance members are active
promoters of raising the proﬁle of Australian wine in the international arena; showcasing a
representative of Australiaʼs premium and super premium wines; and highlighting the qualityand diversity of Australian wine. Thus, the firm sees that networking with other firms in
the industry is a valuable way of raising the firmʼs reputation as well as the reputation ofAustralian wines. Being a member of the alliance also enables the firm to exercise strong
market inﬂuence.

1-5: Innovation within a traditional organisation
Whereas Alpha is identiﬁed with its family heritage and history, it is also acknowledged
for having an innovative spirit. The firm has been at the forefront of experimenting with
diﬀerent grape varieties and winemaking processes. A good example of this is the opening ofan experimental mini-winery in 1989 where winemakers could experiment with new grape
varieties and wine styles and conduct research on viticulture and winemaking practices. A
wide range of varieties available as a result of innovation provide Alpha a competitive edge inexport markets; because it allows Alpha to cater products for diﬀerent tastes and preferences.
Alpha is continuously inspired to be innovative in viticulture and winemaking and innovation
itself is cultivated within the organisation. Alpha has tradition, but it does not behave as a
traditional company which makes Alpha distinctive.

Case2: Beta
Beta is the oldest family-owned winery in Queensland and was established in 1930. Of
the 64 wine regions in Australia, Queensland has only two, one of which is the Granite Belt
region where the winery is located. The winery was originally established by Italian migrants
who came to settle in the region in the early 1900ʼs as the place was suitable for growing
grapes and stone fruits which the Italians were renowned for. Given that around a half of研 究 所 年 報132

the population in the region is of Italian descent, the winery and the surrounding region still
display distinct Italian characteristics, for example providing authentic Italian food, quality
wines and even hosting an opera event. Currently the third generation of the founding familyis actively involved in management of the winery where 11 people are employed. The winery
crushes around 350 tonnes of grapes and produces between 10,000 and 19,999 cases. Beta isexporting to Taiwan.

2-1: Reputation- Brand integrity blending regional flavor with family history
Beta places a very strong emphasis on brand identity and good will, and traditional
products. Given that the winery is a small boutique winery it focuses on producing wines that
represent the ﬂavor of the region blending this with the history of their four generations. Thevines are carefully grown and managed by the second generation of the founder who is very
enthusiastic about viticulture and winemaking. According to the client relations and marketing
manager, what they value the most is the productsʼ integrity which has a strong linkage withthe family and region as is illustrated by the statement below:“We only use grapes from our vineyards, which makes us so special. [this] gives

you the product integrity. Thatʼs what we work on and people appreciate the factthat they can come here and know that our wines are all made here and our grapes
are all grown here”.
The client relations and marketing manager points out that as a small family-owned
winery, Beta offers not only a good quality product, but it also offers added value to the
products as seen from the statement below:“It is important for any small wineries to have stories to share. For big companies,
it is all about prices and the bottom line. We cannot compete with that. For the priceour customers pay for our products, they are getting our story, our services, andmore from us. Wine is not a commodity. Our wine is more important to us thanselling it for the cheapest price we can. It comes with a lot more than that”.
Thus, Betaʼs Italian heritage and the strong attachment to the region and community is a
ʻdistinctive capabilityʼ that is very diﬃcult to copy. Whereas Beta is open to every opportunity
coming along, it is not willing to compromise the quality and/or lower the prices of the
products for the sake of a new market entry.

2-2: Leveraging internal relationships- a tight knit small family firm
The interviewee stressed that being a small family-owned firm itself is a competitive
advantage in the wine industry. This is because the nature of the industry is, “just so family-What drives and determines competitiveness and sustainability in small to medium-sized Australian wineries?

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oriented, or it has a potential to be. If youʼve got children who want to carry on, it has somuch scope as a business”. Again, it is the nature of the industry which requires a long-term
commitment and vision which will be relatively easy to manage as a family.

2-3: Leveraging reputation through face-to-face interaction
According to the client relations and marketing manager, the sales generated through its
cellar door and wine club accounted for around 80% of the total sales. Betaʼs cellar door has avery friendly and warm atmosphere which makes customers feel as if they were a part of the
BIG Beta family. Similar to Alpha, Beta places great emphasis on developing loyal and ongoingcustomers through face-to-face interaction. Beta is actively taking the cellar door experience
within and around Queensland by oﬀering tastings during Queensland events (such as homeshows) to customers who might then be encouraged to visit the cellar door and become loyal
customers.

2-4: Leveraging reputation through external relationships
The winery believes that the ﬁrmʼs strength is derived from a good relationship with local
communities. In fact, the winery is very active in promoting the wine industry and the region
by organising events that attract a large number of tourists and encouraging them to return. It
is also actively involved with local and regional wine and tourism committees. By using theseexternal channels, the ﬁrm is creating market inﬂuence and acceptance and building good willin the local community. Additionally, the ﬁrm changed its name in 1980s with a reference tothe region which demonstrated to the local community the ﬁrmʼs strong regional commitment.
Currently, the ﬁrm has only one importer in Taiwan with whom it has cultivated a good
and trusting relationship over the past 10 years. Whilst the winery is open to new market
opportunities, they are happy to wait until they ﬁnd another customer (importer) who truly
appreciates and values what Beta offers. According to the client relations and marketing
manager, being a smaller, family-oriented winery itself is a ʻdistinctive capabilityʼ which canbe transferred into a competitive advantage given that it enables the firm to have greater
ﬂexibility and promptness in responding to customersʼ needs and to provide better services
to them both internationally and domestically. Thus, a continuous relationship with external
stakeholders is a key to building a solid reputation for Beta.

2-5: Innovation through tapping into the tourism sector
The owner and winemaker of Beta is willing to experiment with new varieties that aresuited to regional conditions. However, as previously stated they are proud of their traditions

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134and authenticity in winemaking. Therefore, innovation in the Beta winery is not so much about
the winemaking process or investing in new technology but more about the firmʼs ability
to strategically identify itself as a part of the tourism cluster. The winery has been very
successful in this regard and has won the Queensland tourism awards ﬁve times out of the six
times they entered. The client relations and marketing manager stated that:“We are not in it for the glory of being a winery but we are in it for the business ofmaking money for our family and to make tourists happy, and to give them a goodtime as an attraction. [Being a winery] is not just about winning medals and being
on certain lists”.
Beta in fact has a number of award winning wines yet, the above statement summarises
the fundamental value that is shared within the family and with their customers. Beta hosts
events to attract large numbers of people to the region including an opera in the vineyard
and charity dinners that help enhance the local profile. Moreover, Beta is very aware thatbeing represented on tourism committees for the region and developing and maintaining good
relationships with journalists will enhance their reputation.
The ﬁrmʼs website, states that “Beta is a winery for ALL tourists”. The winery (and thesurrounding region) attracts intra-state customers as a weekend getaway as well as capturing
interstate and independent international travelers who are travelling around Australia incamper vans. The client relations and marketing manager at Beta did not hesitate to say:
“Because we are so tourism-oriented, I guess that is what we focus on and how wepromote and market our business is to tourists”.
Thus, Betaʼs reputation is leveraged through continuous relationships with the local
community and the broader community beyond the region.

Case 3: Delta
Delta is the largest winery in Queensland and is renowned for its successful businessmodel since its establishment in 2000. It combines a winery, vineyard and an award winningrestaurant. Delta also oﬀers tours, wine tastings, cellar door wine sales, weddings and corporate
functions. Delta employs around 60 full-time staﬀ and 70 part-time staﬀ. It is privately owned
by a single family who are involved in a diversified range of businesses including property
development and data processing as well as managing the winery. In terms of tonnes of grapes
crushed annually, Deltaʼs capacity ranges between 1,000 and 2,499 which come from their own
three vineyards. Delta demonstrates quite diﬀerent characteristics from the ﬁrst two cases andis successfully tapping into a niche premier market overseas including China and Japan.

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3-1: Reputation gained through winning medals
Given that Delta is a relatively young winery, it lacks the story that compliments and/or reinforces the products it oﬀers. Unlike Beta, Delta is keen on enhancing its domestic andinternational reputation by winning medals. As the marketing manager explains:“In terms of the wine itself, we use a very traditional wine making method, but
mixed with new technology that produces the greatest consistency in quality andgreat products”.
His statement was substantiated by the fact that the winery had received over 620
national and international medals by 2012. This, in part, assisted them with entering into apremier market in Japan and establishing a partnership with a major Chinese distributor. Delta
uses multiple strategies in cultivating customer relations to enhance its reputation. A moredetailed explanation of these strategies is outlined below.
Delta describes their core competences as the firmʼs long-term relationships with its
business partner and seeking and embracing new business ideas and business methods. It
places relatively less emphasis on traditional products given that the ﬁrm is relatively new tothe industry.

3-2: Leveraging reputation through wine education
Delta believes that providing consumer education at the point of sales creates a distinctive
advantage. Delta employs Japanese and Chinese speaking nationals residing in Australia andplaces them at duty free shops, as well as its own cellar door to interact with customers.
Internationally, Delta is sending their winemakers to key inﬂuential outlets and restaurants
to conduct a series of wine education programmes through food and wine matching. This
programme has been implemented in China, where the wine market is expanding yet
undeveloped. By utilising these strategies, Delta can eﬀectively leverage its reputation throughcustomer relations. Delta also uses its website as a tool to educate its customers and provide
detailed information about the winemaking process.

3-3: Leveraging reputation through external relations
Similar to Beta, Delta recognises the importance of tapping into the tourism cluster. But it
uses a quite diﬀerent strategy from Beta with greater international focus. Delta has employed
the following strategy to tap into the Japanese market: 1) Developing a good relationshipwith Duty Free Shops targeting Japanese tourists coming to Australia; 2) Setting up its own
warehouses in Japan for home-delivery services; 3) Employing Japanese nationals residing inAustralia to educate Japanese travelers about their wines at the point of sale (both at DFOs

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and cellar door); 3) Cultivating a good partnership with a Japanese importer/distributor
through the existing relationships with the local Japanese staff; 5) Moving the logistics andhome-delivery services to the Japanese partner: 6) Seeking and creating more direct market
opportunities, i.e. establishing a wine club with the partner by combining its own customer
database with that of the partnerʼs.
As illustrated above, finding unique routes to market a product that are not clutteredwith competitors and then cultivating them through the ﬁrmʼs long-term relationships withits business partner translate their resources into ʻdistinctive capabilitiesʼ. By building andcombining customer databases from Australian and from Japan, Delta can educate members
about: “what Delta can do, what Delta can offer, what is unique about Deltaʼs product offering
and what put Delta in line with French wines etc” (the marketing manager).

3-4: Innovation in eco-friendly wine production
Delta uses state of art technology to produce consistent quality of product. It also
invests in the latest technologies and innovations to achieve environmentally sustainablewine production including energy conservation, waste recycling and minimising water usage.
For example, it is experimenting with low carbon bottling materials such as PET (recyclable
plastics) as an alternative to glass. One of Deltaʼs key successes, as noted on their website,
has been their ability to signiﬁcantly reduce dependence on mains water. This is an importantachievement since water shortage is a major challenge in an arid country like Australia. Deltaʼsleadership in addressing and overcoming these challenges deﬁnitely enhances its proﬁle.

Discussion and conclusion
This paper has sought to examine and analyse; what drives and determines
competitiveness and sustainability in small to medium-sized Australian wineries. To conduct
this analysis three Australian small to medium-sized wineries demonstrating ʻdistinctive
capabilitiesʼ were examined using the Kayʼs framework. By analysing the three different
wineries it has been possible to identify the unique firm-specific capabilities or ʻdistinctive
capabilitiesʼ embedded in each enterprise. The analysis has also shown how these ʻdistinctive
capabilitiesʼ have been leveraged by each of the three wineries to create a competitive
advantage in the marketplace.
Though the vision and core values of each winery may vary; they each ensure that theirunique set of ʻdistinctive capabilitiesʼ is leveraged through cultivating and nurturing longterm relationships with both internal and external stakeholders. Alpha has achieved thisWhat drives and determines competitiveness and sustainability in small to medium-sized Australian wineries?

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leveraging by accentuating its core value of ʻfamily heritageʼ with innovation in winemaking
and production. The core value and vision prospering over five generations that is deeply
embedded in the organisational culture is shared with every member of the organisation, itscustomers, and the wine community. Alpha demonstrates strong leadership in raising the
proﬁle of Australian wines by leveraging its ʻfamily heritageʼ. Beta has achieved it leveraging
by combining its family heritage with wine tourism. Betaʼs active involvement in wine
tourism enables it to create market influence and build good will in the local community.
Delta has achieved this leveraging by combining marketing and technological innovation inwine production. Although Delta is a relatively young ﬁrm, it is aware of the importance ofcultivating and nurturing internal and external long-term relationships. Delta has sought toachieve this through customer relations, consumer education and an on-going partnershipwith a Japanese distributor. Sharing the core values and establishing trust with international
partners is an important factor to achieve a sustainable competitive advantage.
A sustainable competitive advantage is also achieved by establishing trust and sharing
core values with customers. In all three cases this paper has shown that cellar door and quasi
cellar door experience is a good way to develop a firmʼs reputation through close contacts
with their customers. This is where family-owned wineries have an advantage over wine
conglomerates because at the cellar door, winery employees can share their tacit knowledge
and add value to the product. Multi-generation family ﬁrms naturally possess a capability thatis unique; however as demonstrated by the three cases, it needs to be integrated into othercapabilities to make it become distinctive.
Another way of improving the proﬁle of smaller Australian wineries in the market place isby establishing linkages with another industry sector, such as tourism. This is exempliﬁed by
the two cases from Queensland. The Queensland government has also recognised the economic
benefit arising from wine tourism, and set up a state-of-the-art $8.5 million education andtraining facility in the heart of the Queensland wine region. Queensland wineries such as Betaand Delta exploit this opportunity by using wine-tourism as a platform for their market entry
strategies.
Due to the rapidly changing nature of market conditions in the Australian wine industry,
the question of how each firm utilises its capabilities in facilitating market entry andsustainable growth is increasingly important. Tapping into underdeveloped wine markets,
speciﬁcally in Asia is recognised as an eﬀective way to achieve sustainable growth. To raise
the proﬁle of and expand wine exports from smaller Australian wineries to the Asian market,
further study is required to help determine: a) How smaller wineries can bypass wholesalers
and linkup directly with international partners who understand their core values and work

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collaboratively to achieve sustainable success in export: b) How small to medium sized
Australian wineries can convey their brand identity effectively to international customers
particularly those in East Asian countries like Japan, South Korea, China and Taiwan where
English is not commonly spoken: c) How small Australian wineries can market their wines to aniche market of select customers who appreciate the value of boutique Australian wines. This
study would ideally be conducted in collaboration with family owned wineries from multiple
wine regions and aim to develop effective strategies to improve sustainable competitive
advantage and map out possible future opportunities in Asia for the Australia wine industry.
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Acknowledgement
We would like to thank a number of people who share insightful knowledge of wine
business and passion for winemaking through interview process (names are not to be
identiﬁed).
Special thanks are given to Dr. Rumintha Wickramasekera for his contributions tocoordinating and assisting the interviews.
This research project is funded by the Faculty of Economics, MeijiGakuin University.

1930

2000

Beta

Delta

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70 (P)

60 (f)

3 (P*)

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1,000-2,499

250-499

10,000-19,999

crushedemployees
320 (FE*)

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Appendix A:

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What drives and determines competitiveness and sustainability in small to medium-sized Australian wineries?
139