Larger, older wineries are more likely to respond to environmental and economic shifts quickly and entrepreneurially compared to smaller, younger firms. However, regardless of age, size, and strategy, both types of firms share concerns for the environmental, legal, and ecological challenges, with the top three being economic cycles, laws and regulations, and climate change.
That’s the gist of a research paper, “Environmental Perceptions on Entrepreneurial Thinking in the Wine Industry,” co-authored by Dr. Armand Gilinsky, Korbel Professor of Wine Business, Dr. Robert Eyler, professor of Economics, and Dr. Sandra Newton, professor of businessIt was recently accepted for publication in the Small Enterprise Research journal.
Consistent with emerging research, the study further confirms that the wine industry shifts from market concerns to macro-economic concerns because of the maturity of the sector.
“The market to macro-economic shift is evident when we look at recent events, such as the North Coast fires, the California drought, and changes to immigration policies,” said Dr. Armand Gilinsky. “Firms’ entrepreneurial behavior or ability to respond to changing regulatory, economic, geopolitical, and other environmental conditions before competitors will affect overall performance.”
Furthermore, when faced with environmental and economic challenges, the top three management strategies wine businesses employed were to change training and skills, systems for management control and procedures, and management style. Among the top business skills leaders needed to develop to stay competitive were entrepreneurial thinking, marketing, and strategic planning.
“A key component to leadership and execution success lies in the understanding of agricultural and business environments. While smaller wineries tend to focus on marketing to compete with established firms, this study suggests that small firms can also benefit from focusing on entrepreneurial thinking in this mature industry,” said Dr. Sandra Newton.