THE RELATIONSHIP BETWEEN WINE SECTOR AND REGIONAL COMPETITIVENESS
Prof. Milena Viassone
Aggregate Professor of Business Management, Department of Management
School of Management and Economics University of Turin
C.so Unione Sovietica, 218/bis 10134 Turin, Italy
E-mail: milena.viassone@unito.it Fax: +390116708301
Prof. Demetris Vrontis (Correspondence Author)
Professor of Marketing, Department of Marketing School of Business University of Nicosia
46 Makedonitissas Avenue, PO Box 24005, 1700 Nicosia, Cyprus
Email: vrontis.d@unic.ac.cy Fax: + 357 22 355116
Prof. Ioanna Papasolomou
Professor of Marketing
Head, Department of Marketing School of Business
University of Nicosia
46 Makedonitissas Avenue, PO Box 24005 1700 Nicosia, Cyprus
E-mail: papasolomou.i@unic.ac.cy Fax: +357 22 357481
Abstract
Despite the large literature on wine sector and regional competitiveness and their measures, scarce contributions test the existence of a correlation between them. This paper bridges this gap by identifying drivers of sector and regional competitiveness, creating two global indices able to measure them and examining the level of their relationship. The analysis examines the correlation between the Regional Competitiveness Index (RCI) and the Wine Sector Competitiveness Index (WSCI), developed by using the
Delphi methodology. Data was provided through semi-structured interviews with 40 stakeholders of different provenance. The research findings demonstrate that RCI is affected by ten dimensions and WSCI by four dimensions whilst there is a positive correlation between them. The paper provides a list of recommendations in terms of designing, implementing competitive and differentiation strategies aimed at: adopting contemporary marketing communication practices, as well as developing customer loyalty and positive consumer attitudes towards the consumption of premium wine.
Keywords: wine business; wine sector competitiveness; regional
competitiveness; relationship; RCI; regional competitiveness index; WSCI; wine sector competitiveness index; Delphi methodology; measure of competitiveness; semi-structured interviews; positive correlation; differentiation strategies; premium wine; global business and economics review.
Biographical notes:
Milena Viassone is an Aggregate Professor in Business
Management-University of Turin; Member of the Aidea (Italian Academy of Business Administration) Research Group (GSA) on the topic “Management for the sustainability of touristic development and the destinations competitiveness”; Member of EuroMed International Group of Research on “Tourism”; Member of the International ESCP Europe Group of Research on “International Development”. Member of the Editorial Board of the Universal Journal of Management and of the Journal of Communications and Information Sciences. Main Research Areas: International Business Finance, Mergers and Acquisitions, Management of Tourist Destinations.
Demetris Vrontis is a Professor of Marketing, Dean and Director at the
University of Nicosia in Cyprus (EU). Professor Vrontis is the Editor-in-Chief of the EuroMed Journal of Business (EMJB) and the President of the EuroMed Research Business Institute (EMRBI). His prime research interests are in strategic marketing planning, branding and marketing communications; areas in which he has widely published in over 100 refereed journals and 18 books and gave numerous presentations in conferences around the globe. Professor Vrontis is a Fellow Member and certified Chartered Marketer of the Chartered Institute of Marketing and a Chartered Business and Chartered Marketing Consultant certified by the Chartered Association of Business Administrators. Professor Vrontis also
serves as a consultant and member of Board of Directors to a number of international companies.
Ioanna Papasolomou is a Professor of Marketing and the Head of the
Department of Marketing, School of Business Administration, at the University of Nicosia in Cyprus. Prof. Papasolomou has contributed papers to a number of international conferences and journals such as the Journal of Marketing Management, Marketing Intelligence and Planning, Journal of Brand Management, Journal of Product and Brand Management, and the Journal of Marketing Communications. She has also contributed chapters and case studies to several academic books. She is a reviewer for a number of academic journals such as the International Journal of Bank Marketing, Journal of Marketing Communications, International Journal of Corporate Communications, International Journal of Social Responsibility, and Euro Mediterranean Journal in Business. This article is a revised and expanded version of a paper entitled “When wine meets territory: the Italian scenario” presented at the 6th Annual EuroMed Conference of the EuroMed Academy of Business, Estoril, 23rd-24th September 2013.
Acknowledgments:
An acknowledgement goes to Stefano Grippiolo for his help in the collection of the data.
1 Introduction
Over the last decade, the wine industry has been affected by several changes that have transformed the way wine firms compete. The global wine industry is expected to generate almost $292 billion in 2014. At that point market volume should exceed 22.1 billion liters, representing a near 3.5% increase in five years (MarketLine, 2013). The challenges character-izing wine sector are particularly important in the European Union, the world’s leader in wine production, with almost half of the global vine-growing area and about 60 percent of production by volume. In this sce-nario Italy, France, and Spain are the largest EU wine producing countries, representing 80 percent of total output (European Union, 2013).
In these countries, and in particular in Italy, the wine and wine tourism sector are strongly affected by environmental and cultural factors (Mora and Moscarola, 2012; Tardivo et al., 2011). In 2011-2012, despite the un-favourable economic climate in Italy the wine tourism had grown by 12%. Sustaining this upward trend is challenging and consequently a national
strategy should be developed and implemented. With its 42 millions of hl of wine production in 2011, Italy is the major European wine producer de-spite the fact that its wine production has decreased in the last four years by 10%. In particular, the export of Italian wine has reached 5 billions of euros resulting from a 9% increase in the first seven months of 2013. At the same time the volume of exports is decreased by 3% . These changes highlight that even though there is a decrease in volume there has been an increase in value (Scarci, 2013). Italy has always been focused on the quality of its wine, which is in essence its competitive advantage. It has been widely argued that wine and regional sector competitiveness are cru-cial considerations for the wine industry.
Consequently, there is a great need to study the drivers that affect both wine sector competitiveness and regional attractiveness (Gardiner et al., 2004; Carlsen, 1999; Hall and Sharples, 2008; Viassone and Casalegno, 2011). Despite the widely accepted need for identifying the key drivers for both regional (Lin and Liu, 2012; Dijkstra et al., 2011; Saxenian, 2007) and wine sector competitiveness (Jaffe and Nebenzahl, 2008; Viana and Xavier, 2005; Zanni, 2004), there is a gap in the literature regarding the appropriate tools for measuring it. Several studies have emphasized the strong relationship between wine and territory (Vrontis et al., 2011; Viassone, 2011; Jaffe and Nebenzahl, 2008), but there are no studies yet that have attempted to measure this relationship. In order to bridge this gap, this research aims to present and examine, by using the Delphi methodology and a statistical analysis, a measure model which can be used to assess both regional and wine sector competitiveness as well as verifying the existence of a correlation between the two indices. This paper is structured in five sections: (a) a review of the existent literature on measuring regional and wine sector competitiveness; (b) a description and explanation of the research model; (c) an analysis of the results by applying regional and wine sector competitiveness indices in an Italian context; (d) an examination of the research findings and (e) a discussion of the study’s conclusions, limitations and directions for future research.
2 Literature review
2.1 Regional and wine sector competitiveness
Regional and wine sector competitiveness have been widely debated by politicians and policy makers as well as by academics. The debate is largely due to the plethora of different definitions existent in the literature regarding the concept. In 1999, the EC defined it as “the ability of companies, industries, regions, nations and supra-national regions to generate relatively high incomes and employment levels”. Storper (1997),
p. 20 describes regional competitiveness as: “the capability of a region of attracting and keeping firms with stable or increasing market shares in an activity, while maintaining stable or increasing standards of living for those who participate in it”. More recently, Dijkstra et al., (2011), p. 4 defined it as: “the ability to offer an attractive and sustainable environment for firms and residents to live and work”.
The key drivers for regional competitiveness are the following: (1) economic variables (Porter, 2003); (2) demographic variables such as population size, composition, distribution and growth (Poot, 2007; Vermeulen, 2004); (3) entrepreneurial variables (Bondonio and Greenbaum, 2014) such as creativity and innovation (Cepollaro et al., 2006); (4) internationalization variables such as import-export, FDI, takings/payments of the technological balance (Cotta Ramusino and Onetti, 2006); (5) infrastructural variables (Rohm et al., 2004) and (6) green areas, agricultural, craft and tourism variables (Franch et al., 2008; Pilotti et al., 2011) contributing to economic growth and local employment (Viassone and Casalegno, 2011). In relation to sectorial competitiveness, the Organisation of Economic Co-operation and Development (OECD, 1996) gives a definition for competitiveness: “the ability of companies, industries, regions, nations and supranational regions to generate relatively high factor income and factor employment levels on a sustainable basis, while being and remaining exposed to international competition.” With reference to the sector (in this case “wine sector”), industries and firms are competitive when they are able to continue to grow their trade in today’s global environment, through product offers – qualities, prices and services - that are as good as (or better than) those of their competitors (Van Rooyen et al., 2011). In addition, several authors, for example Zanni (2004) propose the following drivers, as those that determine wine competitiveness:
Quality: nowadays wine is considered both a symbol of quality and a modern approach to consumption able to combine the pleasure in savouring taste and quality (Bailet et al., 2012). Similarly, quality determines the product’s reputation highlighted by CDO (Con-trolled Designation of Origin) and CGDO (Con(Con-trolled and Guaran-teed Designation of Origin) denominations (Viassone, 2012). Prod-uct quality improvement and prodProd-uct integrity have also been iden-tified by Rooyen et al., (2010) as one of the main drivers of the South Africa wine industry. In particular, in time of crisis, pre-mium wines seem to be those less affected by it. For this the mar-ket for premium wine grapes should be distinct from that for the lower prices grapes and the demand for the former will continue to expand rapidly. In particular, industry practice and price move-ments suggest that wine demand should be segmented by quality,
often associated with where the grapes are produced.
Distinctive characteristics: these are determined by the peculiarities of the wine production system, like the total area planted with grapes, the total regional wine production, the number of social wine cellar (Viassone, 2012). Furthermore, it is also important to have a distinctive type of wine which can enhance the reputation of a wine region (Easingwood, 2006).
Fame and reputation: can be considered as a dynamic signal of qual-ity (MacDonald et al., 2013) for the collective denomination of ori-gin; moreover, they are strictly related to quality. Gergaud and Li-vat (2004) defined collective reputation as the simple addition of the “most famous” reputation among the producers of a PDO (Pro-tected Designation of Origin). A suitable indicator in order to mea-sure reputation could be expressed by the awards received by a particular firm or territory (Bailet et al., 2012). Reputation may be based in part on the region, the vintner, or recommendations of wine experts (Gibbs et al., 2009). A study carried out in 2012 by Rossi et al., emphasizes how in the Italian context the single most important characteristic of successful wine firms (with regard to Campania) lies in their marketing approach and specifically in their ability to understand market trends and consumer behavioral patterns. In particular reputation and wine ratings are particularly important for less experienced buyers, who know less about spe-cific regions, vintners, vintages, etc. For this motivation reputation in the wine market represents a very interesting field to explore in the next years (Gibbs et al., 2009).
Technological innovation: is regarded as critical in the wine busi-ness (Vrontis and Thrassou, 2011). The ability of a country wine sector to compete in global markets depends on the country’s com-parative advantage in wine which changes over time at a rate that depends, among other things, on own -versus other - country tech-nological and institutional innovations (Abramovitz, 1986; Cus-mano et al., 2011). Knowledge and innovation can develop faster in regions with a certain specialization - like wine - because the visibility of the production of innovators is significant and imita-tion of technology is easier (Kunc and Bas, 2009). Increasingly the wine industry is characterized by sophisticated technologies such as the use of microchips to identify a bottle of wine – RFID (Radio Frequency Identification) technology, besides the use of internet websites by producers and by cellars.
Investments that PMI may receive from OCM (Common Market Organization): the driver has the potential to supply this sector
with the necessary resources for growth and development. 2.2 The measure of regional and wine sector competitiveness
Viassone (2009) provided a detailed analysis of the measurement of regional competitiveness based on different partial indices, some of which are based on particular aspects such as knowledge/innovation (i.e. The World Knowledge Competitiveness Index and the creativity index, Massachusetts Technology Collaborative’ s etc.). Some of these indexes are built for specific areas. For example, the Community Support Framework (CSF) 2000-2006 developed for Southern Italian Regions; the Milken Institute’s New Economic Index developed for the US; the Regional Competitiveness Index designed for Croatia; the UK Competitiveness Index created for the United Kingdom; and Viassone’s (2009) composite provincial index which, via macro categories of factors, reflects the weight of competitive drivers for each province of Piemonte. Another recent attempt to develop a regional competitiveness measure has been made by Dijkstra et al., (2011), who propose the EU Regional Competitiveness Index (RCI), the first composite indicator which provides a synthetic picture of territorial competitiveness for each of the NUTS 2 regions of the 27 EU Member States. There is also a need to develop a global index for wine competitiveness. The existing literature revealed a gap in terms of the existence of an appropriate measurement model for assessing wine sector competitiveness. The Revealed Trade Advantage (RTA) method developed for the first time by Balassa (1989) and, successively, extended by Vollrath (1991), Castiglione (1999), Van Rooyen et al., (2000), Valentine and Krasnik (2000), Pitts et al., (2001), and Esterhuizen (2005) was used to measure quantitatively the extent to which the different wine industries compete internationally. These studies have indicated that the operational trading performance of a product/firm/country, if compared with that of its competitors, is determined by the RTA. This can be measured by the trading performance of individual firms, commodities, industry chains and countries; in this way, it allows for the measurement of competitiveness under real world conditions; this method has been used for the measurement of the competitive performance of the South African wine industry - the Wine Competitiveness Index (WCI) by Esterhuizen and Van Rooyen (2006). More recently, Notta and Vlachvei (2011), following Fischer‘s (2007) approach, defined competitiveness as a function of profitability, efficiency, productivity, and growth and proceeded to develop a comprehensive measure for relative and multidimensional economic performance. Furthermore, Remaud (2006) claims that the availability of staff with sufficient knowledge, expertise and skills in exporting, their
ability to search for new export opportunities and the entrepreneurial attitude of the CEO (Chief Executive Officer) enable wine companies to be more competitive in its export markets.
3 Research framework
Increasing worldwide competition has a strong impact on territory which turns out to be an important factor for the development of the different regional economies. Peculiarities of a territory need a competitive analysis at a level between “macro” (nation competitiveness) and “micro (urban level). An analysis of the middle level, involving the sector or, in territorial terms, regions, is necessary in order to ease the formulation of replies to the pressures coming from the international context. This paper aims to develop two different descriptive and prescriptive models, for the measurement of regional and sectorial competitiveness, and to examine the relationship between them.
In particular, given the increasing importance assumed by the Regional Competitive Index (RCI) (Dijkstra et al., 2011; Pilotti, 2011; Poot, 2007) and Wine Sector Competitiveness Index (WSCI) (Viassone, 2012; Van Rooyen et al., 2011; Vrontis et al., 2010; Zanni, 2004), this paper has four research questions:
Q1: Which are the drivers affecting regional and wine sector competitiveness?
Although the measurement of regional and sectorial competitiveness is challenging, this paper aims at creating two global indices able to measure both regional and wine sector competitiveness. These indices correspond to the sum of different sub-indices that express the weight assumed by the different drivers affecting the respective competitive advantages. Hence, two additional research questions have been formulated:
Q2: How can the RCI be structured? Q3: How can the WCI be built?
These are seen as a prerequisite in examining the last research question:
Q4: Is there a correlation between regional and wine sector competitiveness?
4 Methodological approach
In order to examine these research questions, the Delphi method (Dalkey, 1969) has been adopted. This is an iterative process that allowed 40
stakeholders in different Italian regions, who were interviewed between December 2012 and February 2013, to validate the framework on the basis of three criteria: relevance, accessibility and transferability (Viassone and Casalegno, 2011). This method was considered appropriate for this research as it is generally used to forecast, make decisions, to address and solve complex problems by using a structured communication process towards a panel of experts (Scott, 2006).
There is no rule for identifying the number of individuals or panels for inclusion in any individual study (Williams and Webb, 1994). One or more panels can be formed. Van Zolingen and Klaassen (2003) included four different stakeholder groups in one panel, while Wang et al., (2003) included two panels that were differentiated by location. Schuster et al., (1997) formed two panels in their research study. In this study four different groups of stakeholders (professional bodies): associations, academics, entrepreneurs, builders of indices have been interviewed in two main research phases.
This sample constitutes a representative sample for our exploratory research, which aims at capturing and reflecting the point of view of experts in relation to regional and wine sector competitiveness.
The Delphi approach consists of a survey conducted in two phases and provides the participants in the second phase with the results of the first so that they can alter the original assessments if they want to -or maintain their initial opinion. The research study promised anonymity in order to encourage participation. The researchers carried out semi-structured interviews in the two phases in an effort to validate the drivers and the measures highlighted in the literature.
In the first phase, the interviews were aimed at getting a validation of the framework of drivers of regional and wine sector competitiveness by stakeholders by showing them the framework of drivers identified in the reviewed literature. The interviewees were free to put forward their personal views and hence, amend or maintain the drivers included in the list. In the second phase, the interviewees were asked to allocate 100 points, among these drivers on the basis of their contribution to competitiveness. Based on the literature review, the measure for the regional competitiveness has focused on 10 variables: (economics, demography, tourism, entrepreneurship, innovation, infrastructures, internationalization, urban green areas, agriculture and craft). The process also enabled the allocation of 100 scores among different drivers on the basis of the weight they assume in the determination of regional competitiveness. This approach was seen as appropriate despite the subjectivity of replies and the slow process in collecting the data.
The scores were shared among different sub-drivers and successively segmented throughout SPSS in 4 different classes of the same size,
assigning a different score according to whether they belong to class 1 (the lowest level), 2, 3 or 4 (the highest level). By adding the scores of each sub-driver, it is possible to get 10 different partial indices; their sum generates the Regional Competitiveness Index.
1 RCI= ES+DS+ENS+INN+IS+INS+GAS+AGS+CS+TS where:
ES = economical scores DS = demographic scores ENS = entrepreneurial scores INN =innovation scores
IS = internationalization scores
INS = infrastructural scores GAS = green areas scores AGS = agricultural scores CS = craft scores
TS = tourist scores Table 1
Data belong to the Unioncamere, ICE (Italian National Institute for Foreign Trade), Istat (Italian National Institute of Statistics) and single Chambers of Commerce databases. The same process has been followed in order to compute the Wine Sector Competitiveness Index (WSCI), composed of 4 macro-variables containing other sub-variables, everyone validated and weighted by the selected stakeholders. In this case the formula of WSCI is:
2 WSCI= QS+DCS+FRS+OCMIS
where:
QS = quality scores
DCS = distinctive characteristics scores FRS = fame and reputation scores OCMIS = OCM investment scores
Table 2
Finally the correlation between RCI and WSCI has been calculated always by means of SPSS.
5 Analysis and discussion of results
This research highlights the variables indicated by stakeholders as those affecting regional (Passeri et al., 2012; Viassone and Casalegno, 2011)
and wine sector competitiveness (Zanni, 2004) supported by literature. The first investigation (Q1) is based on the identification of drivers at the base of regional and wine sector competitiveness. The model for regional competitiveness is based on ten dimensions supported both by literature and by the sample: economics (Porter, 2003), demography (Poot, 2007), tourism, entrepreneurship (Cepollaro et al., 2006), innovation (Lasch et al., 2013), infrastructures (Rohm et al., 2004), internationalization (Cotta Ramusino and Onetti, 2006), urban green areas (Franch et al., 2008; Pilotti et al., 2011), agriculture and craft, while the model describing wine sector competitiveness, as supported by Zanni in 2004, is constituted by four variables: quality, distinctive characteristic, fame and reputation and OCM investment scores. All these dimensions encompass different sub-variables.
Once we composed the framework of drivers, both for regional and wine industry competitiveness, the second step focused on attributing (assigning) them a global measure. In order to achieve our goals to structure RCI (Q2) and WCI (Q3) in a suitable way, following the Delphi methodology, stakeholders were asked to assign scores to the different dimensions of regional competitiveness and to those variables affecting wine sector competitiveness. The highest level of scores was attributed to innovational, internationalization and economic variables with reference to the regional competitiveness while to quality, fame and reputation with reference to wine sector one, confirming what was supported by Bailet et al., (2012). Scores of different dimensions were attributed in an equal way to each single different variable.
Table 3
Starting from the data elaboration throughout SPSS, we noticed the presence of a single region with a high competitiveness (Lombardia) and only one region with a good competitiveness (Lazio). In particular, Lombardia was assigned the maximum values in relation to the economic and entrepreneurial, demographic, internationalization, craft and tourist variables. Trentino on the other hand, was ranked first in terms of the number of accommodations. Lombardia has always been known for being the capital of entrepreneurship and business. In 2011, the region had 955.000 firms, 15,6% of the total number of firms operating nationally. In 2012, Lazio was one of the six regions which supplied in 2012 more than 80% of the contribution to the growth of the national export (Banca d’Italia, 2012). Also for Lazio the best performing driver is the entrepreneurship and this is the region that offers the major contribution to the creation of national value add (about 21% in 2011). Four regions were ranked high in competitiveness: Piemonte and Veneto, had the biggest
number of firms (46.800) in 2011 (7,66% and 505.467% respectively). The other two were Emilia Romagna and Toscana (considered the most famous Italian region in the world) (Guarini and Petralia, 2004). The remaining 14 regions were ranked in lower positions. Wine sector competitiveness (Table 4) turns out to be non-homogenous and it shows five regions with a good competitiveness: Piemonte, Toscana, Veneto, Sicilia and Puglia. Piemonte and Toscana were placed in the first positions. The first has a strong reputation for the quality of wine with 16 CGDO. (among others, Asti and Moscato d’Asti, Brachetto d’Acqui, Barbera d’Asti) and 42 CDO. (among others, Albugnano, Dolcetto d’Asti, Freisa d’Asti, Grignolino d’Asti, Loazzolo, Malvasia di Casorzo d’Asti, Malvasia di Castelnuovo Don Bosco, Cisterna d’Asti, Terre Alfieri, Calosso) and for reputation (it is the Italian region which received the highest number of “Tre bicchieri” Awards in 2011: 72 awards). The traditional vocation of Piemonte for the production of excellences enables wine firms to make choices not only addressed to production but also to tourist and accommodation activities. For this reason Piemonte, in addition to the institution of the wine districts, has created the wine paths and about 14 Regional wine shops and 34 wine shops and wine cellars have been created. Toscana registers the best performances with reference to the number of CDO wines (39) and to reputation and 62 Toscana wines received the “Tre bicchieri” award in 2011.
As in Piemonte, in the Toscana region the quality of wine contributes to the development of tourism throughout the institution of 14 wine paths. This region has been identified as the best European destination for the Travellers’ Choice Wine Destinations Awards 2012.
Ten regions, the majority, are placed in a discrete position while Calabria, Basilicata, Liguria, Molise and Valle d’Aosta are not competitive in the wine sector.
Table 4
6 Correlation between regional and wine sector competitiveness
The last research question of this paper (Q4) (“Is there a correlation between regional and wine sector competitiveness?”), was examined throughout the use of SPSS. This analysis showed the existence of a positive correlation between them, supporting the importance of wine tourism on the economic growth and competitiveness of a region (Hall and Sharples, 2008; Carlsen 1999). The relationship is linear, with a positive direction, and an entity by 0,301: so there is a meaningful correlation at level 0,05 (2-tails) between regional and wine sector competitiveness as shown in figure 1.
Figure 1
The survey confirms that the presence of a competitive wine sector can affect positively regional competitiveness, in particular in terms of tourist flows and investments and vice versa, allowing to satisfy the main aim of this research expressed by the Q4. One exception is Lombardia which was ranked at the top of the classification in terms of regional competitiveness but ranked 7th in terms of wine sector competitiveness. It
scored the lowest values in terms of distinctive characteristics and OCM investments.
Emilia Romagna, with a discrete level of competitiveness with reference to the two variables, Calabria, Basilicata, Liguria, Molise and Valle d’Aosta - with a low value for the two indices - are examples of regions where regional and wine sector competitiveness proceed in the same way. For these last five regions, it would be useful to focus on improving quality and valorize brands that could benefit from the positive reputation of Italian wines. Furthermore, it is important to note that despite the correlation between the two variables, the majority of Italian regions are characterized by a low level of competitiveness (14) and by a discrete level of wine sector competitiveness (10). These are the characteristics of a Country that, due to its grape varieties and its wine/food reputation, has gained a worldwide reputation but this reputation has not been sufficient to attract tourists, investments, and resources. It is essential to place emphasis on wine production and the quality of Italian wines through an integrated, cohesive and coordinated marketing communication strategy to attract higher foreign investments and an increased number of tourists.
7 Conclusions, recommendations and directions for future research
This research study highlighted the dependency of RCI and WSCI on a number of variables, which confirm the existence of a positive correlation between the two indices: a high regional competitiveness has the potential to positively affect the competitiveness of the wine sector and vice versa. However, this study revealed that there are many regions which, even though they show a good level of competitiveness with respect to wine industry, they scored poorly in terms of regional competitiveness. Subsequently, despite the high quality and reputation characterizing Italian regions, this hardly results (with the exception of a few regions) in the creation and strengthening of tourism, quality of life, economical and entrepreneurial variables, which are considered to be very important in enhancing regional competitiveness. In particular, regional
competitiveness is considered to be very important by several authors such as Storper (1997) and Dijkstra et al. (2011). There are several Italian regions characterized by a low level of competitiveness whilst only one, Lazio, has a good degree of competitiveness and another, Lombardia, has a high degree of competitiveness. This paper demonstrates how wine is evaluated on the basis of an array of criteria (Vrontis et al., 2010; Zanni, 2004) which are themselves the result of several factors (Vrontis et al., 2011). When it comes to wine, consumers’ choice increasingly relies on reputation – as asserted by Gergaut and Livat (2004) –, quality, particularly emphasized by Bailet et al., (2012) and associated with strong territorial socio-cultural aspects. The existence of a strong relationship between regional and wine sector competitiveness has implications for both theory and practice: it has the potential to stimulate the creation of more complete indicators at each level and could push territorial bodies to identify development strategies for the two kinds of competitiveness, thus creating a virtuous circle. With reference to the less performing regions, the tangible essence of the wine business demands for better individual and collective organization, improved and comprehensive strategic management approaches and systems, and a generally more professional and less passive attitude (Vrontis et al., 2011). Higher attention must also be given to the intangible aspects of wine, such as brand image (Vaz et al., 2013; Bruwer and Lesschaeve, 2012; Cannone and Ughetto, 2012) which is significantly correlated to regional competitiveness (Passeri et al., 2012). In particular, the Italian wine sector competitiveness can be improved through different strategies: first, it is important to support a strong culture of collaboration in order to strengthen wine sector research capability to better address wine sector issues. Collaboration is therefore significant with respect to marketing, branding and perception management (Vrontis et al., 2010). The obvious advice is to adopt proper strategic marketing processes. Beyond this, the research recommends mergers and acquisitions as the main way to grow and achieve proportional cost economies (scale and scope) (Rossi et al., 2012). Another strategy could be to sell premium wine to market segments that can afford to pay the premium prices in Countries. It is also necessary to implement strategies that deter or reduce competition coming from other alcoholic drinks. For example, the use of effective marketing communication strategies has the potential to develop positive attitudes towards the consumption of premium wine. The use of symbols such as seals of approval or awards from prestigious national and international associations have the potential to strengthen customer loyalty. Efforts can also focus on organizing events such as wine presentations and wine tasting in order to create familiarity and even enthusiasm with Italian wines. Another idea could be to organize wine paths/routes as well as
organized tours to attract consumers and to build an affection-based relationship between the product and the targeted audience, enabling the latter to spend more time and money in Italian wine and the Italian wine regions. Regional competitiveness can be enhanced through an emphasis on the regional brand. For this purpose it is important to invest resources in the acquisition of skills to valorize the capacity of attraction that the region exerts on the brand (Passeri et al., 2012). In particular, the brand is recognized as an important tool to attract and maintain the most talented employees. This subsequently results in employee retention and higher customer retention. In particular, the most important territorial brand (made in Italy) should be protected and could in essence form the solution to overcome the crisis and to preserve competitive advantage at regional, national and international level (Viassone and Casalegno, 2011). In conclusion, even if Italian regions are the symbol of high-quality wine, the industry’s competitiveness is not yet established and as a result the industry cannot fully exploit this advantage. This paper does not solely contribute to building knowledge in terms of measuring regional and wine sector competitiveness, but it pinpoints several limitations such as the subjectivity of drivers and indices, chosen according to subjective and not objective criteria. Specifically some drivers were not considered as important by our sample of 40 Italian stakeholders. The paper also discussed the findings from a study that was carried out in Italy and had a regional focus. As a result, the regulatory differences between different nations, which could affect the competitive drivers, were not considered. There is also the need to test the results by carrying out a statistical analysis such as regression, in order to identify the contribution made by each driver to the regional and wine sector competitiveness. This study could be extended to other levels of analysis (urban, national) and to other sectors (food, tourism, automobiles and other consumer durables). Future research can also focus on other national contexts in order to allow for a comparison between Italian wine regions and Italian wine sector competitiveness on the one hand and those of other Benchmark European Countries on the other. Given the increasing importance played by the brand in the determination of the competitive advantage of wine industry (Vrontis and Papasolomou, 2007; Vrontis and Paliwoda, 2007) and regions (Passeri et al., 2011), a future research study could be carried out in order to test the correlation between the two brand images.
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Figures/Tables
Table 1 Classification of the RCI
RCI scores Level of regional competitiveness
0-25 Low
26-50 Discrete
51-75 Good
76-100 Excellent
Table 2 Classification of the WSCI
Source: Personal elaboration.
Table 3 Classification of Italian regions on the basis of RCI
Region RCI Lombardia excellent Lazio good Piemonte discrete Veneto Emilia Romagna Toscana Campania low Puglia Marche Liguria Sicilia
Friuli Venezia Giulia Abruzzo
Trentino Alto Adige Calabria Umbria Sardegna Basilicata Molise Valle D’Aosta
Source: Passeri et al. (2012).
Table 4 Classification of Italian regions on the basis of WSCI
Region WSCI Piemonte Good Toscana Veneto Sicilia
WSCI scores Level of wine sector competitiveness
0-25 Low
26-50 Discrete
51-75 Good
Puglia Emilia Romagna Discrete Lombardia Marche Campania Lazio
Trentino Alto Adige Friuli Venezia Giulia Abruzzo Sardegna Umbria Calabria Low Basilicata Liguria Molise Valle d’Aosta
Source: Personal elaboration. Figure 1 Correlation between RCI and WSCI
