Abstract
The rapid and all-encompassing changes in regional and world wine markets have stimulated us to carry out this study. Accordingly, based on the competitiveness of an important Port wine producer in Portugal, this article analyzes a strategic alliance between this company and another important multinational one that is present in many different worldwide distribution markets. Basically, the article seeks to understand, on the one side, the impact of a strategic alliance on a small Port wine producer when becoming involved with a multinational company, and, on the other hand, to identify differences, before and after the alliance, to the markets where the small company was made present. This work is centered on a case study and involves the use of econometrics methodologies that analyze panel data, in order to grasp differences of strategic pre- and post-alliance actions. The conclusions are important, since they allow one to compare, on one hand, difference between the company´s performance over two different time horizons. On the other hand, econometrics methods are robust, since they allow one to come to relational conclusions, keeping the case study in mind.
Highlights
In the context of internationalization, thePort wine sector has focused almost exclusively on exports to foreign markets, in which distributing agents and subsidiaries of large multinational groups, owners of the most prestigious brands, have dominated distribution
In comparison to the international price for the set of countries in the sample, is elastic, since, in absolute terms, its value is greater than the unit; this does not occur in the post-alliance period, which is inelastic
1% in world markets over the period prior to the alliance, rather than after it. This result confirms the importance of the alliance, since ALFA gains market shares through the alliance in global terms to the same levels of traded volumes of Port wine at different world prices
Summary
In the context of internationalization, thePort wine sector has focused almost exclusively on exports to foreign markets, in which distributing agents and subsidiaries of large multinational groups, owners of the most prestigious brands, have dominated distribution. Changes dictated by market globalization implied, amongst other alterations, disinvestment in Portugal by some multinationals operating in the sector, which led to the concentration of business in family economic groups with local decisionmaking centers and strong investment capacity and initiative, but lacking their own distribution This situation has led companies to the need to find alternative solutions to maintain and/or develop the presence of Port wine brands in the global market. Consumers have become more demanding and price sensitive because of the diversity of products available and companies are forced to reduce their profit margins to keep demand (DICKEN, 2011)
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