Abstract
In order to provide needed orientation of innovation management in the SME wine industry, a multi-case study was realized. The innovation activities of four German wineries for their entire value-creation coverage were analysed. The focus of the study was on an apparent challenge whether wineries should emphasise viticultural (back-end) or marketing and sales (front-end) innovations. The results of the four cases analysed suggest that innovation matters, strategic positioning influences each wineries’ innovation portfolio, winery size and organization impact the innovation portfolio, resource dependency can be reduced through cooperative action at the industry level, and smaller producers must leverage their entrepreneurial orientation. All integrated wine producers need to address front- and back-end innovation, but with flexibility for innovation accentuation and individual innovation portfolios. Wineries also need to recognize the synergetic value of two different challenges: (1) convincing products require optimal planting and farming whereas (2) the product assortment and its treatment should consider customer profiles. Hence, front- and back-end innovations need to be synchronized and considered in parallel, without ignoring each winery’s strategic accents and therefore individualization of the innovation portfolio. A synergetic innovation approach, exploiting technology and data mining, can foster the development of competencies and best practices when using existing wine industry resources and capabilities. Knowledge exchange at the industry-level helps producers reach consensus on innovation activities, goals, and strategies, and to improve the business ecosystem by identifying elements that are obsolete or ripe for change.
Highlights
The assessment of innovation activities of the cases resulted in a list of unstructured innovation activities which are listed on Table 2
The findings suggests that cooperatives can pave the ground for innovation in the German wine industry
Innovation is deemed to be a key success factor for wineries operating in increasingly competitive markets
Summary
Innovation is considered a panacea to compete in today’s competitive markets and is defined to be key for companies to develop, grow, position, and sustainably secure profitability in competitive business environments, especially where there are changing customer needs (Crossan & Apaydin, 2010; D’Aveni, 1994; Denton, 1999; Hauschildt, 2004; Jenssen & Jorgensen, 2004; Johannessen et al, 1999; Wang & Ahmed, 2004). Addressing innovation from an upstream perspective (activities close to the exploitation of natural resources and viticulture)—hereafter termed back-end innovation, and a downstream perspective (securing market access and customer acquisition and loyalty)—labeled as front-end innovation stretches the innovation portfolio of wine estates (Singer & Donoso, 2008)
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