Abstract
Italy’s wine-growing production structure is highly pulverized. So, for many wine-growing farms lowering the production cost represents the only way of gaining a competitive advantage. Production at average unit costs lower than competitors allows to improve profitability. Among farming operations, winter pruning and tying of productive vine-branches require a high human labor. For this reason the paper presents the results of research conducted on a sample of Sicilian wine-producing farms in order to study the cost-effectiveness to make the pruning and the subsequent ligation of productive branches with tools that facilitate the work. The economic analysis, after the determination of minimum optimum size, shows that the investment is suitable for both large or small farms. This denotes how the process innovation could represent a way to achieve a cost leadership and improve profit margin.
Highlights
Competition represents the only way of gaining a competitive advantage (Tudisca et al, 2013a; Barber, As highlighted by statistics, Italy’s wine-growing 2012)
For many wine-growing farms lowering the production cost represents the only way of gaining a competitive advantage
The total unit costs of hypothesis a decrease minimally with increasing hectares of surface under vine, most of them being represented by variable costs which remain unchanged for each hectare of vineyard undergoing pruning and tying operations
Summary
Competition represents the only way of gaining a competitive advantage (Tudisca et al, 2013a; Barber, As highlighted by statistics, Italy’s wine-growing 2012). 106,092 hectares and a production of 700,581 tons, is first Italian Region in terms of wine grape area (16.5% of and to obtain a higher sustainability with lower riskmanagement (Dittmar, 2014; El Dabee et al, 2013; the national wine grapes area), thanks to its favorable climate (Grillone et al, 2014; 2012; 2009; Ibáñez et al., Zhou and Lu, 2012; Santeramo et al, 2012) This situation affects the financial structure and the. The distribution of Sicilian productive structures according to wine grape area shows that term by offering new products that differ from their competitors, thereby creating differential advantage For these micro-enterprises, that produce an operations amenable to measures aimed at reducing undifferentiated product, lowering the total cost of production costs is winter pruning (Kostadinov et al, production per unit to a level below that of the 2008). Nowadays the mechanical engineering sector offers wine growers a variety of power tools and machinery, allowing them to significantly curb time requirements for operations, thereby reducing production costs (Dokoozlian, 2013; Tardaguila et al, 2012; Gotyal et al, 2010; Morris, 2007; Intrieri and Poni, 2000)
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