DDBA
Status games in Wine industry .pdf

Systems perspective we examine a broader set of

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systems perspective, we examine a broader set of actors than previous research by integrating those outside the value chain, including critics and the media. Using ethnographic or quali- tative methods (Geertz 1994; Glaser and Strauss [1967] 2009; Pettigrew 1990; Thompson, Locander, and Pollio 1989), we examine producers, distributors, retailers, critics and the press, and consumers. We explore the relative in uence, motives, and relationships among stakeholders. Our analysis produces new insights into three areas. First, we show how fi rms drive a market without innovation. We fi nd that fi rms systematically and strategically take action to shape consumers preferences and the decisions of rivals, as Jaworski, Kohli, and Sahay (2000) propose. But we fi nd that fi rms do so through a complex social process. Firms build relationships with actors both inside and outside the value chain. Through these relationships, they in uence consumers, critics, and other actors, thereby shaping preferences. For example, drinking wine is a subjective, complex, and am- biguous experience for many consumers. Market-driving fi rms try to in uence how consumers interpret and value wine by in uencing critics and the language they use. In turn, critics in uence producers, retailers, and, ultimately, consumers. A fi rm s in uence, however, extends well beyond preferences. Firms strive to de fi ne product categories, the standards used to value wines within categories, and the status of brands. We analyze how fi rms engage in these activities continually to drive markets over the long run through social in uence. Second, our analysis suggests that fi rms use this social in uence process to create competitive advantage. By shaping the preferences of consumers and rivals, they shift the ow of resources in the industry and gain more in uence than rivals, which creates competitive advantage. To achieve in uence, fi rms compete in a status game in which they develop and promote their vision and seek recognition from in uential actors such as critics and winemakers. Some fi rms gain status, while others do not. Winners achieve fame and fortune, and their winemakers become industry celebrities, while losers remain obscure. More fame confers even more in uence to fi rms. For example, a celebrated winemaker can in uence critics and consumers to a degree that an obscure winemaker, however gifted, cannot match. Consumers pay high, even extraordinary prices for high-status wines despite the avail- ability of thousands of excellent, lower-priced alternatives. Moreover, fi rms in the wine industry enjoy high status for years, sometimes decades, and, in a few famous cases, more than a century, suggesting that status is an important source of long-term advantage. We identify how fi rms compete for status, how status creates competitive advantage, and why this advantage endures.
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