Product differentiation strategy and vertical integration: an application to the DOC Rioja wine industry
Product differentiation strategy and vertical integration: an application to the DOC Rioja wine industry
Author(s): Marta Fernández-Olmos, Natalia Dejo-Oricain, Jorge Rosell-MartínezSubject(s): Business Economy / Management, Agriculture
Published by: Vilnius Gediminas Technical University
Keywords: transaction cost economics; resource based view; product differentiation; vertical integration; wine industry; opportunism;
Summary/Abstract: This study evaluates the importance of product differentiation as a determinant of vertical integration in firms. The proposed model also controls for known determinants of integration, such as transaction costs and firm-level capabilities. By identifying transaction-, firm- and strategy-level determinants, we derive testable predictions about the vertical integration decision. To test these predictions we analyze the Rioja wine industry, using a representative sample of 187 firms. Our paper concludes that reaching judicious vertical integration decisions requires a thorough analysis of some very diverse aspects, especially those related to mitigating opportunism, dealing with unforeseen contingencies and product differentiation.
Journal: Journal of Business Economics and Management
- Issue Year: 17/2016
- Issue No: 5
- Page Range: 796-809
- Page Count: 14
- Language: English