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| Australian wine industry clusters, economics and branding | | Print | |
| Written by Noric Dilanchian | ||||||
| Friday, 25 May 2007 | ||||||
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The graphic (reproduced below) can illustrate the point that wine regions gain competitive advantage when a cluster of industry participants work together to achieve vastly more together than they could working in competition individually.
In economics and management literature this is known as the business or industry cluster theory. It was expounded most famously in 1990 in The Competitive Advantage of Nations, an 896 page book by Michael Porter, the American economics and management academic.
Porter and his research team applied the cluster theory to manufacturing industries, eg for Italian shoes and Japanese cars. For the past 17 years the cluster theory has remained in vogue including with governments in Australia, eg when considering (as other countries have) how to create a local Silicon Valley ICT cluster.
I realised the cluster theory had previously been applied to the wine sector in Australia only after reading the 22 May 2006 academic conference paper titled Clusters of Grapes and Wine by Rolf A. E. Muller and David A. Sumner. This is evident from its 2000 and 2004 Australian references:
The Marsh and Shaw report is 72 pages. It too reproduces the graphic titled The California Wine Cluster. It discusses the rising importance of collaboration in contemporary economics and its specific contribution as a cause for the high performance of the Australian wine industry, eg in its high level of exports and creation of value.
The relevance for us as intellectual property lawyers in all this is triggered by the inclusion in the graphic of "labels" and "public relations and advertising" as stakeholders in the California Wine Cluster. The same types of stakeholders are involved in wine industry clusters in Australia.
Proper integration and alignment of work in label idea generation, bottle and packaging design, marketing, branding, domestic and international trade mark registration, and intellectual property portfolio management are collectively core requirements for operating both economically healthy wine industry clusters and individual Australian wine companies.
As Marsh and Shaw argue, this has been backed by developing a "brand Australia" approach in supportive and collaborative work by industry, regional and government bodies. They note this helped provide part of the answer to a key question they asked in their report: "How did the industry in an apparently short period establish reputation and brands in remote markets?" It's not rocket science, it just evidences the links operating in and integrating Australian wine industry clusters, economics and branding. Those linkages build "competitive advantage", another concept popularised by Michael Porter.
---------------------------------------------------------------- References: Marsh and Shaw cite the original source for The California Wine Cluster graphic: "Based on research by Harvard MBA students R. Alexander, R. Arney, N. Black, E. Frost, and A. Shivananda. Illustration from M. Porter, On Competition, p.201."
Further Reading
On wine law, wine company valuation, wine marketing, wine exports and
liquor trends there is a wealth of additional material in Lightbulb and
the Dilanchian Website Library:
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A recent US academic conference paper applies the cluster theory to the Californian
wine industry and includes a very interesting graphic. It is a useful resource for decision makers in wine clusters in
regional Australia, eg in the Hunter Valley, Yarra Valley and Margaret River.
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