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Chilean Wine Industry

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  1. Introduction
  2. The potential of Chile Wine Industry
  3. National diamond analysis
  4. National factors
  5. Demand Conditions
  6. Related and Supporting Industries
  7. Firm Strategy, Structure, and Rivalry
  8. Conclusion

In today's globalized economy, international competitiveness in the international market is a growing concern for all stakeholders including government and firms. While the corporate leaders embrace dynamism to cope with the changing business climate, strategies of the firms are subject to the international competitiveness of the country. Primarily, the government concern involves learning to improve and compete in the tougher global market by fostering their national competitive advantages. For that reason, the difference in the national competitive advantage between countries explains why certain industries and firms outperform others from regions considered less competitive. This demonstrate that, the course taken at the national level by the host nation, is essential in shaping the attractiveness of the high-value sectors and facilitating industries develop their strong competitive positions at the global front.

[...] On the other hand, Chile's political, economic and institutional stability is enough incentive for investment as this influences factors increasing disposable income for the nationals (Mori & Fodor, 2012). Nevertheless, wise investment is required given the concentrated market, volatility in consumers' credit and rural population that limits opportunities to expand beyond the cities. This has forced companies to expand regionally to other countries in the Latin America. Chile runs an open economy where market forces determine the product prices. As a result, most companies experience a sophisticated demand and face free competition in their products. [...]

[...] Secondly, a limited liability company is formed by a minimum of two parties contrinuting the capital to undertake a common purpose. Lastly, investors may establish branches of foreign corporation whose operations are subject to comply with the provision of Chilean law, such as publishing annual income statements (PWC, 2008). BIBLIOGRAPHY Chile., & ProChile (Government agency). (1983). [Directory of Chilean wine producers]. Santiago de Chile?: ProChile. Morel-Astorga, P., & Ekonomisk-Historiska Institutionen. (2002). Patterns of entrepreneurship: Development of Chilean wine industry 1850 - 2000. [...]

[...] In addition, the business environment is characterized by low risk, high transparency, innovative connectivity, highly competitive economy, attractive dynamic business environment, and a region platform for regional operations (Mori & Fodor, 2012). Despite the national economy suggesting the success derived from sound policies and emphasis on market-driven economy, the Chilean wines experience stiff competition in the international market from other wine producing countries including Australia, South Africa and Old Wine countries. Similarly, the wine industry profitability suffers from the lower pricing strategy compared to competitors. While this serves to penetrate the world market, there requires a shift to premium positioning and better pricing to yield long-term sustainable returns. [...]

[...] Lund: Univ., Dep. of of Economic History. Huneeus, A., Hicke, C., & Bancroft Library. (1996). A world view of the wine industry. Hira, A. (2013). What makes clusters competitive?: Cases from the global wine industry Visser, E.-J., & United Nations. (2004). [...]

[...] The food industry exports comprise non-alcoholic drinks, vegetable juice, specialty waters, beer and the emblematic wine brands. Besides, the industrial sectors comprise fisheries, aquaculture, mining, agribusiness and forestry (Mori & Fodor, 2012). Considering the contribution of each industry to the Chile's economy, the Corfo initiated a R&D centre for each. Firstly, Fraunhofer research centre focus on researching and developing biotechnology systems for aquaculture and renewable energies. Secondly, CSIRO entails research activities relating to improving natural resources, integrating renewable energy into the country's energy networks as well as improving telecommunications. [...]

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