A characterization of wine producers in four South American countries: examining similarities or dissimilarities in current business practice

Abstract

This study examines wine production in Chile, Argentina, Brazil, and Uruguay, exploring whether their different macroeconomic outcomes and global market access reflect distinct firm-level business models. It characterizes supply structures, productivity, and technology at various stages to identify similarities and differences in business practices, using a unique firm-level database from a standardized survey. The approach draws on Management Science (Institutional theory, Resource-Based View, PESTEL analysis (acronym for political, economic, social, technological, environmental and legal) is a framework of external macro-environmental factors used in strategic management and market research and Porter’s five forces framework) to analyze competitive pressures, with quantitative analysis of productivity ratios, Principal Component Analysis for a Capital Index, and proxies for quality and strategies via frequency and correlation analyses. Results reveal two paths: the quality-focused, export-driven “Chilean model” and the protectionist, diverse “Mercosur model.” While all four countries have larger, more diversified wineries than Europeans, Chilean firms excel in quality proxies and market reach. Macroeconomic stability and trade openness matter more for export success than technical practices, which are easier to imitate. The main contribution is applying firm-level data to link macroeconomic trends and micro-level practices in the South American wine industry, providing a framework to understand strategic decisions, institutional factors, and long-term market participation.