Value creation in relationships between Australian wineries and their winegrape suppliers

Abstract

Increasingly, business success in today’s highly competitive and dynamic Australian grape and wine industry has become reliant on working with the right partners and being able to develop and manage these relationships. In order for business relationships to prosper, each party must achieve some value beyond that which they would receive if they were to operate independently. The higher the value expected or received, the stronger the motivation for partners to continue the exchange. Still, while customer and supplier firms are deeply conscious of the value of their relationships with trading partners, knowledge as to which elements of the relationship confer value and the extent of that value can be difficult to clarify due to the multidimensional, intangible and often indirect nature of the concept. This lack of clarification becomes problematic for firms when they attempt to build a coherent customer or supplier relationship management strategy.

This comprehensive study of 575 Australian wineries and wine grape suppliers in South Australia, New South Wales, Victoria and Western Australia has gained a better understanding of how partner attributes such as the willingness and ability to resolve conflict, communicate effectively, provide performance satisfaction and the propensity to trust and cooperate can enhance the value of customer and supplier relationships. Furthermore, it was revealed that the extent and means by which value was created for wineries and independent wine grape suppliers were significantly different.

The resultant framework provides a link between the problems encountered in creating relationship value and identifying solutions which are current, relevant and appropriate to the Australian grape and wine industry. The framework can be applied by wineries and wine grape suppliers at multiple levels of analysis: individuals, firms and populations.

Summary

Survey drawing a picture of the relationship between growers and winemakers and investigation their relationship value systems.