Strategic Sustainable Wine Regions: Balancing value creation and value appropriation

Abstract

Purpose: This paper presents the case of Champagne region to illustrate how regions can achieve strategic sustainability when they balance value creation with value appropriation. Design/methodology/approach: The approach is based on case study research method (Eisenhardt, 1989). The author interviewed different stakeholders in the Champagne region during a study trip and consult secondary sources to triangulate the findings from the interviews. Findings: Champagne region has in place different mechanisms generating value, e.g. history and key actors, and balancing the appropriation of it through pricing and isolating mechanism. However, the region required long periods of turbulence and conflict until it found its balance cemented on social capital and formal institutions. In other words, stakeholders learned how their strategic sustainability was intrinsically interrelated and depended on each other actions over many generations. Once the balance is achieved, professionally managed institutions take an important role maintaining this balance over time by isolating the main sources of competitive advantage. Thus, strategic sustainability is achieved only after long periods of social learning enhanced, in some circumstances, by external shocks that affected the sustainability of the region and a clear balance between value creation and appropriation.

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