AAWE, Economics Dept, New York University, 19 W 4th St, 6Fl., New York NY 10012aawe@wine-economics.org

AAWE Working Paper No. 17

 

PRODUCT PORTFOLIO CHANGE AND ORGANIZATIONAL RENEWAL
The D.O. Wine Industry in Castilla-León (Spain) 

 María del Valle Santos, María Teresa García and Ana María Ortega

Abstract

The present study is framed within recent works addressing the process of product portfolio renewal as a mechanism for organizational renewal, in that firms may use it to meet the challenge of a changing environment. Based on this theory, we build an analysis model linking product portfolio renewal to changes in external factors and apply it to D.O. wine companies in Castilla y León. We found that both the environment as well as firms themselves had been highly dynamic during the period analyzed vis-à-vis their product portfolios. The importance of issues related to organizational adaptation and adjustment, such as those tackled in our research, lies in their link to organizational survival, making them a focal point of managerial concern. The findings to emerge from our work throw up certain implications which may prove useful to managers. In dynamic environments, such as those in which many firms find themselves immersed, it is likely that a change in the initial external circumstances may lead to a certain lack of organizational adjustment. In this situation, managers should consider the need to implement adjustment mechanisms. One such mechanism, product portfolio renewal, has proven to be a valid alternative to help them find their way in a changing environment.

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