Strategies, Orientation and Marketing in the Italian Brewing Sector

Strategies, Orientation and Marketing in the Italian Brewing Sector

The number of microbreweries and brewpub in Italy is increased over the last decade. The traditional beer market, largely dominated by four large firms offering mainly standard-tasting - light beers - products is now experiencing the rise of the microbrewery movement, in many ways similar to the US Craft Brewing Renaissance occurred in late ‘70s (Carroll & Swaminathan, 2000; Choi & Stack, 2005). Since 2000 the number of microbreweries and brewpub offering specialties and traditional-style beers is now more than six times, moving from about 50 to more than 310 firms in 2010.

Such a phenomenon constitutes a promising context for deepening knowledge on SMEs competitive strategies and marketing in new segments of mature industries. Specifically, though the impact of generic strategies on firm performance in the SMEs arena has been studied (Lee, Lim & Tan, 1999; Leitner & Guldenberg, 2009) a gap on how they are affected by the development of organizational competences and marketing practices - such as ambidexterity and brand management - still need to be filled. The aim of this study is to explain how building internal competences for pursuing multiple orientation and establishing brand management initiatives affects firm performance both directly and indirectly, through a mediation of the impact exerted by generic strategies.

This study is built around three core constructs: generic strategies, ambidexterity and brand management in the SMEs field. This research aims at identifying interaction among the three constructs and testing their effect on SMEs overall performance.

The notion of generic strategies is derived from Porter's taxonomy of competitive strategies and has been widely explored in literature since it was first introduced in 1980. Although, whilst the formal implementation of cost-efficiency, differentiation or combination strategies has proved its effectiveness among large firms (White, 1986; Herbert & Deresky, 1987), conflicting results have emerged from previous research in the SMEs arena with regard to the best strategy to be adopted (Dess & Davis, 1984; D'Ambroise, 1993; Pelham, 2000).

Ambidexterity is referred to the extent organizations pursue multiple orientation by developing specific competencies that suit multiple strategic drift (Berthon, Hulbert & Pitt, 1999). Previous studies in the SMEs domain support a simultaneous orientation toward an exploitative and explorative orientation having a positive impact on firm's performance (Lubatkin et al. 2006).

The relevance of brand management on performances achieved by multinational-multi-branding organizations has been largely discussed in extant literature. With few exceptions - such as the work by Berthon and colleagues (2008) - the adoption of brand management practices on SMEs performance has been overlooked. Also, the relationship between brand management and ambidexterity was not explored in previous studies.

In this study, both qualitative and quantitative approaches have been employed. The first stage consisted on qualitative case studies of nine among microbreweries and brewpub operating in Italy. Cases were selected according to firm's age (three established in 1996, three in 2004 and three in 2008) and are located all over the Country (three from South Italy, two from Middle Italy and four from North Italy). Each case is built around a field visit of the production facilities, an in-depth interview with the founders of the firm and an analysis of firm's website and documents for data triangulation. Each interview was recorded, then verbatim transcribed and backed up by the interviewee to assure reliability, and lasted on average 80 minutes. Information obtained in the first stage was used to inductively formulate hypotheses to be tested in the second stage and to conduct a preliminary analysis of materiality of used scales to small-medium firms and to the industry.

To test the hypotheses formulated in the first stage of the study, a questionnaire based on the theoretical constructs described above has been prepared. Then, it will be delivered to the whole population of microbreweries and brewpub operating in Italy - that is 315 units - for an online survey. The data collection stage will be led between March and May 2011. To increase the redemption rate the study is promoted by Unionbirrai, the main association among the brewery segment in Italy. A linear regression model will be created to run data analysis through SPSS.

The research is expected to contribute to extant literature in two ways. First, it focus on the Italian brewery segment from a management perspective. Though the Italian beer brewing renaissance has been overlooked until now, it deserve attention, especially considering the relevance of SMEs in the Italian economic system. Second, it aims at contributing to strategic and marketing theory explaining interaction among generic strategies, ambidexterity and brand management practices among SMEs operating in a new segment and their impact on firm performance.

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