Epsilon Archive for Student Projects

Abstract

The thesis investigates the internationalization process of the Macedonian wine producers and the challenges they face along their international path. The aim of the thesis is to describe, explain and understand how Macedonian wine producers internationalize. The thesis focuses particularly on the role of networks on the international growth of the wine producers from Republic of Macedonia.

In order to provide a better understanding on the internationalization process of the Macedonian wine producers the thesis presents an integrated conceptual framework by integration of the traditional and network approaches to internationalization, the integrative model of small firm internationalization, the motivating and hindering factors and the key factors influencing the process. To achieve the aim, the thesis focuses on the wine subsector in Macedonia. An exploratory multiple case study approach is adopted in order to provide better understanding of the process based on the international experiences of six wineries from Macedonia.

The findings showed that the Macedonian wine producers commence international activities soon or right after the establishment of the wineries. The exports of bottled wine are concentrated in the regional markets while the exports of bulk wine are concentrated in Germany. The initial and ongoing export activities are motivated as a result of the limited domestic market and, to a lesser extent, as a reaction to the opportunities that arise from the foreign markets in form of unsolicited orders. In the later stage of the export development the producers of bottled wine are motivated to internationalize by proactive factors, such as knowledge about foreign markets and representative product, in addition to the limited domestic market. However, the findings showed that the proactive motivation and approach in looking for new market opportunities, in this case, do not reflect in a proactive expansion to new foreign markets as the wineries are concentrated on few key markets where the wine is exported as bulk or bottled with lower prices, indicating that the expansion to new markets depends from other factors too. It was identified that those are mainly factors that originate from the domestic environment that reflect on the export activities of the wineries in the foreign environment, and are thus beyond their control. Examples are: lack of country image outside the regional markets, underdeveloped support industry, lack of governmental support and unregistered wine regions in the EU as a country specific factor that influences the development of image of Macedonia as a producer of quality wine.

Personal and business networks play a significant role on the export activities of the Macedonian wine producers as they provide them with information and knowledge about foreign market opportunities and in some cases initiate establishment of new contacts and business relationships. However, not all of the wineries are aware of the role of the business and personal relationships on their internationalization process. In addition, the wine associations, except for one, are not perceived as an instrument that creates international opportunities for the wineries.

The level of presence of the Macedonian wine producers in the foreign markets is not sufficient to meet the quantity production potential of the wineries. Thus further expansion on these markets and to new foreign markets and the development of stable business relationships, would allow for utilization of their unused production capacities, thus higher profitability, which will enable them to invest in new technology and equipment or innovation. Moreover, it will be beneficial to the overall Macedonian economy and employment in the viticulture regions.