Walla Walla’s Success as Applied to the Cluster Theory of “Competitive Advantage”
I love to geek out on business data and the wine industry has more than enough reasons to get your geek on. Professor Emeritus Mike Veseth is one of the leading wine industry economist and always presents his work in a reasonably easy way to understand and apply.
In this post he explains some economic theory as applied to the Washington wine industry, specifically Walla Walla. Ok people, especially Francophiles and Californians (notice how I didn’t mention the wine regions less prone to superiority complexes?) We may be fabulous, but we can all learn something from mes amis in the North West. They are taking no prisoners and when cult wine makers like Todd Alexander are lured from Napa to go work in WA – it’s time to take notice. More on that story at this link: http://bit.ly/1oGELAt
My key takeaway: Walla Walla’s success as one of the top performing wine regions in the US has been accelerated through the dynamic and synergistic interaction of wine industry people. The research categorizes them into four loose groups: the Pioneers, the Next Generation, the Foreign Legion and the Millennials. It’s a good read and not much longer than my preamble.
I will admit, I’m not well versed in WA wines, but I will now start taking notice.
Harvard business professor Michael Porter famously conceived of a “cluster” theory of “competitive advantage.” It isn’t one thing that makes a regional industry successful, he said, but rather it involves the dynamic interaction of a network of forces and factors that, when they come together, create an environment where all are successful.
Porter’s “diamond” analysis can be applied to many regions and industries, even wine. In fact. Nick Velluzzi of the Walla Walla Community College has applied it to his region’s wine sector (click here to read about his research). If you are interested in wine clusters or Walla Walla you should check out his work.
I am interested in how and why Walla Walla has risen to the top tier of American wine region, but this week I want to talk in terms of human networks not Porter’s approach, which focuses on networks of market institutions. It seems…
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