This research investigates the ways in which firms in the cluster approach the process
of internationalization through exploring the influence of business clustering and how
it benefits firms in entering foreign markets. The purpose was to understand this
process to enable firms to develop successful international strategies to expand in
foreign markets. The focus of the study is on the Yarra Valley Wine Industry Cluster,
the oldest wine growing region in Victoria, Australia. This research examined of
Australian wineries to join together in order to achieve greater competitiveness in
collaboration when entering foreign markets due to ever increasing global
competition.
This paper was an exploratory study that used qualitative information gathered from
the case study firms to provide practical framework for the execution of the research
using a multiple-case study design.
The findings show the following: first, some of the wineries gain their perceptions of
the foreign markets from their relationships with, as well as, by the input and
suggestions of the distributors, agents, and partners in a particular market, while
others seem to distance themselves from their international environments and only
focus on serving domestic/local markets exclusively. Second, personal networks play
an important role when it comes to the internationalization process of the wineries
because they provide access to market knowledge. Third, cooperation among cluster
firms plays a very limited role in assisting wineries in foreign market expansion; it
has only been of benefit when it came to dealing with local issues. The cluster has
played only a minor role, if any, when it comes to the internationalization of the
cluster firms. Clustering has been identified as a place where wineries exchange
knowledge, and techniques, in regards to wine production, or come together in a joint
effort to sort out local issues. However, the cluster does not provide assistance to
individual wineries entering international marketplaces.
In conclusion there was a distinctive lack of active support and organization from the
cluster with regard to the international expansion due to the lack of leadership and
joint direction among cluster members. This is where local government could take
more proactive role to facilitate better usage of geographical clusters.
The findings could improve the company decision-making process. Understanding
the advantages and disadvantages of clustering as a means for the future international
expansion can be useful in helping to develop international strategies for firms. This
would be of great significance to business practitioners because this may have a
crucial impact on the competitive advantage of firms in foreign markets. In addition
to having significant implications for practice, the investigation has implications for
international business research because it provides a better understanding of the role
of a cluster in the internationalization.
