Regional-level coopetition strategies and company performance: evidence from the Canadian wine industry

ABSTRACT

Regional-level coopetition (collaboration among competitors in rural communities) has been linked to company performance. That said, there could be conditions (moderators) that help or hinder these networks from fulfilling such outcomes. This investigation examines the nature of the relationship between regional-level coopetition and company performance under key moderating effects. A resource-based theoretical lens is utilized to underpin the study. Following field interviews to shape the operationalizations and survey instructions, a quantitative study was undertaken in the Canadian wine industry to test the elements of the conceptual framework. The findings revealed that while regional-level coopetition drives company performance, regional-level rivalry negatively impacts this association. Surprisingly, industry experience intensified the potential dark-sides of these activities. As such, improved evidence has emerged on how coopetition strategies can be implemented in rural communities through the underlying mechanisms that can assist decision-makers of small enterprises to enhance their performance. Additionally, stronger insights are offered regarding a relational, stakeholder perspective of resource-based theory, in terms of how decision-makers may need to work with complementary and trustworthy rivals that can assist them to increase their company performance in competitively intensive environmental-level conditions.

KEYWORDS:

• Regional-level coopetition
• regional-level rivalry
• industry experience
• company performance
• resource-based theory
• wine sector

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. A related notion to rural communities is clusters (Kusa, Marques, and Navarrete 2019; Scott, Hughes, and Kraus 2019; Tallman et al. 2004). These are a ‘geographically-proximate group of inter-connected companies and associated institutions in a particular field – linked by commonalities’ (Porter 2000, 16). Clusters take different forms, including agriculture and fishing (Felzensztein, Gimmon, and Carter 2010), alcohol producers (Mathias et al. 2018), education-based start-ups (Nieto et al. 2021), ethnic enclaves (Arrighetti, Bolzani, and Lasagni 2014), high-tech ecosystems (Adams 2021), hospitality (Crick, Chaudhry, and Crick 2018), indigenous villages (Light and Dana 2013), and tourism (Crick, Karami, and Crick 2022). In this study, rural communities remain the focus (in line with Crick and Crick 2021; Dana, Gurau, and Lasch 2014; Kalantaridis and Bika 2006; Munoz and Kimmitt 2019). Sources pertaining to clusters were utilized to examine the nature of the link between regional-level coopetition and company performance (Darbi and Knott 2022; Felzensztein, Deans, and Dana 2019; Granata et al. 2018). In contrast, clusters in urban settings were peripheral to this study, vis-à-vis, sparsely populated geographical areas. The authors express gratitude to an anonymous referee for requesting clarity on how rural communities were categorized in this investigation.

2. Competitive forces may increase when firms enter export markets, alongside owner-managers facing different institutional forces that affect risk/reward decision-making across product-markets (Crick 2007; Crick, Chaudhry, and Batstone 2000; Raman Sharma, Sraha, and Crick 2018; Sraha et al. 2020). For example, decision-making affects the mode of market entry, together with the speed, scale, and scope of internationalization. Recognition nonetheless exists that stakeholders such as trade bodies and support providers can offer information, subsidies, etc.; hence, owner-managers do not need to rely on rivals via coopetition (Chaudhry and Crick 1998; Felzensztein et al. 2022; Jones and Crick 2004; Spence and Crick 2001).

3. Coopetition involves the interplay between cooperation and competition (Bengtsson and Kock 2014; Gnyawali and Park 2009). These strategies can be implemented by owner-managers of organizations of different sizes. That is, larger corporations have engaged in coopetition, such as to boost their efficiency in manufacturing value-adding offerings (Gnyawali and Park 2011), and general alliances to pursue opportunities (Brouthers, Nakos, and Dimitratos 2015; Hamel, Doz, and Prahalad 1989; Hara and Kanai 1994). This investigation focuses on smaller-sized enterprises, since they are more likely to be under-resourced (with limited assets) to fulfil their goals (Campbell 1996; Hewitt-Dundas 2006; Jones and Rowley 2011). Hence, it was anticipated that smaller-sized businesses would be more active in regional-level coopetition strategies, so that they can overcome their scale-based struggles with assets to survive and grow within their markets (Bengtsson and Kock 2000; Dana et al. 2013; Kraus et al. 2019). The authors express gratitude to an anonymous referee for requesting more detail on this matter.

4. It is appreciated that the link between regional-level coopetition and company performance is well-established. However, the moderators affecting this connection are under-researched (Crick 2019; Hoffmann et al. 2018). Consequently, while the conceptual framework models the regional-level coopetition – company performance relationship (Hypothesis 1), the core contributions to the wider entrepreneurship literature were driven by both Hypothesis 2 and Hypothesis 3. The authors offer thanks to an anonymous referee for seeking more detail on this issue.

5. These main controls were constructs that were anticipated to contribute to explaining the variance of company performance (alongside the hypotheses). Additionally, some procedural controls were included within the conceptual framework to test the proposed three-way interaction effect (as per Cadogan, Kuivalainen, and Sundqvist 2009; Lam et al. 2019). That is, the controls were not exclusively statistical tools used in the model-testing stage. The authors thank an anonymous referee for asking for more detail on this aspect of the investigation.

6. The field interviews influenced the researchers asking a question to those responsible for the database (Canadian Vintners Association) to clarify that listed firms were not subsidiaries of larger organizations; also, checks were made on businesses’ websites. Although such efforts do not guarantee the businesses in the database were not subsidiaries, the approach taken minimizes the probability of this. The researchers also acknowledged that even if the firms were not subsidiaries, some may be professionally managed by someone other than the major equity shareholder. Such considerations were pertinent as there is a long-standing recognition that broadly termed ‘owner-managers’ operate in different ways; not least, between those in small as opposed to larger-sized firms (de Oliveira et al. 2015; Geeraerts 1984; Woods and Joyce 2003). The authors thank an anonymous referee for asking for clarity on these issues.

7. The researchers thank an anonymous referee for requesting clarity regarding the steps taken to increase the likelihood that an appropriate respondent completed the survey.

8. Proxies have been utilized to operationalize other issues, including to measure coopetition (or synonymous constructs) (Ang 2008; Ritala 2012). It was appropriate to consider a proxy to capture the nomological properties of regional-level rivalry, while taking steps to ensure that this was a robust tool. The measure was borrowed from an existing source (namely, Crick 2020). Next, it was confirmed as being a suitable measurement during the field interviews (in line with Katsikeas, Samiee, and Theodosiou 2006). Then, it was checked during the pre-testing stage, in which a group of expert academics and practitioners deemed that it was a suitable operationalization to measure regional-level rivalry in the Canadian wine industry (following Westphal 1999). Thanks is offered to an anonymous referee for asking for more information about the regional-level rivalry measurement.

9. The authors acknowledge an anonymous referee’s request for presentation of characteristics in broad categories for summary purposes.

Additional information

Funding

The work was supported by Loughborough University [None].