Cooper creek was a typical entrepreneur venture in that its development and growth were driven by the founding entrepreneur, Andrew Hendry. Critical factors in the success of cooper creek were Andrews Hendry's ability to manage networks and activities within the context of innovative and flexible manner. He also used relationships to leverage resources to pursue growth as indicated in comparative export figures. This report will first consider the main reason for cooper creeks being successful in the international market, and then will further discuss some of the company's strategic changes that occurred between 1996-2000 and finally analyze the movement of cooper creek into new international markets using various theories and models.
(I)Unique Resources and Core competence imitability
These ranges from managing employee relations to managing physical resources to achieve effective and efficient results. Andrew Hendry's relationship with growers offered the company some advantages within the industry. The grower's financial stake in cooper creek meant that they had incentive to ensure the survival and success of the company this was basically the implementation of Total quality management. Also the wine styles which represented a unique resource became the choosing and blending of the grape varieties is a critical skill on which their reputation is based.
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Andrew Hendry represented a unique resource of the cooper creek winery, and he actively managed the company's involvement in each individual network. He instigated the local network and his community involvement enabled him to become known to other winery owners and also helped to enhance his reputation. He built a platform of trust on which collaborative networks are based. The combination of his personal style and business philosophy was imitable.
(II) Managing linkages to gain leverage
The setup of New Zealand wine institute also promoted grape quality and also encouraged participants to focus on added nature of international offerings which was also in line with the national policy of moving away from commodity based product in international markets. This was to ensure satisfactory performance to be able to capture the international market. Also Andrews's role with the wine institute is likely to have resulted in a two way information sharing by which Andrew was able to exert some influence on the industry direction while benefiting from the analytical overview of the institute which helped him plan strategically into the entry of new international markets. Again in partnership with the wine institute there was excursions into other European countries example Holland, Belgium and Switzerland to have a desk survey or market survey which actually brought out the pros and cons of various international markets. There were also regular visits by Andrew Hendry to his overseas importers. Apart from exchanging of views on the state of the market, details of latest vintages and discussions on prospective new markets and customers were discussed.
(iii) Competence in specific networks
Network competence is considered to be a company-specific ability to handle, use, and exploit interorganizational relationships (Ritter and Gemünden, 2003, Ritter et al., 2002).copper creek used both vertical and horizontal linkages in its network development. The vertical relationship with grape suppliers ensured both quantity and quality of supplies. This further helped cooper creek to keep up with international market demands. This was a very effective strategy for example when the demand for grapes outstripped supply until 1996.Therefore, the ability to negotiate access at a reasonable cost represented a critical competence. Cooper creek had good supply chain management. He had direct control and contact with his network supplies and was able to make changes immediately to effect new market demands. The Network Competence is the platform on which cooper creek was successful in the international market. It brought together and networked interdisciplinary expertise and gave his employees rapid access to all the information they need to solve problems in a given project.
(B) By 2000 the company had managed to spread to spread the risk of adverse weather conditions in all of the four major New Zealand growing's regions. For example Andrew further diversified the Hawkes Bay land interest by leasing another vineyard and developing a joint venture with the ownwer-growner of another. This was just to balance dynamic economic and environmental conditions with sales and also boost growing on land for particular plantings which were in high demand and also instigate growing grape types on appropriate lands to achieve high efficiency in growth. Cooper creek also employed diversified branding strategy. Not only were the products marketed under cooper creek name, the company had also developed a range of wines selling at different price points as exclusive labels for retail chains in the USA, UK, Australia and Holland together with product varieties e.g. Cat range had been established in both the domestic and international market. This basically was to sell out the brand locally and internationally. This he implemented because of cooper creeks quality wine and unique taste. Cooper creek also set up a modular-approach based on grape truck-load capacities by increasing its annual production emphasizing on the increase in tonne batches. This gave it a competitive advantage because more different types of wine (varieties) were produced and emphasis was laid on individual units of production. There was also the installation of additional machinery together with support from growers cooperation crushing plant in Gisborne.This outsourcing also gave it a high competitive advantage like Swiftness and expertise, Concentrating on core process rather than the supporting ones, Risk-sharing and reduced operational and Recruitment costs. Overall this approach helped cooper creek reduce cost and also gave it a better quality wine. For example in 2002,cooper creek managed to make a reserve(higher quality wine) from Gisborne Chardonnay which possible may not have if the grapes had all been trucked to Auckland for crushing and also 2002 had the highest revenue sales. Cooper creek also had the capacity to juice for other wineries and was involved in occasional production based collaboration because they had a higher capacity now. This generated revenue for them to further expand the industry together with building up the company's performance.Again,cooper creek engaged in crushing at key times, the wineries swapped grapes, shared equipment and jointly purchased key inputs for example creek shared the cost of container-loads of barrels with other wineries. This was basically for enhance mutual cooperation and build a platform of trust for further engagement and assistance. Also it helped cooper creek in that, there was transfer of technology and knowledge and sharing of operational experience. This also sorts to balance performance so that almost equal performance would be achieved to avoid monopoly. On the product side it contributed to one of the key reasons for cooper creek having a unique wine taste as this became a unique resource and helped it again competitive advantage in the market. Cooper creek joined New Zealand Institute to attain professional and international recognition to boost its image on quality control and quality assurance mechanisms. This also helped the company to benefit from market plans and strategies. Collectively this was easier to accomplish than individual companies finding solutions. The specialization of groups also helped individual companies achieve specific goal and obectives.The the formation of the New Zealand institute which attracted government support made the cooper creek and the other firms more secured and institutionalized. The principal aim which was to jointly sell the New Zealand brand ahead of individual wine company labels which finally had some effects on cooper creek like shared risk, less investment into research and development and free consultancy services on marketing strategies and most importantly an integration which sort to build competent network system. This created a high barrier entry for globally emerging wineries and could not been achieved individually. As the market became increasingly competitive cooper creek took the step of employing three sales representatives one concentrating on restaurants sales and the other focusing on retail sales in Auckland and local country areas this was basically to secure its strong holds and also target a direct market (market specialization).This is to focus on delivering quality products and services and also meeting the specific needs of the market.
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(C) Cooper creek had already made some international market entry some of which was highly successful and others he struggled with because much market survey was not conducted. Overall cooper creek still has the capacity to enter new international markets but a careful survey need to be done which includes first accessing its internal resources to see its overall position in the competitive market, can then go on to access the external factors basically to see the correlation between the market and the economy which is driven by several factors outlined below. First and foremost is to consider its internal factors which are basically its strengths and shortcomings or weaknesses. Cooper creek can build on its core competences such as its brand value, unique products, its solid and diverse network supplies and the bad experience suffered from the previous entry of other international markets. This will give it a key competitive advantage in the market.However,its weaknesses should not be ignored as this is going to be an advantage to its major competitors. Some are its sole reliance on the US market because it now its major market. It should be noted that with time the US market will also be saturated and be highly competitive like what happened in New Zealand. Cooper creek is putting the US market to high risk such that any drop in sales from competition will disturb other operations in other markets since most will be depending on success of the US market. There are certainly key factors to consider outside the cooper creek organization as a whole like its opportunities, some of which were gained in through operational interaction of various networks supplies and formal institutions. For example market strategies into international markets and also the creation of platform to meet other international partners. A major source of failure into the international market is high barrier entry. Cooper creek can capitalize on the weakness of its major competitor and start differentiating the market if there is any. On the whole accessing coopers creek resources as an industry and also judging or grading it based on the VRIO (Value, Rare, Imitability and Organization) model, it stands a better chance of entering into the international market successfully because it has unique resources which are rare, hard to imitate, its unique brand value and good organizational structure (good network supplies), typically its relationship based approach and its unique wine taste. Again cooper creek once failed in the entry of the Australia market because of wrong entry time (time of devaluation of the New Zealand currency) thus makes it very important to consider economic considerations in the entry of international market. Not only that political situations which also destabilizes market and investment need to be considered. The potential entry markets political history should be examined.eg Government type (dictatorship, democratic, and monarchy).Economic policy of the government, trade policy Diplomatic events in surrounding countries. Furthermore, political context can change for the foreseeable future. For example future government legislation. Social and cultural considerations are also important as they determine the behavior of the market and how they will respond to business. For example, if a business sells a lot of junk and unhealthy food, and the nation is becoming more health conscious then the business will generate less revenue.
Cooper creek has shown immense strategic changes in its course of operation which has enabled it to be successful at various markets evidenced in the export comparative figures. It has created its operation and managed its resources to be very unique and hard to imitate giving it a high competitive advantage in the existing markets and also for new international entry market.
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James E. Rauch,Journal of Economic Literature Vol. 39, No. 4 (Dec., 2001), pp. 1177-1203
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BÂ Â Â Â 60-69
CÂ Â 50-59
F-Narrow FailÂ 40-49
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