The Rioja Industrial District: Wine Production and Economic Development - Prof. Montero - Ejercicios de Administración de Empresas

CASE STUDY: LA RIOJA

1. Does the Rioja DOC fulfill the necessary conditions to consider that this group of

companies and institutions constitute an industrial district?

The Rioja DOCa fulfills the necessary conditions to be considered a group of companies

and institutions that make up an industrial district. DOCa Rioja is an industrial district

centenary around wine, being the first and only denomination of Spain with this rank.

An industrial district is defined as "a large group of companies and related institutions,

related to the same economic activity and located in a determined geographical

environment".

For this reason, in the Rioja DOC we can find:

• Companies that belong to the industrial sector that identifies it

The fundamental nucleus of Rioja, is formed by approximately 19,000 wine growers and

595 wineries with bottler registration.

- Winemakers: there is a great predominance of the minifundio and of winegrowers not

associated to any cooperative society, differentiating three types of agents: independent

winegrowers, independent growers-growers, and creative wineries.

- Wineries: in recent years, there has been an increase in the number of wineries with bottler

registration and the number of cooperatives and breeders. However, the number of store

owners has declined and the number of growers has remained stable. In addition, a majority

of wineries coexist, many of them family, of small size, together with large corporations that

integrate several wineries with interests in different Denominations of Origin and even in

other areas of activity.

• Institutions that support the activities of these companies

There are more than 100 auxiliary companies, whose main activity is directed to facilitate

the elaboration and commercialization of the wine.

- They are those that provide factors and services that are decisive for the operation of the

main activity, since the proximity of suppliers and users allows both to have a more fluid

communication, a faster flow of information and a constant exchange of information ideas

and innovations.

• Companies in the industrial sector: manufacturers of machinery, barrels, containers,

capsules, labels.

• Companies in the service sector: oenological and legal advice, marketing

consultants, specific software for wineries.

• Other companies that despite not belonging to this area of activity, however, if they

are related in any way with the companies of the wine industry.

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CASE STUDY: LA RIOJA

Does the Rioja DOC fulfill the necessary conditions to consider that this group of companies and institutions constitute an industrial district?

The Rioja DOCa fulfills the necessary conditions to be considered a group of companies and institutions that make up an industrial district. DOCa Rioja is an industrial district centenary around wine, being the first and only denomination of Spain with this rank.

An industrial district is defined as "a large group of companies and related institutions, related to the same economic activity and located in a determined geographical environment".

For this reason, in the Rioja DOC we can find:

Companies that belong to the industrial sector that identifies it

The fundamental nucleus of Rioja, is formed by approximately 19,000 wine growers and 595 wineries with bottler registration.

Winemakers: there is a great predominance of the minifundio and of winegrowers not associated to any cooperative society, differentiating three types of agents: independent winegrowers, independent growers-growers, and creative wineries.
Wineries: in recent years, there has been an increase in the number of wineries with bottler registration and the number of cooperatives and breeders. However, the number of store owners has declined and the number of growers has remained stable. In addition, a majority of wineries coexist, many of them family, of small size, together with large corporations that integrate several wineries with interests in different Denominations of Origin and even in other areas of activity.
- Institutions that support the activities of these companies

There are more than 100 auxiliary companies, whose main activity is directed to facilitate the elaboration and commercialization of the wine.

They are those that provide factors and services that are decisive for the operation of the main activity, since the proximity of suppliers and users allows both to have a more fluid communication, a faster flow of information and a constant exchange of information ideas and innovations.
- Companies in the industrial sector: manufacturers of machinery, barrels, containers, capsules, labels.
- Companies in the service sector: oenological and legal advice, marketing consultants, specific software for wineries.
- Other companies that despite not belonging to this area of activity, however, if they are related in any way with the companies of the wine industry.

These include the various official bodies that regulate, control and plan production and marketing, as well as other institutions such as export groups, universities, research centers, etc.

There are two essential organisms in the operation of the Rioja DOC:
- Regulatory Council of the Denomination of Origin Rioja.
- Interprofessional Organization of Rioja Wine.
1. What are the advantages that are derived for each one of the agents of the district? Analyze the relationships of competence-cooperation among different agents of the district.

In general, the advantages for all agents in the district are that they are all favored considerably by belonging to a district from several factors. The most relevant are:

Increased productivity. The ease of access to certain specialized resources that the geographical proximity makes possible and that otherwise would be very difficult or expensive to obtain.
Procurement: the existence of suppliers in the district implies a decrease in after-sales service time and eliminates costs of delay or transportation.
Human resources: There is a highly specialized labor market in La Rioja, which includes workers with high levels of training and experience, such as winemakers.
Specialized information: to be in the same geographic space, commercial, personal and social ties are established, for all agents of the district. In this way, all its members benefit quickly, resulting in an increase in productivity for all.
Infrastructure: In order to control quality throughout the entire process in recent years, many wineries have bought or extended the extension of their vineyards to ensure the constant quality of the raw material, so the level of investment destined to the building of new wineries and to the improvement of facilities and equipment, is an advantage for the DOCa Rioja.
Stimulating innovation. Although Rioja DOCa was officially recognized in 1926, the permanent concern of this land for wine is historical. That is why, from its origins to the present, a great stimulus to innovation has always prevailed through different decrees and regulations, such as the one created in 1925 by the Regulatory Council. This innovation is being reflected in wine tourism, which is an advantage for the whole district.
Creation of new companies. The existence of the district, favors the formation or entry of new companies. In this sense we can mention other companies as: export groups, universities, etc.

Competence-cooperation relations between the different agents of the district are complementary between them as long as that district is successful. In the case of the Rioja DOC, symbiotic relationships arise, since they favor all members, and that the activities and capacities of the agents serve as mutual support in such a way that they pursue the common

The Rioja Industrial District: Wine Production and Economic Development - Prof. Montero, Ejercicios de Administración de Empresas

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CASE STUDY: LA RIOJA