Firm Creation, Firm Evolution and Clusters in Chile’s Dynamic Wine Sector: Evidence from the Colchagua and Casablanca Regions



Introduction

Since Chile’s adoption of outward orientation, the country has converted itself into the
fourth largest producer in exports volume and fifth large producer in export value
(ODEPA, 2005 & Olavarria et al, 2008). It has increased its share in the predominant
markets, shown by its increase in shelf space in the U.K supermarket (Gwynne, 2008c).
The study of how Chile changed around its wine sector in a short space of time (exports
only really started in the 1990’s) is of highest importance, as it is evident this semi-
peripheral country has fought its way into the competitive global value chain. I will study
the changing periods of wine history in Chile along with firm creation and the strategic
evolution of firms. This will examine in particular the record of process upgrading and
upgrading in marketing and branding. An analysis of how these firms evolved will
investigate how the Chilean wine sector has gained its success in the global market.

Finally, a study of clusters in Chile shall be carried out to show the importance of the
firms studied in creating economic growth not just for individual firms but also for the
economy of an area.

In order to carry out this study two valleys shall be examined. The first is that of the
highly successful Colchagua valley in Chile’s sixth region and Casablanca in the fifth
region. It is the second most planted region in Chile (Olavarria et al, 2008) and arguably
produces the highest quantities of quality wines in Chile. Casablanca, on the other hand it
is a relatively young valley, with very little planting of grapes till the early 1990s. It is an
example of the extension of traditional wine producing regions in Chile with land under
grapes increasing 164% between 1998 and 2006 (Wines of Chile, 2008).



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