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market, With this, these firms have also gone up market in many “new” areas of the
world.
At the same time, the companies have become less and less integrated with other
producers in their area. With increasing vertical integration, all leading companies have
been linked to a significant growth in planting and private sourcing, at least of their
premium, super-premium and ultra-premium wines. With this result, the number of
contracts with other producers has gradually lessened. Some of these producers are now
buying in other valleys - so that there spread of wines (particularly in white versus red)
can be no longer linked to just one valley.
Collaboration between firms in Clusters
Clusters were first written about in 1850 by Marshall as he theorized that firm
agglomeration could cause reduced costs in production due to pools of specialized
workers and a rapid diffusion of knowledge (Gibbon, 2001)
Clusters are important in the Chilean wine sector as although global producers can tell
producers’ consumer demands, Gereffi et al (2005) says there is a strong connection
between incorporation in local networks and innovation to reach a stronger firm position.
Guthey (2008) also argues that these local networks are more important than economic
competition as local learning and interfirm relations can help increase competitiveness by
‘competitive momentum’. Guthey also expresses the importance of the local nature of
clusters. Clusters are created by unique relations and possibilities that occur under certain