THE PERFORMANCE OF U.S. WINERIES IN THE GLOBAL MARKETPLACE

Murray Silverman
Department of Management
San Francisco State University
1600 Holloway Avenue
San Francisco, CA 94132
Phone: 415 338-7489
Fax: 415 338-0501
Email: msilver@sfsu.edu

Sanjit Sengupta
Department of Marketing
San Francisco State University

Richard Castaldi
Department of Management
San Francisco State University

Western Academy of Management Conference, April 2001

The authors gratefully acknowledge a Business and International Education (BIE) grant from the U.S. Department of Education and a matching grant from the College of Business at San Francisco State University in support of this research.

The US wine industry is in the midst of a radical transformation from a largely domestic industry to a global industry. This paper examines the US wine industry's current performance in global markets. Survey questionnaires were sent to every winery in California and the Pacific Northwest published in the Wines and Vines Directory, to tap into their export experiences, intentions, opinions and assistance needs. These wineries account for well over 95% of the wine produced and exported by all US wineries. The excellent 24% response rate adds depth and richness to the findings of this first comprehensive export study of the US wine industry.

The US wine industry is in the midst of a radical transformation which will dramatically affect the landscape of the industry. Until a few years ago the US wine market was largely a domestic industry, with some imports from France, Italy and Spain competing with US wineries. Recently, however, imports have risen to 20% of the US market share, which is seven percentage points above where it was in 1995 (Love 2000). This has been fueled by the tremendous inroads made by Australian and Chilean wines, in particular, into the US market.

The forces of globalization have arrived as evidenced by industry consolidation (e.g. Foster's, and Australian beverage company recently acquired Beringer, a California winery), a maturing and increasingly competitive domestic market, and the move to a more professional (versus family) style of management for many US wineries. The February 2000 naming of Lewis Platt as CEO of Kendall-Jackson winery (former Chairman and CEO of Hewlett Packard) provides an appropriate example. How effectively the US wine industry transforms itself into a strong global player is yet to be determined. This paper will examine the US wine industry's current performance in the global marketplace.

US wine exports have been growing consistently from a base of $137 million in 1990 to $548 million in 1999 (Wine Institute 2000). Also, the US industry enjoyed the highest rate of increased wine exports (19.3%) in 1998 among the major wine producing countries (IVIE International 2000). While this export growth is impressive, US wineries also face increasing threats to their domestic market share due to globalization in the wine industry.

The US domestic market has grown from a retail value of $12.2 billion in 1995 to $18.2 billion in 1999, however, the US market share of importers has also grown during the same period (Wine Institute 2000). For example, during 1995-1999 , Argentina increased the value of their exports to the US by 243% and Chile by 152% (Wine Institute 2000). Since 1995, the unfavorable balance of trade for wine in the US has increased by 78% (Wine Institute 2000).

In terms of international markets, wine is produced commercially in over 60 countries. While each wine producing country's domestic market consumes much of the wine they produce, 23% (by volume) is exported to international markets. The leading wine producers include the 'old world' wineries in France, Italy and Spain. These three countries are also the leading exporters. 'New world' producers, such as the US, Australia, Chile, Argentina and South Africa have been making both production and export inroads globally over the past few decades. Illustrative market shares of the world export market by different countries in 1999 follow (IVIE International 2000):

The US has only 4.2% (by volume) of the world export wine market, while producing 8% (by volume) of the wine produced in the world (Wine Institute). Furthermore, the US wine industry exports only 13% of the wine it produces, while other countries have more intensely developed their export markets. For example, France, Italy and Spain all export more than 25% of the wine they produce, Australia exports over 40% and Chile over 80% of their production (Wines and Vines, July 1999). One might argue that these countries export more intensively because of the small size of their domestic market. While this may be true, US wineries run the risk of losing market share at home to those exporters who have been making inroads into the US market. A continued focus on the domestic market may place the US wine industry at a long-term disadvantage in developing the requisite skills for competing in the increasingly competitive global market place.

There is also a geopolitical dimension to this industry. Tariffs and trade barriers play a pivotal role in obstructing US wineries' access to various country markets. As these barriers are reduced under the auspices of the World Trade Organization, greater export opportunities will open up. US wineries must be positioned competitively to exploit these new opportunities.

In light of these global competitive pressures, the purpose of this study is to assess the current export activity and performance of US wineries. Assistance providers and winery managers can use the results of this study to improve the export performance of US wineries. The specific objectives of the paper are:

1. Develop a profile of exporting wineries (size, export experience, markets
    and products).
2. Assess the performance of export programs in US wineries including the
    identification of key success factors.

The second objective reflects the exploratory nature of this study. This study will explore the correlates of export performance as a prelude to eventual development of a richer model that might explain why some winery export programs are more successful than others.

While there is a wealth of country-level macro data collected regarding levels of importing and exporting activity in the wine industry, there have not been any previous published studies focusing on the export experience and performance of US wineries. Thus, this study will be uniquely valuable to the industry. This study will also contribute to the extant export literature, as the value of single industry studies is being increasingly recognized (Silverman, Castaldi, Sengupta 1999; Dess, Ireland and Hitt 1990). Further, the former editor of he Journal of International Marketing noted that "given the diversity of approaches to globalization, it is important for researchers to carry out investigations that target specific industries" (Cavusgil 1997 p.3).

Along with developing a profile of US exporting wineries, this study also intends to identify the factors related to winery export program effectiveness. The measurement of export effectiveness has been addressed with increasing frequency in the literature due to a lack of consensus regarding how it should be measured (Aaby and Slater 1989; Cavusgil and Zou 1994). Moreover, inconsistent findings regarding the antecedents of export performance have been attributed to the different export performance measures used across studies. Walters and Samiee (1990) found that the variables correlated with small firm export success vary according to the dimension of export success being examined. One widely accepted measure of export performance is exports as a percent of sales. Other measures have focused on profitability, growth, market share, strategic position, etc. Different measures reflect variations in management intents. As an example, an exporting firm focusing on growth or strategic position may be willing to sacrifice profits in the short term. Thus, it is important to use multiple measures of export performance to fully capture the richness and complexity of this construct.

Export commitment has been well established as one important determinant of export success (Cavusgil and Kirpalani 1993). Stump, Athaide and Axinn (1998) point out that commitment has both an attitudinal dimension (beliefs and perceptions that are supportive of or barriers to exporting) and behavioral components (the commitment of resources in the form of staff, travel, etc.) While these two dimensions are related they may not both be present in the same direction calling for different interventions to improve export effectiveness. One specific attitudinal aspect of export commitment that has received attention as a determinant of export commitment is the priority placed on exporting by management (Axinn, Noordewier and Sinkula 1996). In terms of behavioral aspects of export commitment, Beamish, Karavis, Goerzen and Lane (1999) found that firms that make a commitment to support exports through the formation of a separate export unit within their organization, significantly outperform firms that treat exports as part of their domestic business.

Intermediary effectiveness has also been linked to export performance (Sengupta, Castaldi and Silverman 2000; Moini 1995; Reid 1987; Rosson and Ford 1982). The evidence is clear that the success of an export program in an overseas market rests, in large part, on the ability of the exporter to develop and maintain effective relationships with agents, wholesalers and retailers who operate in that market. Also, studies have attempted to identify the factors that underlie effective intermediary relationships (Johnson and Raven 1996). A wide variety of terms have been used in the literature to describe the antecedents of channel relationships including communication quality (Mohr, Fisher and Nevin 1990), trust, cooperation, absence of opportunistic behavior, stability, fairness, commitment and communication intensity (Johnson, Sakano, Cote and Onzo 1993; Johnson and Raven 1996). Integrity and goodwill are important dimensions of trust (Mayer, Davis and Schoorman 1995). In this study we investigate the relationship between intermediary effectiveness and export performance as well as the relationships between intermediary effectiveness and communication quality, integrity and goodwill.

Lastly, the literature is mixed in terms of the role that firm size plays in relation to export effectiveness. Since a majority of the exporting wineries in this study would be classified as small or mid-sized, one might expect that they might be limited in terms of their ability to commit resources to exporting and that they would lack sufficient leverage with intermediaries compared with larger wineries. However, these conceptual arguments have not been supported with any consistency in previous studies (Czinkota and Johnson 1983; Cavusgil 1984). The more recent study by Stump, et al (1998) found that firm size did not play a significant role in explaining the relationship between export commitment and export performance. We investigate the relationship between winery size and export performance in this study.

Under the auspices of a grant from the US Department of Education, the authors initiated, in the Fall of 1999, a research project intended to assist the US wine industry in their export activities. The industry provided its full support to the project through its WineVision initiative, an industry wide effort to improve the export effectiveness of US wineries.

The US wine industry is comprised of approximately 1500 wineries. The industry, however, is highly concentrated with the top 10 wineries accounting for 70% (by volume) of U.S. production. Wine is produced in every state except Alaska. California dominates the US wine industry in many ways. California has over 800 wineries and accounts for more than 90% of the wine produced and exported by US wineries. Northwest wineries (Washington, Oregon and Idaho) comprise approximately 200 wineries and are developing an export presence as well as excellent reputation for quality wines.

Ten wineries account for more than 89% of exports (Gomberg, Fredrikson Report 2000). However, an annual wine industry directory (Wines & Vines 1999) shows that about 50% of the wineries export their products. Many of these wineries may only periodically export a small number of cases, and thus, they do not have a full-fledged export program. The leading US exporter by volume is E&J Gallo, accounting for about half of US exports and more than four times the volume of their nearest export competitor, Canandaigua (Gomberg, Fredrikson Report 2000). E&J Gallo exports approximately 13% of their total production. While most exporting US wineries export less than 20% of their production, Wente Vineyards is a notable exception. Wente has made exporting a cornerstone of their winery’s long term strategy, exporting 60% of their production to 147 country markets (Sinton 1999).

The study was designed to obtain the following information from each winery: (a) the length of time they have been exporting and their current level of export activity, (b) data on their export products and markets, (c) the performance of their export program, (d) the nature of their export related investments and activities, and (e) their attitudes and perceptions relating to export commitments and to intermediaries.

Sampling Frame
An annual directory of US wineries (Wines &Vines 1999 Directory and Buyers Guide 1998) was used to generate our sampling frame. A list of all the wineries in California, Oregon, Washington and Idaho was compiled. These 1012 wineries accounted for well over 95% of the wines produced and exported by US wineries, making this a comprehensive sampling frame.

Based on field interviews with export personnel and industry association executives, and a review of the relevant literature, we designed, developed and pre-tested two survey questionnaires, one version for exporters and another one for non-exporters. In March of 1999 both surveys were sent to all 1012 wineries with a cover letter explaining that they should complete the exporter's version if they had exported in the last three years. The cover letter also explained that both WineVision and the authors' university supported this study. Thirty-­four surveys were returned as undeliverable, resulting in a reduced sampling frame of 978 wineries. Wineries that did not return their survey by the specified date were sent a fax under the signature of the CEO of Fetzer Vineyards, who is a WineVision ‘champion’, asking them to complete the survey. The number of usable returned surveys was 238, representing 103-non exporters and 135 exporters. Overall this represents a 24% response rate. The results presented in this paper relate only to the exporters.

Operationalization of Variables
In order to address this issue of how to measure export performance, a study by Zou, Taylor and Osland (1998) developed a three factor measurement model of export performance: the EXPERF scale. The three factors were Financial Export Performance (profitability, sales volume and growth), Strategic Export Performance (global competitiveness, strategic position and global market share) and Satisfaction with Export Venture (export venture success, satisfaction with export performance and meeting export venture expectations). The three-factor EXPERF scale had both convergent and discriminant validity in their study. We adopted the same 9 measures of export performance as Zou, Taylor and Oslund (1998). Factor analysis of these 9 items results in the same three factors comprising the EXPERF scale (Exhibit 3). We had an additional, objective measure of export program performance, percentage of revenues from exports (Exhibit 1).

The survey instrument included 22 Likert scale items relating to export commitment. The Likert scale items were factor analyzed, resulting in three factors (Exhibit 4), labeled as Resource Commitment, Management Priority for Domestic Market, and Business Barriers. Consistent with the findings of Stump, Athaide and Axinn (1998), these factors developed along either behavioral or attitudinal lines.

Resource Commitment, reflects the behavioral component of export commitment, while the other two factors, Management Priority and Business Barriers, reflect attitudinal components. Resource Commitment included items relating to the "adequacy of budgets for international travel" and "participation in trade shows", the development of “accounting systems to track export profitability" and whether the winery "actively pursued overseas business". These items reflect behavioral commitments . Management Priority on the other hand relates to the importance of the domestic market relative to exports. A higher score on this factor indicates a higher priority to the domestic market relative to exports. Similar to Management Priority, Business Barriers is based on perceptions rather than behaviors and a higher score indicates that exporting is perceived as difficult or unfavorable for the winery. Thus, a winery may perceive that it is "extremely difficult to find the right agents or distributors in export markets" or that "transportation costs make profit margins unattractive in export markets", but keep in mind that these are only their perceptions. Axinn found that manager’s perceptions do in fact influence export performance (Axinn 1988).

We asked exporting wineries to evaluate the intermediary in their primary export country market on three items. These items, when factor analyzed, resulted in a single factor labeled Intermediary Effectiveness (see Exhibit 5). We also asked wineries to evaluate different aspects of their relationship with this intermediary using 14 Likert scale items. These items, when factor analyzed, resulted in three factors (see Exhibit 6) that seem to be logical antecedents to intermediary effectiveness. Communication Quality (Mohr, Fisher and Nevin 1990) reflects the effectiveness of communication between the exporting winery and the intermediary. Integrity and Goodwill both reflect the exporter's trust in the intermediary (Mayer, Davis and Schoorman 1995). Integrity reflects the exporter's perception that the intermediary discharges its obligations reliably and honestly. Goodwill reflects the exporter's belief that the intermediary will look after the interests of the exporter beyond contractual obligations.

Finally, winery size is measured by the number of cases a winery produces on an annual basis (Exhibit 1).

This section of the paper will present the results of the study organized according to the following six areas: (a) Profile of exporting wineries (b) Export markets and products (c) Export program performance (d) Export commitment (e) Intermediary effectiveness and (f) Correlates of export performance.

Profile of Exporting Wineries
A majority of the 133 exporting wineries (60%) have been in business for at least 16 years. (See Exhibit 1) Only 8.3% have been in business for 5 years or less, suggesting that exporting is more likely to be undertaken after wineries gain experience domestically. On the other hand, size does not seem to be a barrier to exporting. Wineries selling less than 25,000 cases annually are considered small in this industry, yet they represent 55% of the exporting wineries. A wide range of export experience is represented in the sample. Almost 30% have been exporting for 5 years or less and 42% for over 10 years.

As previously discussed US exporters derive only a small percentage of their revenues from exports, and this is represented in the sample. Over 80% of the wineries depend on exports for less than 10% of their sales. This is in sharp contrast to Australia, Chile and other producing countries that derive a majority of their revenues from exports. The exporting wineries have diversified their country markets with 84% selling in more than one country and 60% to four or more countries. Finally, most of the exporting wineries (close to 90%) grow some of the grapes that go into making their wines. However, only 49% of the wineries grow at least half of their grapes in their own vineyards.

Export Markets and Products
Canada and the United Kingdom (UK) are the dominant markets for US exporters in our sample. (See Exhibit 2) The US Department of Commerce reported that in 1998, the UK, Japan and Canada were the top three export markets (in dollar value) for US exporters, accounting for 61.4% of US exports. Consistent with this, Canada, the UK and Japan accounted for 66.6% of wine export market revenues in our sample.

There also seems to be an entry pattern for US exporters, wherein the UK and Canada are the first or second markets entered. Fifty nine percent of the exporters chose one of those countries as their first market to enter and 50% chose one of these as the second market to enter. These markets may be chosen as sequential entry paths because they are English speaking, affluent countries, which don't produce much wine. In addition, Canada's proximity may be seen as a benefit for US wine exporters.

After travelling through distribution channels, exporter's wines were being sold in restaurants and hotels to a greater extent than through retail stores. Lastly, the wines being exported by US wineries tend to be premium ($7-14 per bottle), ultra premium ($14-25) and luxury (over $25) wines.

Export Program Performance
In terms of financial performance and strategic performance, the mean factor scores of 2.70 and 2.66 respectively (Exhibit 3), indicates that many wineries are not very satisfied with those aspects of their export programs. For example, on a 5 point scale, only 29% of the wineries strongly agreed or agreed that their export program "has been very profitable". Forty-six percent were neutral and 25% disagreed or strongly disagreed. While the proportion of wineries that disagree that their export program “has been very profitable” is not extremely large, the relatively small proportion that agree and the large proportion of neutrals indicates there is plenty of room for improvement in export program performance as it relates to profitability.

The situation was more positive in relation to subjective measures of satisfaction with export program performance, as the mean factor scores on these satisfaction measures was 3.14 (exhibit 3). This indicates that, even though certain financial or strategic intents are not being met, their export programs are meeting other managerial objectives.

Finally, Exhibit 1 shows that the percentage of revenue from exports is relatively low for a large proportion of wineries.

Export Commitment
As shown in Exhibit 4, Export Commitment has three dimensions, Resource Commitment, Management Priority for Domestic Market, and Business Barriers. The mean factor score for Resource Commitment was only 2.79, indicating a tendency on average to under commit resources to exporting. For example, only 40.3% of the wineries felt that their export budget was “sufficient to cover international travel” and only 35.3% said their budget was “sufficient to cover international trade shows”. Trade shows and visits to country markets are widely acknowledged by industry experts to be critical to building export programs. Management Priority for Domestic Market had a mean factor score of 2.67 which is quite low. This indicates that managers in exporting wineries, on average, do place a priority on their export business. For example, only 38.2% said that “exporting is not a high priority for us”. Business Barriers had a mean factor score of 3.04, representing an almost even split in the number of wineries that perceived that exporting is unattractive.

In addition to the Likert scale items, a number of questions were asked to ascertain specific information regarding each winery's export related organizational structure. In terms of export related organizational structure, only 12% of the wineries had a formal export department, 35% had at least one employee formally assigned to exports and 53% had no employee formally assigned to exports. In 81% of the wineries, the person in charge of exports is the same individual in charge of domestic marketing and sales.

Intermediary Effectiveness
Effective intermediary relationships have been found to be critical to high levels of export performance. In their primary export market, most exporting wineries used either an agent (54.5%) or an importer/wholesaler (40.2%). Only 5.3% went directly to retailers. We asked exporting wineries to rate their experience with their intermediary in their primary export country market on three scales (see Exhibit 5) and these scales resulted in a single factor labeled Intermediary Effectiveness which has a mean factor score of 3.69. Thus, it appears that exporting wineries have very good relationships with the intermediaries in their primary country markets.

Correlates of Export Performance
Four measures of export performance have been introduced in this study: the three export performance factors relating to financial, strategic and satisfaction with the export program (Exhibit 3) and the fourth being "exports as a percent of sales". Exhibit 7 shows the correlations of all four performance measures with the three export commitment factors. Exhibit 8 shows correlations of the performance measures with Intermediary effectiveness and the three intermediary relationship factors. Both correlation matrices also include winery size as a variable to see if it might play a role in explaining export performance.

In terms of export commitment, Resource Commitment has a positive and significant correlation with all four measures of export performance. The correlations are all relatively high, ranging from 0.39 to 0.62, indicating that sufficient levels of resource commitment to exporting may be critical to high levels of export performance. Management Priority to Domestic Market also has high and significant negative correlations with export performance, ranging from -0.44 to -0.66. The negative coefficient indicates that higher levels of export performance are correlated with lower levels of priority to domestic market or higher levels of priority to exporting. Business Barriers also as relatively high and significant correlations with export performance, ranging from –0.25 to –0.54. Thus, the perception that exporting is difficult or unattractive may be related to lower levels of export performance.

In terms of intermediary relationships, Intermediary effectiveness has a statistically significant, strong positive correlation with all four performance measures, with coefficients ranging from 0.34 to 0.61. Thus, as expected, intermediary effective ness may be an important driver of export performance. The three factors - Communication Quality, Goodwill and Integrity - are all significantly correlated with both the export performance measures and Intermediary Effectiveness. The correlations with Intermediary Effectiveness are particularly high, ranging from 0.60 to 0.77, supporting, the possibility they are antecedents to Intermediary Effectiveness.

Finally, winery size has a significant, but small correlation coefficient (0.18 in both cases) in relation to strategic and financial measures of export performance measures. In terms of ‘satisfaction’ with export program performance and export as a percent of sales, there is no significant correlation. Perhaps the mixed results in previous studies reflect the use of only one of the various measures of export performance.

A number of US wineries seem to be competing effectively in the global marketplace. However, there is a sizable segment of exporting wineries, which are not faring as well as their counterparts in international markets. The large percentage of wineries responding in the neutral category of our measures of overall export performance should be perceived as a reservoir of potential export programs on the cusp of success.

Resource commitment to exporting appears to be on the low side for a majority of exporters. Since resource commitment is a strong correlate of export performance, this could partially explain why export performance measures were not rated higher by many wineries. Intermediary Effectiveness appears on average to be very good, and is less likely to be a contributor to lower overall levels of dissatisfaction with exporting. Also, winery size does not seem to be a major force in accounting for differences in export performance.

The correlation matrices in Tables 7 and 8 indicate that both export commitment and Intermediary Effectiveness are strong correlates of export performance. The relationship between these factors and export performance is particularly strong in light of the significance of the coefficients across all four measures of export performance. Wineries that (1) have higher levels of resource commitment, (2) place a higher level of management priority on exporting and (3) do not perceive potential export impediments as barriers are more likely to have higher performing export programs.

Intermediary Effectiveness is positively related to the performance of export programs. The relationship between the intermediary and the winery seems to be affected by factors such as communication quality, integrity and goodwill. Since these factors are much more highly correlated with Intermediary Effectiveness than export performance, they could be antecedents of intermediary performance.

The results of this study have both research and applied implications. In terms of the former, this study makes several contributions to the export related literature. In terms of the latter, the results of this study have practical implications for service providers intending to improve export performance in the wine industry.

Research Contribution
This study contributes to the literature on export performance. The factors in the EXPERF scale (Zou, Taylor and Osland 1998), were validated for the wine industry, and the scale was shown to be useful in delineating the importance of different performance measures on export performance. The factor analysis of export commitment survey items in this study sorted into behavioral and attitudinal factors, lending support to the conceptual framework of Stump, Athaide and Axinn (1998). Also the positive relationship between export performance and the two factors - export commitment and Intermediary Effectiveness – reinforces those relationships as previously established in the literature. Finally, this study adds perspective to the ongoing debate regarding the importance of size as a determinant of export performance (Stump, et al 1998). This study indicates that size may be important in influencing financial performance and strategic performance, but it may not be a factor affecting subjective managerial measures of satisfaction with export program performance.

Implications for Assistance Providers
The US wine industry’s WineVision initiative is intended to increase international market share for the industry and to raise export performance at the winery level. As an industry initiative respected by a large number of wineries and trade associations nationwide, WineVision is in a position to change the ‘mindset’ of many wineries who do not see export markets as a management priority and whose perceptions of export barriers reduces the effectiveness of their export efforts. WineVision can create more of a long-term perspective regarding the threat of global competitors who are slowly eroding US dominance in their domestic markets.  WineVision can accomplish this through conferences , workshops, and publications from respected industry leaders.

In addition to WineVision’s efforts, public sector assistance providers can enhance export effectiveness in the wine industry. They can play a role in helping to increase resource commitment to exporting, especially in relation to small and mid-size wineries. Since insufficient resource commitment is related to lower levels of export performance, service providers may be able to help subsidize international visits and attendance at trade shows. Setting up reverse trade missions may also be effective.

While service providers can play an important role in increasing the global competitiveness of US wineries, the wineries themselves can improve their export program performance through their own efforts focusing on increasing their commitment to exports and through choosing and maintaining effective relationships with the appropriate intermediaries.

Aaby, N.E., and Slater, S.F. (1989), “ Management Influences on Export Performance: A Review of the Empirical Literature 1978-1988”, International Marketing Review, 6(4), 7-26.

Axinn, C. (1988), Export Performanmce: Do Managerial Perceptions Make A Difference?”, International Marketing Review, Summer, 61-71.

Axinn, C., Noordewier and Sinkula (1996), “Export Strategies and Export Performance: An Empirical Investigation of a Products/Market Typology”, Advances in International Marketing, (Ed.) S.T. Cavusgil, JAI Press Inc., 27-58.

Beamish, P., Karavis, L., Goerzen, A. and Lane, C. (1999), “The Relationship Between Organizational Structure and Export Performance”, Management International Review, 39, 37-54.

Cavusgil, S.T. (1984), “Organizational Characteristics Associated with Export Activity”, Journal of Management Studies, 21(1), 3-22.

Cavusgil, S.T. and Kirpalani, V.H. (1993), “Introducing Products into Export Markets: Success Factors”, Journal of Business Research, 27, 1-15.

Cavusgil, S.T. and Zou, S. (1994), “Marketing Strategy Performance Relationship: An Investigation of the Empirical Link in Export Market Ventures”, Journal of Marketing, 58 (1), 1-21.

Cavusgil, S.T. (1984), “Differences Among Exporting Firms Based on their Degree of Internationalization”, Journal of Business Research, 12, 195-208.

Czinkota, M.R. and Johnson, W.J. (1983), Exporting: Does Sales Volume Make A Difference”, Journal of International Business Studies, 14, Spring/Summer, 147-153.

Dess, G., Ireland, D. and Hitt, M.A. (1990), “Industry Effects and Strategic Management Research”, Journal of Management, 16 (1), 7-27.

“Gomberg, Fredrikson Report”, Gomberg, Fredrikson & Associates, 703 Market Street, Suite 1602, San Francisco, CA 94103.

IVIE International (2000), "California Wine Export Program: United States Wine Exports, Imports, and Balance of US Wine Trade 1999," IVIE International 7060 Fairway Place, Carmel, CA 93923.

Johnson, J.L., Sakano, T., Cote, J.A. and Onzo,N. (1993), “The Exercise of Interfirm Power and Its Repucussions in US-Japanese Channel Relationships”, Journal of Marketing,, 57, April, 1-10.

Johnson, J.L. and Raven, P.V. (1996), “Relationship Quality, Satisfaction and Performance in Export Market Channels”, Journal of Marketing Channels, 5, (3/4).

Love, John M. (2000), "US Wine Producers Face Increasing Competition," Wine Business Monthly (June), 30-33.

Mayer, R.C., J.H. Davis and F. D. Schoorman (1995), "An Integrative Model of Organizational Trust," Academy of Management Review, 20, 3, 709-734.

Mohr, Jakki J., Robert J. Fisher and John R. Nevin (1996), “Collaborative Communication in Interfirm Relationships: Moderating Effects of Integration and Control,” Journal of Marketing, 60 (3), 103-115.

Moini, A.H. (1995), “An Inquiry into Successful Exporting: An Empirical Investigation Using a Three Stage Model”, Journal of Small Business Management, July, 9-25.

Reid, S.D. (1987), “Export Strategies, Structure and Performance: An Empirical Study of Small Italian Manufacturing Firms” in Managing Export Entry and Expansion, (Ed.) P.J. Rosson and S. Reid, NewYork: Praeger, 335-357.

Sinton, Peter (1999), "California Wines Quenching in the World, Exports from the state have doubled in the past 5 years," San Francisco Chronicle (July 23).

Sengupta, S., Castaldi R. and Silverman M. (2000), "A Dependence-Trust Model of Export Alliance Performance in Small and Medium Enterprises", Journal of Transnational Management, 5 (4), forthcoming.

Silverman, M., Castaldi, R. and Sengupta, S. (1999), “Towards A Single Industry Model for Government Export Assistance Programs”, 44th ICBS World Conference, Naple, Italy, June.

Stump, R.L., Athaide, G.A. and Axinn, C. (1998), “The Contingent Effect of the Dimensions of Export Commitment on Export Financial Performance: An Empirical Examination”, Journal of Global Marketing, 12 (1), 7-25.

Walters, P. and Samiee,S. (1990), “A Model for Assessing Performance in Small US Exporting Firms”, Entrepreneurship Theory and Practice, 15 (2), Winter, 33-50.

Wine Institute (2000), "Another Record for US Wine Exports: $548 million," www.wineinstitute.org/communications/statistics/exports99.htm, Wine Institute, 425 Market Street, Suite 1000, San Francisco, CA 94105.

Wines & Vines 1999 Directory and Buyers Guide (1998), Volume 79 (December), The Hiaring Company, San Rafael, CA.

Zou, S., Taylor, C.R. and Osland, G.O. (1998), “The EXPERF Scale: A Cross National Generalized Export Performance Measure”, Journal of International Marketing, 16 (3), 37-58.

- Mean factor score is simple mean of item scores, each item being a 5 point likert scale going from
1 = strongly disagree to 5 = strongly agree. Sample size = 133 exporting forms.

	1	2	3	4	5	6	7	8
1. Financial     Performance	1.00
2. Performance     Satisfaction	0.66**	1.00
3. Strategic     Performance	0.75**	0.60**	1.00
4. Exports as %     of Sales	0.51**	0.39**	0.48**	1.00
5. Resource     Commitment	0.55**	0.39	0.62**	0.50**	1.00
6. Management     Priority	-0.64**	-0.44**	-0.66**	-0.50**	-0.63**	1.00
7. Perceived     Barriers	-0.45**	-0.54**	-0.35**	-0.25**	-0.28**	0.47**	1.00
8. Size of     Winery	0.18**	0.06	0.18**	0.02	0.25**	-0.15*	-0.09	1.00

N = 133                  ** = P < 0.05

 

Exhibit 8

Export Performance Correlations
With Intermediary Factors

	1	2	3	4	5	6	7	8	9
1. Financial     Performance	1.00
2. Performance     Satisfaction	0.66**	1.00
3. Strategic     Performance	0.75**	0.60**	1.00
4. Exports as %     of Sales	0.51**	0.39**	0.48**	1.00
5. Intermediary     Effectiveness	0.41**	0.61**	0.34**	0.35**	1.00
6.Communication     Quality	0.29**	0.47**	0.23**	0.33**	0.77**	1.00
7. Goodwill	0.20**	0.35**	0.21**	0.28**	0.60**	0.54**	1.00
8. Integrity	0.29**	0.42**	0.27**	0.33**	0.73**	0.65**	0.71**	1.00
9. Size of Winery	0.18**	0.06	0.18**	0.02	-0.03	0.05	-0.09	-0.06	1.00

N = 133                  ** = P < .05