The quest to gain a competitive advantage underpinning successful business performance is within the scope of leadership.
We’re all familiar with the view that there’s a big difference between theory and practice. Practitioners deem theorists too slow to offer sound, timeous solutions to solve every day practical problems. Theorists on the other hand think practitioners apply solutions that are theoretically unsound and consequently their problems will at best persist or at worst be aggravated.
While there’s truth to this view and its explanation, the question is how do we bridge the chasm between theory and practice to ensure practitioners thrive while applying relevant, scientific solutions to solve their problems?
Tourism for example has over the past decade been touted as the growth industry across the globe and this trend is expected to continue for the foreseeable future. Tourism in South Africa is generally benefiting from this trend. But wine tourism does not seem to profit equally from this opportunity. Many answers are offered to solve this problem and some may be at least partially true. But what if there’s another, more sustainable solution that’s not immediately obvious?
Tourism and wine tourism
According to the World Travel and Tourism Council (2018), the total contribution of travel and tourism amounted to 8.9% of South Africa’s GDP in 2017. According to Statssa (P0441), South Africa’s GDP amounted to R3 119 983 million in 2017.
The estimated wine tourism earnings amount to R16 billion annually (Vinpro, 2019). Thus wine tourism contributed 5.762% to travel and tourism, and 0.512% to South Africa’s GDP in 2017. Wine tourism’s contribution to both tourism and GDP is small and there’s definitely room for improvement. Moreover, increased earnings from wine tourism can help wine producers enhance their profitability.
According to Vinpro (2019) more than 80% of producers produce wine below the economic sustainable threshold. This means the vast majority of wine producers don’t perform financially better than some referent, such as, for example a rival, implying the absence of a competitive advantage.
In search of competitive advantage
Competitive advantage is the foundation of a sound strategy and the tool leadership uses to achieve business goals by delivering customer value through satisfied employees. The crux of competitive advantage is to offer superior value to customers by executing value chain activities differently or better than your competitors. Customers are the final judges of value and their judgement is subjectively based on experience or the utility derived from acquiring and/or using the product. Businesses must thus ensure their offerings meet their customers’ expectations…
A full version of this article appears in the December 2019 issue of WineLand Magazine. Buy your copy here