Characteristics of Business Models, Business Diversification and Price Segmentation Strategies of Wineries in the Wine Route of Baja California, Mexico

Abstract

This study examined the characteristics of business models used by wineries in Baja California, Mexico wine route. It also identified strategies being used regarding price segmentation and business diversification, and how business diversification relates to production performance. The results showed a limited presence in the supermarket channel, vineyard/land and wine-making facilities/machinery being considered as the most valuable resources, a growing tendency of companies having lodging facilities, a low differentiation in key activities performed, high differentiation regarding revenue generation structure, three revenue generation clusters containing the majority of the companies, companies with a diversification strategy outperformed those with single business strategies in regards to case production during a five year period, and the price segments from $251 to $600 Mexican pesos for 750ml bottles of wine being the most popular ones. This study used a non-random sampling technique to collect primary data in the form of surveys and face-to-face structured in-depth interviews. A total of 65 companies, accounting for approximately 55% of the total wine producers in the area, were interviewed during the data 1-month data collection period (July 2018). Out of these 65 companies, 50 provided complete useable data.