AbstractDue her stable economic growth, Chile has been of great importance to the success of South America. Chile has managed to attract high number of local and foreign investor due to the existence of a favourable business environment which is characterized by steady and open market oriented economy. The presence of strong macroeconomic policies, great geographical location, well-established administrative and physical structures, strong cooperate memberships in investment and trade agreements, tariff liberalization and attractive tax policies has led to the rise of Chile in global competitiveness index. However, Chile’s success is at risk due to the entry of other nations into the same market.
This is very risky if Chile does not improve its innovation performance through effective design and implementation of macroeconomic reforms in sectors of human capital, business innovation and the broad governance. Exports are significant to the economic growth due to the small population which translates to low domestics demands. The Chilean wine industry has managed to increase its production from domestic to export levels. Chile is currently enjoying successes in the international markets due to its strategic approach of offering reliable wines at affordable prices.
This paper is a report on the strategic management in Chilean wine industry. It contains the industrial strategic level and the economic, cultural and political factors that determine the establishment and management of business in Chile. Also included in the report is the existing literature of the strategic management in the Chilean wine industry. The report ends by giving the recommendations concerning wine business in Chile. Geography and Overview of ChileChile is located in the Southern South America, west of Bolivia and Argentina, and south of Peru.
It is about 2,880 miles long and is bored by the Andes Mountains in the east and Pacific Ocean to the west. It is ranked 38 worldwide in land mass of 756,102 sq km. HistoryNorthern Chile was under the Inca rule but became Spanish sphere of influence in the 16th century. The central and southern Chile was inhabited by the Mapuche. It was declared independent in 1810 but its decisive victory over the Spanish was attained in 1818. Chile won its present regions by defeating Bolivia and Peru during the 1879-83 war.
PoliticsGood economic policies have been attributed to the steady growth of the country’s economy since 1980s. This has helped Chile secure a commitment to a representative and democratic government. Chile increasingly assumed leadership roles both at regional and international spheres hence attaining its status of a stable and democratic state. Chile continued to realize stability of growth in sounder political climate especially after its free elections of 1990 which lead to the defeat of the then president, Augusto Pinochet. Chile’s Overall Business Environment. Chile’s business environment permits the creation of open markets hence stability of economy.
This is facilitated by the presences of strong financial institutions, high levels of foreign trade, responsible leadership which is recognized both regionally and globally and sound government economic policies. Its well-established institutions with legal framework, free trade agreements and efficient regulatory systems minimizes risks and uncertainties by providing favourable economic and political environment which puts Chile on a better position to attract investors across the world. The foreign investment policies are open and liberal thus facilitating a multitude of business opportunities.
It also provide the investor activities which leads to generation of capital as well as technology necessary for Chile’s economic growth and development (Joelson, 2007).