Although there is a huge debate on the reasons for internationalization, the strength of brands and branding are not among the most studied aspects in the literature. For companies, brands are valuable assets and branding may be used as a sign of quality leading consumers to repurchase the brand and an increasing market entry barrier for competitors, an important aspect is that branding underpins relational strategies, especially in the wine market. To understand the importance of brands as enablers of international strategies, namely its international positioning, a case study was developed seeking to understand the role of brands in the internationalization of Sogrape, a leading Portuguese company in the wine industry. Analizing Sogrape's main brands, in terms of their performance in national and international markets, it is possible to conclude that branding plays a crucial role in the internationalization of Sogrape, segmentation and positioning strategies being extremely important for synchronizing and leveraging the national market with the outwards expansion of the firm.
TopIntroduction
In the contemporary landscape of international business, complexity has emerged due to the process of globalization. This phenomenon has prompted companies to adopt a variety of internationalization strategies aimed at catering to global markets or aligning their brands with global and multidomestic environments (García Rodríguez, et al., 2018; Khan & Khan, 2021; Ribau et al., 2015).
Organizations are increasingly extending their focus beyond national markets, driven by the pursuit of new targets and potential business prospects. This endeavor involves the process of internationalization, which consists of “…increasing involvement in international operations” (Welch & Luostarinen, 1988, p. 36).
The understanding of internationalization has undergone evolutionary changes over time and can be tailored to the specific industry under investigation. Additionally, it is contingent upon factors such as the age of the firm, its size, management approach, brand type, among others (Ribau et al., 2015; 2018a, 2018b). In essence, internationalization entails heightened participation in international operations, which signifies increasing activities in foreign markets (Calof & Beamish, 1995; Ghauri et al., 2021; Villareal Larrinaga, 2018).
Embracing international expansion presents firms with a distinct opportunity to grow by leveraging their distinctive competencies, capabilities, and brands to capitalize on the added value they generate. When firms successfully enter international markets, they often leverage their unique technological capabilities and market insights to exploit their unique resources. Furthermore, in order to expand their market share on the global stage, they must foster innovation and tailor their brands to the specific markets they intend to serve abroad.
Ribau et al. (2015) offer an evolutionary analysis of main internationalization theories, perspectives, and assumptions, employing a historical lens to illustrate the significance and evolution of the international business landscape over time. Notably, behavioral theories have emerged as a potent framework for elucidating the internationalization process in a prudent and predictable manner.
The process of internationalization can also be linked to the allocation of resources. That is, the decision to enter a new foreign market can be a strategic choice made by top management (Schweizer & Vahlne, 2022).
Among alcoholic beverages, the wine industry holds a position of historical significance. Beyond its economic value, it holds symbolic importance and ceremonial connotations in numerous religions (Swiatkiewicz, 2021). Portugal boasts a rich tradition as a wine producer, notably renowned for Port wines, albeit with low marketing power (Moreira et al., 2013).
Portugal witnessed a remarkable 14% surge in wine production levels in 2021 compared to the previous year, marking the highest recorded increase since 2006 (OIV, 2022). Despite its long tradition in the wine sector, Portuguese companies heavily rely on the market clout of major distributors (Moreira et al., 20215). Although some research has addressed the competitiveness of the wine industry and its driving factors (Mota, Moreira, et al., 2021; Mota, Costa et al., 2021), there are few studies investigating the role of brands in the internationalization process.
Extensive exploration has been undertaken into the motives and catalysts behind firms’ internationalization endeavors (Rienda García et al., 2018). Although the strength of brands has not traditionally been at the forefront, international branding plays a pivotal role in decisions made during the internationalization process, particularly concerning market selection and entry mode choices (Couto & Ferreira, 2017).