***No plagiarism*** It must be less than 30% match on authenticity report.***PLEASE DO NOT ACCEPT THIS ASSIGNMENT IF YOU CANNOT MEET THE DEALINE OF 9:00 AM ON 3/19/2018 CST.***Assignment: Conducting a

A Review of the Professional and Academic Literature

Ima Student

Walden University

A Review of the Professional and Academic Literature

The purpose of this paper is to provide a literature review of my proposed study. The purpose of my qualitative case study is to explore what value-added strategies used by owners of small farm winery operations to increase profits and promote sustainability. A critical analysis and synthesis of the literature provided the context and theoretical framework for the research relating to value-added strategies and the application by small businesses (Saunders, Lewis, & Thornhill, 2016). The literature review is foundational in understanding the phenomena surrounding small farm wineries operators’ success and sustainability. Also, the intent of the literature review is to identify knowledge gaps and illustrate the justification to the research aim (Saunders & et al., 2016).

The literature review will consist of peer-reviewed articles, authoritative books, and dissertations relating to the topic of small businesses, agritourism, and wine industry in the United States and other countries. The research design of selected literature included both quantitative and qualitative research methods. The primary databases used in this literature review included ProQuest, ABI/INFORMS Global, and Walden University online library resources. Key search terms for conducting research for the literature review included small businesses, agriculture, wine industry, quantitative research, and qualitative research or a combination of keywords.

Table 1

Source of Data for Literature Review

___________________________________________________________________________

Literature Review Source Content

___________________________________________________________________________

Total Within 5 %

Years of Expected (Within 5 Years

Total Graduation Date of 2019)

Peer-reviewed journals 6 2 33%

Dissertations 1 1 100%

Books 1 1 100%

Total 8 4 50%

The exploration of small agricultural operations and success factors to their profitability exist in a variety of research studies. Likewise, studies in the wine sector aim to identify factors contributing to economic success for small farm winery operations. One could categorize the success of small agricultural operations as the continuation of the enterprise through challenging economic times to realize their strategic objectives (Petlina, 2016). Many opportunities exist for operators of small farm wineries to increase profits and sustainability. A lack of established value-added strategies by operators may limit pursuing specific opportunities thus hindering profitability and sustainability.

Persson (2013) suggested the success of U.S. farms is dependent on supplement income sources but barriers limit choices and profitability of income supplementation sources (Persson, 2013). Operators of small farm enterprises must prioritize limited resources to viable and profitable endeavors. An analysis of U.S. farmers indicated the highest priority on supplement income was on government subsidies, the sale of core products, rental income, and insurance (Persson, 2013). Sale of other products and agritourism were the lowest prioritized supplemental income source which is a deep contrast to the wine sector which has a high reliance on tourism development as a supplemental income source (Franken & Bacon, 2014; Villanueva & Moscovici, 2016; Lucha, Ferreira, Walker, & Groover, 2016).

The findings support the triangulation of three data sources archival records from the USDA farm census for 1997, 2002 and 2007; personal interviews 25 farmers; and peer-reviewed literature (Persson, 2013). Although aware of the importance of valuable income supplement sources to economic success, farmers do not include supplement income sources into their strategic plans citing stress, start-up costs, and added management duties as deterrents (Persson, 2013). The findings from the study add to the current literature and provide practical knowledge for farmers seeking to add supplemental income sources. By drawing from a broad geographical range and not narrowing the focus of the crop grown or specific supplement, income source limits the application of this qualitative study.

Many factors contribute to agritourism development in the United States such as regional diversity, characteristics and management style of owners/operators, and financial benefits (Lucha & et al., 2016). Conducting this quantitative study, Lucha & et al. (2016) investigated the effects of a series of factors on perceived profitability of agritourism operations (Lucha & et al., 2016). A survey of more than 500 agritourism operations in Virginia resulted in 52 percent response rate and revealed several factors positively impacting the profitability of agritourism operations (Lucha & et al., 2016). Applying the Dillman method, Lucha & et al. (2016) hypothesized that regional location, operators motivation, promotional portfolio diversification, the number of natural amenities, and proximity to a populated metropolitan area are more likely to be profitable (Lucha & et al., 2016). The analysis of the survey data revealed that proximity to a populated metropolitan area, accessibility by the public, and motivation to develop agritourism contributed to the perceived profitability of agritourism while no significant impact was perceived by geographical location or natural amenities (Lucha & et al., 2016).

A direct correlation exists between specific agricultural products and management practices, and operational profit and sustainability. As noted by Lucha & et al. (2016) owner operators motivated by financial gain rather than intrinsic fulfillment are more focused on value-added strategies to control costs and increase revenue in operations (Lucha & et al., 2016). A weakness of this study is the focus on perceived profitability and not actual profitability. The perception of the respondents is subjective, and a skeptical view is necessary when interpreting the results.

Drivers of economic success and profitability in the agricultural operations, specifically the wine sector, is affected not only by the value-added strategies to generate supplement income but also marketing procurement decisions. Franken and Bacon (2014) conducted a quantitative study to address the gap in the literature on the drivers of organizational structure in established wine regions hold for emerging wine markets (Franken & Bacon, 2014). The researchers hypothesized the grape growers’ decision to integrate vertical coordination influence marketing and procurement decisions (Franken & Bacon, 2014). Data collection from a survey of Illinois wineries by Western Illinois University and reports based on the USDA census data from 2012 measured procurement methods and intermediated distribution channels (Franken & Bacon, 2014).

The results of regression models applied to various marketing and procurement decisions in established wine regions collaborate earlier finding in the research literature (Franken & Bacon, 2014). The outcome is not surprising: large established wineries benefit from economies of scale while smaller emerging wineries are reliant on imports and sell wine through direct sales (Franken & Bacon, 2014). The small restrictive small sample and difficulties associated with the measurement of relevant attributes is a weakness of this study.

Many studies were conducted to examine critical factors that drive economic success and profitability for small agricultural enterprises including small farm wineries. A key element for economic success and profitability is a clear business vision (Alonso & Northcote, 2010). In the rapid growth in the wine sector in Australian rural communities led to a qualitative study by Alonso & Northcote (2010) to investigate whether small winery operators have a defined business vision and to what extent the business vision impacts the operations, including achievement operational strategies and objectives (Alonso & Northcote, 2010). The researchers extended an invitation to participate in the study to 61 wineries with 40 wineries participating in the study (Alonso & Northcote, 2010). The participants who indicate they have a defined business vision, about 50%, emphasize quality of the wine product and quality of service as key determinates to business success (Alonso & Northcote, 2010).

With large, well-established wineries dominating the Australian winery industry, emerging small wineries need to establish innovate and creative strategies to increase profits and sustainability. The results of the findings indicated that 40 percent of respondents lacked a clear business vision as well as a lack of long-term business strategies and objectives (Alonso & Northcote, 2010). With tourism emerging as an important dimension in the development of the winery sector in Australia, this study reveals the diverse orientations and level of business knowledge among winery operators in the area (Alonso & Northcote, 2010). Although not the focus of the study, assessment of the economic success of wineries with a define business vision and those without could provide valuable information to existing operators and potential new entries into the wine industry. Finally, this study adds to the existing literature exploring the relationship of formal business planning and business sustainability. However, the small sampling of wineries does not provide a substantive data to make generalizations regarding emerging small wineries in Australia.

Small and medium size enterprises (SMEs) face many challenges that affect their economic success and sustainability. The quantitative study conducted by Philip (2011) intended to identify the determinants of SMEs success in Bangladesh (Philip, 2011). By uncovering the most significant factors affecting business success, the researcher sought to correlate owners’ characteristics, management skills, products and service, resources and finance, and external environment to business success in SMEs (Philip, 2010). In a survey using a 5-point Likert scale to measure the factors of business success, participants were instructed to measure factors of business success from strongly agree to strongly disagree (Philip, 2010). A Regression Analysis of the data collection indicated products and service, management skills, and external environment have significant positive effect on SMEs success while the remaining factors had no significant effect at 52.3 percent variations (Philip, 2010).

The finding of the study adds to the existing literature to bring a fuller understanding of the critical factors contributing to business sustainability and growth which support economic growth within the geographical location of the SMEs. A major element missing from the study is the impact of technology on SMEs, and the way technology impacts the way they conduct business. Value-added strategies to exploit strengths will aid in developing a competitive advantage over competitors and increase chances of success (Philip, 2010).

Connecticut (CT) and New Jersey (NJ) are experiencing a flourish in wine tourism. Villanueva and Moscovici (2016) qualitative study focused on the wine tourism development as a viable long-term strategy for economic success and sustainability (Villanueva & Moscovici, 2016). The researchers attempted to fill the gap in data available in regards to small farm winery operations in CT and NJ. A survey of 71 percent of wineries in NJ and 100 percent of the wineries in CT focused on characteristics of the winery, production and sales, and understanding the tourism sector (Villanueva & Moscovici, 2016). Specific findings for CT and NJ from the search including 100 percent of wineries are privately-owned, wine sales within the state exceed 90 percent, and visitors to the winery by personal automobile is 95 percent (Villanueva & Moscovici, 2016).

Both states have established wine and vineyard awareness programs to promote wine tourism of which the majority of wineries in each state participate (Villanueva & Moscovici, 2016). Tourism is one value-added strategy that can contribute to the economic success and sustainability of small farm winery operations. The study does not provide any economic impact data to support the financial contribution of tourism to small farm winery profitability. The data collected does provide a baseline for future research.

References

Alonso, A.D. & Northcote, J. (2010). Small winery operators and business vision: A western Australian case. Journal of Wine Research, 21(1), 19-34. doi:10.1080/09571264.495852

Franken, J. R. V. & Bacon, K. J. (2014). Organizational structure and operation of the Illinois wine industry. Agricultural & Resource Economics Review, 43(1), 104-124. doi:10.1017/S1068280500006936

Lucha, C., Ferreira, G., Walker, M., & Groover, G. (2016). Profitability of Virginia’s agritourism industry: A regression analysis. Agricultural & Resource Economics Review, 45(1), 173-207. doi:10.1017/age.2016.12

Persson, E. P. (2013). Exploring income supplementation for farm sustainability. (Doctoral dissertation). Retrieved from http://www.waldenu.edu/library/dissertations

Petlina, A. (2016). Success of family company: Critical evidence from the United States. Trends Economics & Management, 27(3), 57-66. doi:10.13164/trends.2016.27.57

Philip, M. (2011). Factors affecting business success for small and medium enterprises (SMEs). Amity Global Business Review, 6(1), 118-136. Retrieved from http://www.amity.edu/

Saunders, M. N. K., Lewis, P., & Thornhill, A. (2015). Research methods for business students (7th ed.). Essex, England: Pearson Education Limited.

Villanueva, E.C & Moscovici, D. (2016). Sustainable wine tourism development in burgeoning regions: Lessons from New Jersey and Connecticut. International Journal of Economics & Business Research, 12(4), 3133-333. doi:10.1504/IJBER.2016.10002107