Revisiting the ‘concentration vs spreading debate’: perceived risk and strategic flexibility in decision-making following an unanticipated environmental market disruption

Abstract

Managing risk is an important aspect of owner-managers' decision-making; however, the impact of major environmental market disruptions remains largely under-researched. Underpinned by an effectuation lens, this study examines decision-making associated with the 'concentration versus spreading debate' (focusing on a single or limited number of product-market strategies rather than diversifying across a variety of product-markets). The context features post natural-disaster recovery strategies following a high magnitude earthquake that immediately ended firms' sales within their local proximity. The study employs a longitudinal qualitative research design involving 16 smaller-sized wine producers in the Canterbury/Waipara Valley cluster of New Zealand, illustrating different degrees of strategic flexibility among owner-managers. Unique insights offer varying 'how and why' perspectives into decision-making regarding the extent to which product-market strategies differed across core and augmented product portfolios and geographic markets prior to and following the disruption caused by the unanticipated natural disaster.