Olive oil from the Southwest of Buenos Aires (Argentina) according to some models of business failure

Abstract

Business failure models identify intrinsic and external elements of firms that explain their performance. The objective of the work is to build a matrix of strategies based on the SWOT matrix of the production of extra virgin olive oil (EVOO) in the Southwest of Buenos Aires, Argentina (SWBA) within the framework of one of these models. This sector forms a regional and sectoral cluster that translates into advantages for its members, such as joint purchases, and better access to training and technical advice, among others. However, they face disadvantages in other aspects such as access to credit, not having enough volume to export, to mention some of the sectors own, in addition to the country's macroeconomic instability (high inflation, changing policies). The information comes from a census carried out on the forty-eight producers and subsequent updates in 2023 through interviews with key references. This article presents major results as a SWOT analysis, highlighting the producing farms' strengths and weaknesses, and the opportunities and threats derivate from their environment. The analysis focuses on the economic-financial aspects, comparing producer statements with the analysis results to determine alignment with business failure theories. Finally, a Matrix of strategies is built based on the variables that entrepreneurs should monitor to avoid business failure. Based on these recommended strategies to avoid business failures, the following stands out: (i) diversifying your points of sale, advancing in the process of establishing a collective brand by overcoming the rivalry between them; (ii) increasing the number of extractors so that there is no bottleneck at that stage; (iii) promote the healthy aspects of EVOO consumption so that the consumer is willing to pay the price differential compared to traditional oils; (iv) improve the accounting and formality aspect of the farms; and (v) join the already existing Olive Route, among others.