...Chilean Wine Industry’s National Competitiveness Using Porters National Diamond. Part 1: Porters National Diamond model is used to analyse a firm’s ability to compete in a home market, their ability to compete in a foreign international market and to recognise the particular country and market within that, which a firm would be suited to expanding into. In doing so it analyses the viability of a nation to compete in any given market. The model is described by Ozlem Oz (1999) as “a dynamic system which all elements interact and reinforce each other”. The elements to which this refers are; Factor Conditions, Demand Conditions, Firm Strategy, Structure and Rivalry, and Related and Supporting Industries. These main elements are supplemented with Political and Chance factors which influence all of them. The model explains the relationship between related industries and how this helps successful development. Porter believed that a healthy competition would drive the firms to be innovative. With a competitive market, people have more choice and this provides great market research availability to find out what people want. Fig.1, Michael Porter, Porter’s National Diamond (1990) Throughout this report an analysis of the Chilean wine industry’s competitiveness at an international level will be carried out. Care will also be taken when considering how well the company in question will be suited to expanding into this market. The diagram above, figure 1, displays...
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...Investment Attractiveness of the Chilean Wine Industry 1. Introduction Over the past 30 years saw major transformations within the Chilean wine industry, this transformation allowed many of the talented Chilean winemakers on this unique opportunity to produce world class wine with its own unique personality and character. Chile currently is one of the leading nations in the global in the wine industry, currently ranked at 8th as the world’s largest wine producer and ranked 5th as the largest wine exporter. Chile exports a massive 70% from its own wine production making Chile the world’s most globalised wine industry. Even with the enjoyed success by the nation, Chilean wines find themselves facing huge competition globally in different markets as the wines produced in Chile sells at a relatively low average price therefor directly affecting the profit levels in return. (Emeraldinsight, 2010) 2. Factor Conditions As of 2011, Chilean vineyards have been facing shortage of filed workers as most employees are migrating to construction, agriculture director Santa Rita is quoted saying “between 15% and 20% fewer workers now than two years ago” Working in vineyards is not a preferable profession to the locals anymore as they end up working eight hours more just to get the minim wage. (MecrcoPress, 2011) This means finding field workers for the vineyards will prove difficult unless the company is prepared to pay the minimum wage. 2.1 The unemployment rates in general...
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...Field Study – Chilean Wine Industry Chile country analysis 1. Country Profile: i. Population: 16,634,603. About 90% of them are classified as white people and mestizos. ii. Currency: Chilean Peso (CLP). Current spot rate: 0.001924 USD/CLP iii. GDP: Its estimate GDP for 2013 is $285.703 billion (38th in the world ranking). It had been growing constantly since 1997 until 2009 (global crisis). Adjusting it at PPP (reflects real purchasing power) it rises to $341.914 billion (43rd in the world ranking). iv. Income distribution: Since July 2013, Chile is considered a high-income economy. The percentage of Chileans beyond the poverty line was only 11.5% back in 2009. In addition, 64% of the population benefits from government welfare programs, which include poor people and those in risk of becoming poor. Nevertheless, the income distribution is still far from being equal, as shown by the GINI Index of 0.503 (2011). This index hasn’t varied much for the past 20 years. v. Approach to International Trade: Since early decades after independence, Chile has always had active involvement in international affairs. Consistent economic policies since the 1980’s have contributed to a steady economic growth, much of it thanks to its international trade. It currently has the highest degree of economic freedom in South America (7th in the world). In the past 15 years Chile has also signed free trade agreements with more than 10 countries (including Japan,...
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...The wine produced in Chile were used to be made for religious purposes. It has now been changed to be enjoyed with a meal or with a friend. When the Spaniards came in 1551, a Spanish officer succeeded in making wine located 500 kilometers North of Santiago. In 1979, more that 400 years later, Miguel Torres Arrived in Chile. He brought with him new technology to improve the Chilean wine. Miguel brought with him a machine that transformed the verification process. The weather in Chile has the perfect conditions to growing healthy vines. Chile has the Atacama Desert on the north. They have the Andes mountains on the east, that bring the cool breeze from the snow. The pacific ocean on the west brings the cool breeze from the ocean. Antarctica...
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...position, as opposed to being dominated 7by the country-of-origin effect, and be perceived as a “Chilean Wine”? Changing the overall image of its companies wines are added to its market positioning strategy. Even though the branding as a Chilean Wine is easily applied onto MontGras, there are many factors in its control which can make sure that the company dominates the market by having a bigger share as it wants to. MontGras though being smaller than some Chilean wineries, it has been able to stand out due to its interest in high quality wines. The company wants to establish itself as the ‘low price yet high quality’ provider of wines. This is directly related to the seeds, the soil and the production methods. The company was able to affirm that its resources are on par with other high class wineries in one way or the other. Fortunately, studies also show an increase in the number of consumers for the higher quality wines (Reserva) and a minor decline in the demand for the lesser quality (Varietal) wines. The marketing has to be different for every region. Most people with very little information about wines conveniently relate price with quality. Chilean wines thereby being priced lower than other brands were inevitably being considered not so superior in quality. Since that is not the case, MontGras is trying to change its current reputation. It wants to emphasise on its higher end wines such as the Reservas and the Ninquen to show that they don’t not lack in the quality aspect...
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...Part One: The Chile Wine Industry The Chilean wine industry has experienced various transformations over the past 30 years – its quality revolution led by the complete technological renovation during the 1980s, the export boom of the 1990s, and the new terror developments during the 2000 decade. This transformation has allowed a new generation of talented viticulturists and winemakers to capitalize on Chile’s viticultural paradise and to produce World Class Wines of unique character and personality. Chile is the world’s eighth largest wine producer and the fifth largest exporter, reaching a market share of 8% by volume of the global international wine market at the close of 2010. However, and most importantly, Chile exports 70% of its wine production, making it the world’s most globalized wine industry, with great flexibility, innovation and a long-term commitment to quality and service. With 150 destination countries and 1.5 billion consumers for each year, Chilean wines are positioned as the country’s most emblematic and best known world ambassador. In the late 1970s and early 1980s, Chileans adopted advanced technology and invested in new machinery for optimizing the winemaking process in the field. The winemaker offered an innovative higher-quality product that was conducive to the development of new wine varieties. Later producers also perfected their wine cellars and invested in better labels and packing, such as boxes, bottles and cartons, that were more attractive to...
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...1. (a) Because the Chilean wine industry, as a whole, has achieved a good reputation as being a “value for money” or a low cost alternative to more traditional, old-world wines (subsequently positioned at the low end of the fine-wine cost range), the country-of-origin effect has made it difficult for smaller, boutique wineries, such as MontGras, from being able to fully control its own market position and produce and sell higher-quality wines at premium prices. However, although the country-of-origin effect has a large influence on shaping consumers’ general perceptions on wines from Chile, MontGras can use the effect to differentiate and reposition its brand in order to control its own market position. Moreover, as stated in the case, consumption of high-quality wine brands is steadily increasing, while the consumption of more traditional lower quality brands has significantly fallen (6). The perception of Chilean wine being a low-price alternative was developed by the increase in exports of bulk wines with competition based on price. This exports in bulk strategy, which led to the perception or country-of-origin effect does not align with MontGras’ goal to produce and export high quality wines and not compete against the larger Chilean wineries. Therefore, the country-of-origin effect also allows MontGras’ the opportunity to differentiate its brand identity based on exporting higher quality wines at premium prices. The implementation of a differentiation product strategy...
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...nMontGras A Wine of Chile 1. A. Marketing strategy * MontGras became a successful story only through their marketing strategy. It took a determined path of exporting to the top rated wine importers in the world. * Through heavily exporting to U.K and U.S, MontGras segmented and exposed to some of the top wine consumers in the world * MontGras has been exporting 50% of their wines to U.K, which is strategically a worth move according to the rate of Chilean wines that are being exported to different countries. It’s worth noting that U.K is not in the top ten lists of wine production in the world but they are in number one in importing wine. * U.S is a strategic market for wine consumption and importation but U.S also produce large amount of wine followed by France and European countries. Moreover, it expensive to distribute wines in the U.S market. Therefore, MontGras decision of exporting 4% volume of wine to U.S is economically a fair deal. * In terms of marketing budget, MontGras had spend high price for marketing in Ireland but it only sold 42,000 cases but in U.K they spend $5000 lesser than Ireland but sold almost 117,000 cases, which is 75,000 more cases sold. * Therefore, MontGras marketing strategy is flawlessly a well suitable strategy to reach, segment and brand to the main wine consumers. B. MontGras Actually positioned in an attractive segment * They have been working towards reaching consumers under their own...
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...AUSTRALIAN WINE COMPANY Group no.: 2 Ankita KUMARI PGP/17/133 DEBOPAM CHAKRABORTY PGP/17/264 Vinit KUMAR PGP/17/303 Ananya Mukherjee PGP/17/308 pRAKHAR GARG PGP/17/333 kavita YAJNIK PGP/17/356 Q1. Should Mr. Millar approve Carson’s proposal to launch D’istinto? Defend your response with strong evidence and arguments. Ans: We recommend that Mr. Miller should approve the launch of D’istinto and scrap the Chilean project altogether because it was aligned with their overall international strategy. The various advantages of launching D’istinto are: 1. The Italian wine had a backing of 135 experienced vine growers hence brings in a diversified supplier network and gets rid of the risk related to weather conditions in one part of the world as they now source from various regions. 2. It also suited well with the strategy of being a Global Brand. 3. These suppliers acted more like owners unlike the Chilean project where despite a joint venture, they only behaved like a supplier. This sense of ownership ensures better commitment hence good quality product (the main problem faced in the Chilean wine case was low quality). 4. This project was Carson’s pet project hence approving this gives Carson the indication that the Australian management trusts his decisions and truly believes in their decentralizing strategy and at the same time by scrapping the Chilean project...
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...문예송 2010-10415 Principles of Accounting Individual Report Wine Industry Vina Concha y Toro (Chile) History of Chile Wine and Concha y Toro The Chile wine industry has enjoyed immense success and growth on the past two decades. The quality of Chile wine brands are at par with the most famous brands from the Old World countries and has been able to secure international prestige. Wine making began from the late 16th century by the Spanish conquistadors and missionaries. Despite the political connection to the Spanish, Chile wine is historically influenced by the Bordeaux French wine which started in the late 19th century with many wealthy Chile wine makers importing Bordeaux grapes such as Cabernet Sauvignon, Merlot, Malbec, Carmenere, and Cabernet Franc to plant in the ideal valleys of Chile. These species of grapes were rare and are considered the “lost” species of grapes from Bordeaux due to having been imported before the phylloxera (blight) epidemic which ravaged and destroyed Bordeaux vineyards in the late 19th century. The ruined wine industry in the late 19th century also prompted many French wine makers to travel to South America bringing their experience and accumulated traditional techniques. This was the second tide of Chile wine history where currently famous firms were established by the wealthy wine makers of Chile such as Vina Errazuriz by Don Maximiano, Ochagavia Wines by Don Silvestre Ochagavia Echazarreta and Concha y Toro by Don Melchor de Santiago in the...
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...California a recognized wine producing region alongside great winemaking regions of Europe Major focus on technology and wine growing techniques Production of premium to super ultra premium wines Mondavi focuses on personal sales, wine competitions, and lavish parties to promote the wines rather than conventional advertising Mondavi has a portfolio of premium to super ultra premium wines to fill various price points and niches in domestic wine market 1981 Opus One joint venture with Baron Philippe de Rothschild Through 1980's and 1990's, Mondavi acquires many wineries and vineyards throughout California Mondavi develops national following Phylloxera (vine killing insects) begin to infiltrate California vineyards 1993, Mondavi, in need of capital due to extensive acquisition expenditures in previous decade plus the replanting costs, issues public shares In the mid-1990's, Mondavi begins 3 joint ventures with a Chilean, an Italian, and French firms Wine production in California accounts for more than 70% of wine consumed in America Wines in America are sold through a three-tier distribution 100's of wineries emerge in California, 90% of Mondavi's revenues generated domestically II. Case Profile Problem/Issues in Case Managing multiple brands in the global markets Maintaining domestic market share while foreign competitors enter U.S Accurately forecasting demand and acquiring necessary wine grapes Supporting Statements ...
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...OPPORTUNITIES 1) Demand for its wine: Although traditional markets like United Kingdom, Belgium, Netherlands, and Germany have historically driven the market for premium wines but in the last year’s new countries around the world have joined the club of countries with a high demand of high-end wines. Countries like United States, Japan, China, and Russia are demanding now almost half of its total demand, becoming very important markets. We see this as an opportunity for the company’s growing. 2) Increasing new consumers in America, Asia where the wine is associated with Status Symbol: China, Taiwan, Singapore, Russia and other countries in North America with big and growing economies, see the Château Margaux brand as a status symbol. We see a big opportunity for the company in those markets with more rich people anxious about luxury wines. 3) Marketing of the Product can help meet the increasing demand: We believe that if the company creates marketing strategies focused on luxury markets and its current customer. It can result an increasing demand of their products. 4) Online Sales: As part of the marketing effort, Online sales can help company knowing its end users and that will help company monitor the changing trends and consumer behavior about their product. THREATS 1) Competition from worldwide manufacturers like California, Australia, South Africa: We believe that one of the main threats for the company are the new competitors, not only new competitors from countries...
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...of Australian Wine Company Western International University LDR 645 – Innovative leadership global May 24th, 2011 1. Executive Summary BRL Hardy is a global wine company that has engaged in a strategy that geared to create multidimensional capabilities for the company but faced with decision dilemma resulted from management tensions. The author of this paper believes the source of management tension is lack of coordination between management teams and absence of precise lines of authority and responsibility. According to author of this paper, Hybrid style of management is the best solution for management tensions in the company for it gives the best of both worlds for since allows management to centralize some important functionalities and activities of the company while enjoying flexibility of decentralization of authority and responsibility. 2. Industry background The history of the Australian Wine Industry originates back to 1788 when Captain Arthur Philip a leader of European settlers introduced it into Australia (Bartlett, Ghoshal & Beamish, 2008, p.666). According to the case study, Australian is originally a beer drinking country, and in 1969 the industry experienced a slow down whereby annual per capita wine consumption was at 8.2 liters as compared to 100 liters per person per annum in France and Italy. The Australian Wine Industry also underwent through transformation and the following changes happen; first, table wine varieties replaced...
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...CONTENTS AND TABLES Wine in Venezuela - Category analysis .......................................................................................... 1 Headlines ........................................................................................................................................ 1 Trends ............................................................................................................................................. 1 Production, Imports and Exports................................................................................................. 3 Competitive Landscape .................................................................................................................. 3 Prospects ........................................................................................................................................ 4 Category Data ................................................................................................................................. 5 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Table 12 Table 13 Table 14 Table 15 Table 16 Table 17 Table 18 Table 19 Table 20 Table 21 Table 22 Table 23 Table 24 Table 25 Table 26 Table 27 Table 28 Table 29 Table 30 Table 31 Table 32 Sales of Wine by Category: Total Volume 2006-2011 .................................. 5 Sales of Wine by Category: Total Value 2006-2011 ..................................... 6 Sales of Wine by Category: % Total...
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...Venture 10-11 2.2 Acquisition 12-13 RECOMMENDATIONS …………………………………………………………... 14 REFERENCES …………………………………………………………..……….. 15-17 WORD COUNT Part 1: 2310 Part 2: 939 Total: 3249 WORD COUNT Part 1: 2310 Part 2: 939 Total: 3249 INTRODUCTION Peru is a dynamic, fast-growing South American economy poised for success in international markets. Some of Peru’s flagship export products are coffee and asparagus, but in recent years, it is an emerging producer of New World wines. Peru’s wine market supply is around 45 million litres, an increase of almost 10 million litres from five years ago (USDA, 2014). Peruvian climate is ideal for cultivation of grapes with strong character, where majority of its vineyards are concentrated on the Central coast. The wine industry is Peru has promising prospects for a foreign business investment, due to growing domestic consumption and global demand for high-quality and affordable wines. ………... PORTER’S NATIONAL DIAMOND ANALYSIS ………... 1.1 Factor Conditions 1.1.1 Physical Resources Andean soils are relatively young and are subject to erosion by water and winds because of the land gradient. The soil composition is loose sandy loam with high salinity (FAO, 2006). The coastal region of Peru is desert, intersected by valleys flowing from the Andes down to the sea. Peru has a per capita availability of 68,321m3 from 159...
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