Free Essay

Global Wine War: Old vs. New Country

In:

Submitted By carebee
Words 483
Pages 2
Problem/Issue
The global wine war between France, the United States, and Australia has caused problems for all three sectors and each are in need or recommendations for strategic play in the wine market. France faces the problem that their wine is too expensive and they lack diversification in their products. Their marketing strategies are lackluster leaving their wine to be seen globally as one product instead of many individual products. The United States has issues with the high-cost of their production, along with the decrease in demand, and high substitute competition from other countries. Australia’s problems revolve around their late entrance into the New World’s opening markets.

Recommendation
It is recommended that France allows growers who have low sales to go out of business, relax their rules on the classification system, and market the local brands.

It is recommended that the Central Valley vineyard should expand their development, and improve brand image by producing higher quality wine with better differentiation.

It is recommended that Australia continues with the Strategy 2025 plan, reposition their wines into the premium market and continue with the innovation in their brands, packaging and image.

Discussion
The recommendation for France are to have the government wean their growerd off subsidiaries and stop bailing out poor growers. Too many french growers have poor quality wine, and these recommendations will boost the quality and lower the oversupply in France. Relaxing the classification system will allow growers to become competitive and adapt to the changing market in a timely fashion, as well as allow new growers to enter the market. If France focuses on brand marketing, the differentiation potential could develop a global name for the local wines, and give an ease to consumers who are looking for a wine that if they like they can buy on repeat.

The recommendations for the United States are to expand the development in the central valleys as this would increase both domestic and global market shares. This new segment could target the new generation who are concerned with price not quality. The U.S. should improve brand image by producing higher quality, differentiated wine

The recommendations for Australia are to continue with the Strategy 2025 plan as data shows it has been successful in exports. It is also suggested to Reposition Australian wines as a premium for US Generation Y consumers, they prefer imports over domestic, holding advantage Australia to an advantage. US producers face higher production costs and France’s system doesn’t allow them to respond to consumer demand as quickly. Australia should thus continue with the innovation in brand, packaging, and image that allows it to be a big player in the Wine industry. Looking to emerging markets like Russia, and Canada. China has great growth potential, but may be more attractive toward a primary low cost producer. Australia should be focusing on the premium, super, and ultra markets combined.

Similar Documents

Premium Essay

Global Wine War

...Global Wine War 2009: New World vs. Old The French were able to become the dominant competitors in the increasingly global wine industry due to several factors, such as the large amount of grape growing in France, their focus on large volume production and their classification system. Grape growing accounted for one-sixth of France’s total trading revenue and was the country’s second largest export. Their customer base was small and spread and was not yet price conscious. As the wine industry became culturally and economically significant, their focus on producing large volumes of wine instead of on quality allowed them to gain a competitive advantage as more laws and regulations to control many aspects of wine making were developed. The French classification system helped consumers sort through the complexity of a highly fragmented market and gained wide recognition. They were able to develop a competitive advantage to support their exports by producing country wine, which was very inexpensive but very drinkable. They were vulnerable in the area of asset allocation. It was not focused and many of their vineyards were dedicated to below premium wines. In addition, their value chain and distribution processes were fragmented. Some changes in the global industry structure and competitive dynamics that led France and other traditional producers to lose market share to challengers from New World countries were the introduction of mechanical harvests and pruners, packaging...

Words: 572 - Pages: 3

Premium Essay

Austrailian

...Australian Wine Industry Rebuttal Good afternoon ladies and gentlemen, my name is Justin Bardwell and I am here representing Group 4 of JBS Swift & Co. and we are going to present the rebuttal to Group 10’s Australian Wine Industry case analysis. My fellow group members who have aided in preparing this presentation are as follows:… We would first like to point out the case provided by Harvard Business School mainly describes the New World vs. Old World and the Global Wine Wars of 2009. While the case analysis provided by group 10 mainly focuses on the Australian Wine Industry, which is only one example of the New World wine production country. So how is everyone doing on this beautiful Wednesday afternoon? Good, good. I know none of you want to be here anymore than I do, so we plan on making this as short and sweet as possible. With that, let’s go on ahead and get started. What we have prepared for you all today is a brief rebuttal to Group 10’s Australian Wine Industry case analysis. Before we begin let me set the record straight by saying that Group 10 did an outstanding job with their analysis of the wine industry within Australia. They did an excellent job incorporating Porter’s 5 forces model and the Blue Ocean strategy throughout their analysis. With this in mind, my fellow group members did find a few areas that we believe we should shed light on today. Such areas that our group found were the goals and constraints, as well as the central problem and the alternatives...

Words: 1092 - Pages: 5

Premium Essay

Global Wine Wars

...Global Wine Wars 1. How did the French become the dominant competitors in the increasingly global wine industry for centuries? What sources of competitive advantage were they able to develop? Where were they vulnerable? France had been producing wine for centuries and has been known for its premium wines. When the wine production was a labor intensive job they were able to create efficiencies in cultivation and increase farm outputs leading to a greater production and more profitable business. In the recent times the French wine industry worked in tangent with government regulations to differentiate their wines e.g. they categorized their wine yards into five different categories based on quality of wine produced. The government’s strict policies to control the quality of wine produced led to the AOC laws that defined rigid boundaries and rigid standards for vineyards and wineries. This worked as an advantage for the industry as it segmented the wine market making it easier to identify wines and also prompted confidence amongst the consumers that wine are of high quality. This allowed the process of choosing wines easier and helped the customers to sort through the complexity of the highly fragmented market. The French wines industry was vulnerable for several reasons, firstly the restrictions and rigid standards that signified quality for the industry also led to lack of innovation and efficiencies within the industry and left them unable to compete with new world...

Words: 1722 - Pages: 7

Premium Essay

Global Wine Wars

...Global Wine War 2009: New World versus Old Wine-making was originally considered an art, dominated by several European countries, mainly among the noble class competing against one another for the highest quality wines. Traditionally set in their ways, from the methods of planting to harvesting to marketing channels and their consumers. The old world winemakers were unprepared for what was ahead of them. As the new world began gaining ground, a rivalry arose between new and old world. The old world set on its traditional ways which had been in practice for centuries while the new world focused around maximization of crops and harvesting as well as marketing to the change in consumer preferences leaving the old world in awe as the new world took over and sales and imports with a shifting of pallets and an economic recession which it not only the consumers wallets but also the grower's vineyards a continuous battle for leaders in US imports emerged as the preference for premium wine increased leaving us out to dry with their high prices due to inherent domestic cost. How did the French become the dominant competitors in the increasingly global wine industry for centuries? What sources of competitive advantage were they able to develop? Where were they vulnerable? France had been delivering wine for quite a long time and has been known for its premium wines. At the point when the wine creation was a work with serious...

Words: 2080 - Pages: 9

Premium Essay

Australian Vintage Limited Entering Poland Wine Market

...Vintage LTD (AVG) The Australian industry The Australian wine industry is the 4th largest exporter in the world, exporting over 400 million litres a year to a large international export market that includes “old world” wine-producing countries such as France, Italy and Spain. There is also a significant domestic market for Australian wines, with Australians consuming over 400 million litres of wine per year. The wine industry is an important contributor to the Australian economy through production, employment, export and tourism. The Australian Wine export market was worth 2.8 billion Australian dollars in June 2007, and had a growth rate of 9%pa. Of this about AU$2 billion was accounted for by North America and the UK, and in this key latter market Australia is now the largest supplier of still wines. 2007 statistics for the North American market show that Australian wine accounted for a 17% share of the total value of U.S. imported wine, behind France with 31% and Italy with 28%. Australian Vintage Limited Australian Vintage Limited is a leading Australian wine company, known as McGuigan Simeon Wines until February 2008, when shareholders voted to change the name. Today Australian Vintage Limited is at the forefront of the Australian wine industry. Crushing 9% of total Australian annual production, its vineyards and grape supply capacity extend through some of Australian’s most captivating and diverse wine regions including the Hunter and Barossa Valleys, as well as...

Words: 1866 - Pages: 8

Premium Essay

Marketing

...SL. NO. | TITLE | SOURCE OF THE PROJECT | PAGE NO. | SIGN OF THE TEACHER | 1 | Acknowledgement | - | | | 2 | Brand RivalryAn INTRODUCTION | www.wikipedia.org | | | 3 | PepsiAn Introduction | www.wikipedia.org | | | 4 | Pepsi the history | www.wikipedia.orgwww.pepsiarabia.com | | | 5 | Products Of Pepsi | www.wikipedia.org | | | 6 | Coca-Cola An Introduction | www.wikipedia.org | | | 7 | Coca-Colathe history | www.cocacola.com | | | 8 | Products Of Coca-Cola | www.wikipedia.org | | | 9 | Pepsi Vs Coca-Cola A Comparison | www.versus.com | | | 10 | Pepsi Vs Coca-Cola THE COLA WAR | www.slideshare.netwww.scribd.com | | | 11 | Pepsi Vs Coca-Cola Which Cola brand is the Better Investment? | - | | | 12 | Pepsi Vs Coca-Cola PRESENCE IN INDIA | www.infobarrel.com | | | 13 | Pepsi Vs Coca-Cola Marketing | www.google.com | | | 14 | Pepsi Vs Coca-Cola Advertising Strategies | www.google.com | | | 15 | Pepsi Vs Coca-Cola Conclusion | - | | | 16 | BIBLIOGRAPHY | - | | | ACKNOWLEDGEMENT I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals and organizations. I would like to extend my sincere thanks to all of them. I thank my God for providing me with everything that I required in completing this project. I am highly indebted to the Teacher in Charge Mr. James Thomas for his guidance and constant supervision as well as for providing necessary...

Words: 10538 - Pages: 43

Premium Essay

Lmvh

...LVMH: King of the Luxury Jungle SEPTEMBER 2009 Profit from temporary W&S woes to bag the stock at discount prices LVMH is the strongest player in the luxury goods industry, a giant in an industry where fixed costs make scale paramount; the only "two-legged" balanced player, leading with mega-brands in both Leather Goods and Wines & Spirits; enjoying stable group EBIT margins as a consequence Champagne consumer demand weakness, de-stocking and oversupply in 2010 are well understood; W&S concerns have depressed the stock close to 20-year trough multiples and in the same range of smaller and more volatile hard luxury players and other peers; an opportunity in our view On top of LVMH's unrivaled industry position, markets seem to under-appreciate cost-saving opportunities, brand-portfolio rationalization, higher FCF from lower W&S inventory investment, above-average mega-brands' results or support from first-mover EM inroads In a medium-term growth environment, LVMH has the chance to be a key consolidator in the luxury goods industry: a mega-merger with CFR would be a strategic master stroke, placing it ahead of any M&A counter move by competitors SEE DISCLOSURE APPENDIX OF THIS REPORT FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS LVMH: KING OF THE LUXURY JUNGLE 1 Portfolio Manager's Summary We have few doubts about the opportunity of investing in LVMH for the medium to long term. We expect "winners will continue to win" in the luxury industry...

Words: 54550 - Pages: 219

Free Essay

Anth106 Notes

...Anthropology Lecture 1 introduction Common Misconceptions with Drugs . The effect of a drug is caused solely by its pharmacological properties and effects. . Some drugs are instantly addictive . The gateway/ stepping stone theory - the use of 1 drug leads to the use of other more dangerous drugs What are drugs ? Krivanek's definition : Drugs are substances that are introduced into the body knowingly but not as food. Therefore illicit drugs, legal recreational drugs and legal but regulated pharmaceutical drugs that aren't recreational at all. - Whether if a drug is considered bad and is prohibited depends on the culture of the society in a particular period. What is culture ? The definition of culture = Through Roger keesing and Andrew Strathern's definition it is a system of shared ideas, rules and meanings that underlie and are expressed in the ways that human live. - This includes : law, beliefs, political economy, media and popular culture - this perceives ideas about what is normal and abnormal to society. " Culture is always changing and contested, not unified" Enthography as a method for studying drug use It is a process of observing, recoding and describing other peoples way of life through intimate participation the community being studied". - Participation observation, involving yourself in the life of the community , taking up the life of the other person, observing their actions, asking questions and learning what questions...

Words: 21869 - Pages: 88

Premium Essay

Agilent

...strategy of Coca-cola and Pepsi over 100 years of rivalry. New challenges of the 21st century included boosting flagging domestic cola sales and finding new revenue streams. Both firms also began to modify their bottling, pricing, and brand strategies. They looked to emerging international markets to fuel growth and broaden their brand portfolios to include noncarbonated beverages like tea, juice, sports drinks, and bottled water. For over a century, Coca-Cola and Pepsi-Cola had vied for the "throat share" of the world's beverage market. The most intense battles of the cola wars were fought over the $60 billion industry in the United States, where the average American consumes 53 gallons of carbonated soft drinks (CSD) per year. In a "carefully waged competitive struggle," from 1975 to 1995 both Coke and Pepsi had achieved average annual growth of around 10% as both U.S. and worldwide CSD consumption consistently rose. This cozy situation was threatened in the late 1990s, however, when U.S. CSD consumption dropped for two consecutive years and worldwide shipments slowed for both Coke and Pepsi. The case considers whether Coke's and Pepsi's era of sustained growth and profitability was coming to a close or whether this apparent slowdown was just another blip in the course of a century of enviable performance. A rewritten version of an earlier case by Michael E. Porter and David B. Yoffie. Essay: The case study “Cola Wars Continue: Coke and Pepsi in the Twenty-First Century” focuses...

Words: 3073 - Pages: 13

Premium Essay

Conflict and War Are Inevitable and Sometime Necessary

...Conflict and war are inevitable and sometime necessary Of the many wondrous and beneficial qualities we as a society possess, our inclination toward war and conflict is not one of them. In fact it is one of our most destructive and damaging activities humans do. As horrifying, catastrophic and fatal as war may be, it is a necessary element for the survival for humans as a species. Before we talk about why war might be necessary, let us first discuss some of the major causes of war. The most dominant reason for war in human history is ideology, or most specifically religious ideology. From the crusades that begun with Pope Urban II speech at the Church Council at Clermont in 1095 and ended with the expulsion of the Hospital of St John from Malta by Napoleon in 1798 to the current conflict in Israel religion has been a cause for conflict. “…Hubristic identities are a possible cause of war …He defines the term ‘hubristic identities’ as ‘the aspiration for recognition’ of one’s superiority, which is not recognized by other major international actors’… Fascist and communist regime from this hypothesis, and further integrate the notion of ‘image’ – for example, monumental works in the capital city – emphasised by the leaders of such regime. Logically, such ‘hubristic identities’ require some kind of proof for both the domestic and foreign audience to strengthen their claim of their superiority. In such a scenario, winning the war is perhaps the most viable and most credible...

Words: 2077 - Pages: 9

Premium Essay

An Evaluative Study of Cross-Cultutal Communication

...Assessing Cultures through Hofstede’s Framework 4 4. Codes of Communication 6 4.1. Verbal Communication 6 4.1.1. Welcome topics of conversation 7 4.1.2. Topics to avoid 8 4.2. Non-Verbal Communication 9 5. Gift Giving 10 6. Causes of Cross-Cultural Communication Conflicts 12 7. Conclusion 13 8. Recommendations 14 9. References 15 Executive Summary Today’s world has gone global. This globalization has led to the collaboration among manufacturers of products, suppliers of materials and service providers situated across the globe. The markets are no more restricted to a specific region or a country. The boundaries and distances between the markets have vanished. Saturation in developed markets has led to exploration and exploitation of emerging markets. The expansion of geographic footprint is not happening only to meet business needs, but this is happening also to promote social causes (Education, Health Awareness) and to mitigate global risks (Global Warming). Therefore, for the purpose of effective functioning, there is a strong need to learn about Cross-Cultural Communication. It is true that any usage of an inappropriate word, an impression or a gesture can lead to serious business or social implications. These cross-cultural communication blunders can then lead to lost customers, failed relationships and lost opportunities. To become an effective communicator worldwide, one should anticipate...

Words: 5311 - Pages: 22

Free Essay

Dddddd

...* High pressure for modernization and cost reduction * Operational survival: cut workforce, overtime, part-time, subcontracting * Recovery and diversification * The short-term future seemed positive, but the popularity of Japanese car forced it to diversify * Working as an OEM Cameron did little to be innovative * Alex brought in a team of designers, concentrating on developing products with a wider ‘non-automotive’ market appeal * The first year no progress, Alex lured away a key engineer from the Canadian firm, and mid-2003, developed its own line of flexible couplings * Marketing the new product * Hired eight field sales representatives, stress product quality, service and speed of delivery, but not price. * Financing plant capacity * Increasing sales of flexible couplings required a new separate plant, but the financial position is not strong enough to support it * Foreign markets * Took a European Patent * A licensing opportunity * Meet foreign customer, McTaggart in 2004 * Can’t build the market in Britain on the basis of shipments from America, since the large transaction & transportation cost * A license with McTaggart might be a good way of achieving swift penetration of the UK market via MT’s sales force. * 2% licensing fee include a free tech flow-back clause * Mixed views, good...

Words: 18260 - Pages: 74

Premium Essay

South Korea

...Country report South Korea – Electronic Yu Ming Lin Country Profile In February 1945 the end of World War II, Korean Peninsula divided into North and South Korea. South Korea also name Republic of Korea, 99,392 sq. km, has a population of almost 50 million, and has its capital at Seoul, the largest city in Korea. The second largest city is Busan, which is the country’s main port, has wonderful nature harbor beside the delta of Nakdong River. The major industrial prior 1948 was agriculture in Korea peninsula, South Korea was in a sever environment of economic. The war damage and the refugee from North Korea keep South Korea inflation and unemployment. Korea is full of mineral source, however, most minerals concentrated in the North such as gold, coal, ore, iron and graphite. There are some tungsten, amorphous graphite, coal, and iron in South Korea and the distribution percentage is North 80%~90% to South 10%. International trade Balance Of Payment The table above is the South Korea’s balance of payments account and this table can track the payments to and the receipts from other countries from 2006 to 2010. As we can see the current account surplus in all five years and it means that these five years South Korea exports more goods, services, and income than it imports. (Data from world databank) The Current Account In October 2011, South Korea’s current account surplus US4000 Million. South Korea’s growing economy relies on exports, and the most important exports...

Words: 4979 - Pages: 20

Free Essay

Aaaaaa

...PURPOSE OF CHAPTER Consumers’ perceptions are highly subjective, and consumers can be quite unpredictable.The complex nature of consumers makes the study and understanding of consumer behavior imperative. Sweden and Colombia have both attempted to affect consumer perceptions. The Juan Valdez campaign of the Federation of Colombian Coffee Growers has been successful in creating a desirable image for its product and using it to communicate with consumers. Volvo, likewise, has successfully nurtured an image of safety. Because the influence of culture has already been discussed in depth in Chapter 6, this chapter covers other relevant concepts. The focus is on the major approaches used to study consumer behavior. The basic purpose of this chapter is to acknowledge the role that determinants other than culture play in influencing consumer behavior. The chapter thus examines the psychological and social dimensions, and these include motivation, learning, personality, psychographics, perception, attitude, social class, group, family, opinion leadership, and the diffusion process of innovations. PERSPECTIVES ON CONSUMER BEHAVIOR Consumer behavior may be defined as a study of human behavior within the consumer role and includes all the steps in the decision-making process. The study must go beyond the explicit act of purchase to include an examination of less observable processes, as well as a discussion of why, where, and how a particular purchase occurs. Domestically, marketing...

Words: 7615 - Pages: 31

Free Essay

Globalization and Culture

...of offering some commonly diverse choices. So today you can buy sushi in either France or Germany. This makes France and Germany more alike, yet in my view this is closer to being an increase in diversity than a decline in diversity. If we think of societies that have very well developed markets—for example the United States—what we find happening is not that everyone, for instance, buys or listens to the same kind of music. As markets have allowed suppliers to deliver products to consumers, we’ve seen a blossoming of different genres of music. In the 20th century the United States evolved rock and roll, rhythm and blues, Motown, Cajun music, many different kinds of jazz—ragtime, swing, stomp—heavy metal, rap. The list goes on. When I look at the empirical evidence from societies with well-developed market economies, I find that what people want to buy is not fixed or biologically constructed. When the cost of supplying products goes down, people tend to use culture to differentiate themselves from other people, to pursue niche interests, to pursue hobbies. It’s the poorer or more primitive societies in which people specialize in one type of consumption. If you go to pygmy society in the Congo, for Critics of globalization contend that, even if increased trade promotes material prosperity, it comes with a high spiritual and cultural cost, running roughshod over the world’s distinctive cultures and threatening to turn the globe into one big, tawdry strip mall. George Mason University...

Words: 4004 - Pages: 17