...Global Wine War 2009 : New World versus Old How were the French able to dominate the worldwide wine trade for centuries ? What sources of competitive advantage did they develop to support their exports ? France and the Mediterranean region is closely tied to the Wine History. It has started since the Roman Empire, and has been fully integrated to the European culture with the Christian era : Monasteries planted vines and built wineries. The nobility started also planting vineyards as a mark of prestige. In this early market, France has been dominant thanks to key advantages : 1. Factors Conditions : First, their geographic and climatic features played significant role. As France is in the middle of Europe culture with suitable climate and soil condition for harvesting grape, had accrued first-mover advantage and established its place as the dominant competitor in the global wine industry. 2. Demand Conditions : The Distribution and Marketing made the fame of French wine. The négociants traded wine between France and other countries and this worked as word-of-mouth effect, increasing the reputation and dominance of French wine. 3. Innovation. In the late 18th century, French producers had experienced a massive innovation in the market. Mass production of glass bottles, the use of cork stoppers and the development of pasteurization revolutionized the industry. Those innovation got the distribution and Marketing easier. These innovations increased the stability and longevity...
Words: 1310 - Pages: 6
...9-910-405 AUGUST 13, 2009 CHRISTOPHER A. BARTLETT Global Wine War 2009: New World versus Old “We have the people, expertise, technology and commitment to gain global preeminence for Australian wine by 2025. It will come by anticipating the market, influencing consumer demand, and building on our strategy of sustainable growth.” — Sam Toley, CEO of Australian Wine and Brandy Corporation. “By phasing out the buyback of excess wine and increasing incentives for farmers to uproot their vines, the EC reforms will only bring in the New World’s agro-industry model. We need to protect the age-old European model built on traditional vineyards.” — Jean-Louis Piton, Copa-Cogeca Farmers Association. In 2009, these two views reflected some of the very different sentiments unleashed by the fierce competitive battle raging between traditional wine makers and some new industry players as they fought for a share of the $230 billion global wine market. Many Old World wine producers—France, Italy, and Spain, for example—found themselves constrained by embedded wine-making traditions, restrictive industry regulations, and complex national and European Community legislation. This provided an opportunity for New World wine companies—from Australia, the United States, and Chile, for instance—to challenge the more established Old World producers by introducing innovations at every stage of the value chain. In the Beginning1 Grape growing and wine making have been human preoccupations at least since...
Words: 8880 - Pages: 36
...Global Wine War 2009: New World versus Old “We have the people, expertise, technology and commitment to gain global preeminence for Australian wine by 2025. It will come by anticipating the market, influencing consumer demand, and building on our strategy of sustainable growth.” — Sam Toley, CEO of Australian Wine and Brandy Corporation. “By phasing out the buyback of excess wine and increasing incentives for farmers to uproot their vines, the EC reforms will only bring in the New World’s agro-industry model. We need to protect the age-old European model built on traditional vineyards.” — Jean-Louis Piton, Copa-Cogeca Farmers Association. In 2009, these two views reflected some of the very different sentiments unleashed by the fierce competitive battle raging between traditional wine makers and some new industry players as they fought for a share of the $230 billion global wine market. Many Old World wine producers—France, Italy, and Spain, for example—found themselves constrained by embedded wine-making traditions, restrictive industry regulations, and complex national and European Community legislation. This provided an opportunity for New World wine companies—from Australia, the United States, and Chile, for instance—to challenge the more established Old World producers by introducing innovations at every stage of the value chain. In the Beginning1 Grape growing and wine making have been human preoccupations at least since the times when ancient Egyptians and Greeks...
Words: 8224 - Pages: 33
...Case Study: Online Marketing at Big Skinny Background Big Skinny is the company behind the “world thinnest wallet.” They have a cool brand and a product that customers love once they have seen the benefits. Their wallet technology appeals to customers for two primary reasons, the size & weight. Heavier and thicker wallets are more difficult to carry; they may not fit in your pocket and generally cause discomfort to carry. Carrying a very thick wallet in one’s back pocket can also cause back problems with associated posture issues from sitting on the offending item for long periods. Big Skinny also promotes additional benefits from standard skinny wallets including the ability to secure items due to the rubber coating on the interior, and the durability to machine wash their wallets without causing damage. Big Skinny’ initial success was a result of the products and sales approach. They were able to develop a cool brand and engage directly with customers at fairs & festivals. This in-person selling technique enabled them to articulate the key features of their product in a way that customers understood, but the sales model was not sufficiently scalable to allow them to grow as fast as they wanted. However the direct approach was still effective to promote the brand, connect with the consumers, and gather their feedback for use in wider efforts. Their move to mass-market promotion was started with print advertising (billboards, postcards, & newspaper/ magazine ads)...
Words: 2128 - Pages: 9
...CASE REPORT: Global Wine Wars: New World Challenges Old (Harvard Business School Case # 9-303-056) NMI 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 to support their exports? Where were they vulnerable? French wine makers also face challenges that are not internal to the industry. For instance, France lost market share in the United States due to informal boycotts in the wake of the Iraq war. The rise of the euro against other currencies, such as the 30% increase relative to the dollar in the last few years, has put French wines at a comparative cost disadvantage. But consensus among experts is that the primary threat to the French export market is internal to the industry: the inability of the appellation system to appeal to what is becoming a global way of understanding wines (Business Report, 2004). France is the largest overall producer of wine, at 5.3 billion liters of wine in 2001, 20% of world production. France has traditionally set the standard for quality wine as well as defining these standards. French viticulture laws mandates four levels of quality as 1) Appellation d’Origine Contrôlee (AOC) 2) vins délimite qualité supérieure (VDQS) 3) vins du pays and 4) vins du table. French wine makers also face challenges that are not internal to the industry. For instance, France lost market share in the United States due to informal boycotts...
Words: 1180 - Pages: 5
...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
...Global Wine War 2009: New World versus Old Synopsis: Commonly consumed for recreation or to enhance a dining experience, wine was once offered to the gods and pharaohs in Egyptian and Grecian times as a tribute. Subsequently, grape growth grew, and wine production evolved into an everyday drink for the common people. It was not until around the 1500’s when wine took a step upward, and nobility flaunted fine quality wines and dinner parties and soirees. With the rise in quality wines, production, distribution, and marketing soon came into effect. Starting with smaller hectares (1 hectare = 2.47acres), harvesting was originally done by manual laborers then centuries later, horses where introduced to the fields, which made cultivating larger parcels much easier. Larger parcels increased grape productions, and farmers found a surplus, that was sold to vintners and large wine producers. With this large production of wine, labels (wine producers) started to sell and trade to distant cities and countries. The introduction to glass bottles and proper storage techniques made wine last longer, which introduced a global market. Through the introduction of foreign markets, the graphing and cultivating of wines sprouted up in the New World, North and South America and Australia. The success of wines in the New World lessened the price of those in Eastern Europe, or Old World wines. A constant fight of production and quality between the two producers, New World wines, especially...
Words: 382 - Pages: 2
...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
...In most societies, wine can be found as a component of celebration or religious ceremony, but in today's world wine has been put into a new arena- a battlefield of tradition and innovation, where old world conservatives clash with new world revolutionaries. The difficulty of producers to achieve "branding" and to establish themselves in a modern, global market has caused the two conflicting worlds to adjust their practices. Wine-makers and new industry players alike find themselves challenged not only by each other but also by the ever-evolving market they find themselves in. In the following paper group ten collectively presents the research and case analysis of the article, “Global Wine War 2009: New World versus Old”, written by Christopher Bartlett. This paper will present the goals and constraints of the new world Australian wine industry breaking into the United States, along with our competitive analysis. We will show you the hurdles that this new world industry faces in a competitive environment and outline their strengths and weaknesses. After identifying the central problems, we will present alternative strategies that the Australian industry can use and the best alternative to take. Finally, we will present a way to implement the best alternative decision. Viticulture, or the cultivation of grapes, spread throughout the Mediterranean region under the Roman Empire and as wine drinking grew in popularity, was soon used in liturgical services, as monasteries started...
Words: 3136 - Pages: 13
...The response to demand of computer and potato chips The supply’s response to demand is always a direct response. Suppliers of any commodity respond to a rise in demand by increasing their supply levels to meet the demand. The direct response stops at the point of equilibrium. The response to demand of potato and computer chips may differ both in the short run and long-run. The potato chips response will be faster in supply increase because the time needed in adjusting its production is shorter compared to the computer chips. On other hand, computer chips response in supply increase will be slower because adjustments to production require more time in cost adjustments. However, the response of both products to a rise in demand will be limited to changes in variable costs. Though as time goes by all costs can be adjusted to increase supply for both goods. Therefore, its’ conclusive to say potato chips response is quicker in the short term because its production cost variables take less time to change compared to computer chips. According to Andreu, Michael and Jerry (1995 in order to increase production in the short run each manufacturer has only one option, which is to change the variable costs that are easily adjustable. In the long run supply response will reach an equilibrium point with no shift for the potatoes because they are regularly consumed. However, a shift is possible if potatoes go out of season and thus, affecting supply. The computer chips supply...
Words: 1373 - Pages: 6
...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
...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...
Words: 4815 - Pages: 20
...Marieshka Barton Wines of Spain Prof. Newton June 15, 2015 Spanish Wine Marketing and Sales Sonoma State University’s Wines of Spain 2015 summer class introduced students to Northern Spain’s prestigious Penedès, Priorat, and Rioja wine regions. Production and marketing professionals from eight wineries hosted our student group and provided facility tours and insights on production, marketing, and exporting. This paper focuses on Northern Spain’s wine industry’s legal regulations, tourism, stewardship, communications, and exports through the lens of wine business marketing. The paper concludes with marketing recommendations relevant to new world (USA, Canada, and Australia) markets. History First, a brief introduction to Spain’s wine history is provided to differentiate Spain from its global competitors and set the context for further analysis. As an “old world” wine culture, Spain has a rich wine history beginning with Phoenician tribes and industrious Romans. Unfortunately, Spain’s nascent wine industry was disrupted due to Islamic rule followed by civil and global wars. In the late 1800’s, French winemakers revolutionized Spain’s weak wine industry. France’s Phylloxera tragedy brought an exodus of French winemakers over the Pyrenees seeking work. By the time Phylloxera reached Spain, viticulturists where already grafting native vines onto American...
Words: 3895 - Pages: 16
...Exporting Oregon Wines to SE Asia With the increasing popularity of Oregon wines, especially its Pinot Noir, state wineries are looking abroad to new markets to expand their reach and increase sales. One of those new emerging markets is Southeast Asia, which consists of Vietnam, Thailand, Singapore, the Philippines, Indonesia, and Malaysia. For the purpose of this paper I have left out Laos, Burma, and Cambodia because of import restrictions and poor demand for imported wines. In 2010, Oregon saw an increase in the number of wine cases exported to 59,537 from 35,664 in 2009. As the fourth largest wine producing state, Oregon is still far behind California, the largest US exporter of wines at 90%. Still the emergence of New World wines, like those in Oregon, continues to increase around the world, and SE Asia is a new and expanding market that has taken a liking to these wines, especially among the affluent. Based on research, this paper will break down by country the perceptions, sociocultural acceptance, competition, taxation and restrictions, distribution channels, and marketing strategies that could be used to introduce Oregon wines. Vietnam In Vietnam, wine is beginning to make inroads with the local peoples in a country where beer and spirits have been the mainstay since the Vietnam War. It saw an increase in US wine imports of 234% between 2010 and 2011 accounting for over $18 million in sales. Most of the wine consumed in the country is by foreigners...
Words: 2562 - Pages: 11
...14 Issues in internationalization management 15 WINE MARKET 17 Profiles of Country Producers 17 CHINESE WINE MARKET 25 Overview 25 Wine market overview 28 Imported wine 32 Italian case 36 Future prospective 45 REFERENCES 48 Bibliography 48 Consulted website 52 INTRODUCTION The purpose of this work is to analyze the growth and evolution of the wine market in China. In particular we will focus on the internationalization of the global wine producer countries in this new emerging market and which are the futures prospective and possibilities of this young market. This paper is composed by four main sections: 1. Theoretical framework; 2. Wine market; 3. Chinese wine market; 4. Italian case. First of all we need to understand what we mean when we speak about internationalization. Through a theoretical chapter, using the existing literature about internationalization, we will explore its theories, evolution and which benefits it may bring to the firm that implement it, showing how important it became in the globalized world in which companies work nowadays. Afterward we are going to analyze, thanks to the data taken by reliable sources, the global market of wine, showing its fragmentation, which are the main player and their characteristics. Now that we have a general panorama, we can concentrate on the Chinese market, its cultural and economic features, and the evolution of its wine market. Finally we will focus on the Italian case ...
Words: 13025 - Pages: 53
