...Robert Mondavi Case Robert Mondavi is facing several threats in 2002, the most important of which is increasing competition in the popular premium segment. The company in 2001 derived 57% of its revenue from the Woodbridge brand and pricing pressure is being applied by Gallo, Fosters and jug producers. Additional pricing pressure is coming from the Australian wines infiltrating the US and UK markets, growing their sales in the US at the rate of 30% per year. Additional challenges include customer dissatisfaction with the current sales representation. The company also has opportunities. Its Robert Mondavi Winery name is held in high esteem and wines of this label command premium prices. The company has consistent financial performance over the preceding four years with growing sales and income. The company has developed advanced production methods that give its wines consistent quality and modest costs of production. Business Environment / Attractiveness of the Wine Industry Among producers in the size range of Mondavi, the wine industry has many companies, which generate net income of about 10% of sales. This would compare to such mainstream US industries as real estate leasing, food manufacturing and agriculture. The barriers to basic entry in the industry are very small. However, the building of a recognized brand name which allows pricing control is a time consuming process, sometimes representing generations of work. The industry is experiencing consolidation...
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...Robert Mondavi Wine Case Study Robet Mondavi Winery was created in 1966, in Napa Valley. At its debut the company “became one of America’s most innovative and high quality winemakers.” introducing many new techniques such as Stainless tanks or the use of small French oak barrels. Robert Mondavi “set out to educate American consumers and to enhance their appreciation of fine wine” and also became a promoter of the California wine industry. The wine industry is divided in 5 segments. RMW is has developped 16 different brands and is present in all segments except jug wine. Source image :http://image.slidesharecdn.com/robertmondaviandthewineindustrycase-130320190248-phpapp01/95/robert-mondavi-and-the-wine-industry-case-8-638.jpg?cb=1363824203 RMW bestselling wine is the Woodbridge which represented 76% of the company’s case and 57% of its revenue in 2001. But there is increasing competition in this segment with many important companies entering this segment. In the mid-90’s Mondavi launched 3 joint ventures with French, Italian and Chilean’s firms. “Mondavi owned and leased 9’700 acres of vineyards in California and the joint ventures controlled additional 1’600 acres in Chile, Italy, and California.” But these vineyards provide only 7% of the company’s total grape supply in 2001. Although the firm did invest a lot in the 80’s and 90’s, acquiring many wineries in California, the production could not keep up with increasing consumption, making the firm highly dependent on its...
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...Robert Mondavi Corp. Analysis I. Summary Company founded in 1966 by Robert Mondavi in Napa Valley, California Company vision to make 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...
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...Case Background Robert Mondavi is one of the pioneers of the wine industry and can also be credited to bringing the wine industry to the Americas from Europe. Robert Mondavi began wine making in the relavitely then new region in California back in 1943 and has since become the most innovative and leading winemakers in America. Initially to stimulate and create a market for wine drinkers in America, Robert Mondavi embarked on a journey to educate and enlighten the American people about the culture of enjoying wine and food, this soon also became integrated into the mission and the vision of the organization. Later on in the 70’s Robert Mondavi entered into the popular premium wine segment and also bought a local co-operative winery to handle production, in addition to partnering with a French winery to manufacture a premium wine for the first time in America, the company remained stable and in its initial state till the 90’s. In 1993 finally Robert Mondavi offered a public offering to boost investments and generate capital for land acquisitions and wine replanting due to a virus which has eliminated almost 90% of the crop. Throughout the 90’s Robert Mondavi had controlled expansion with some big projects like the mapping technology developed with NASA and also foreign partnerships with wineries in Chile and Australia. Problem Statement Michael Mondavi and Greg Evans have realised that since their markets are heavily dependent on the US markets, they face a legitimate threat...
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...Robert Mondavi and the Wine Industry Analysis EXECUTIVE SUMMARY The Robert Mondavi Winery became one of America’s most innovative, high-quality winemakers in the late 1960s and early 1970s. There are over 1 million wine producers worldwide and no winery accounted for more than 1% of global retail sales. Because of this and the fact that there are many substitutes, there is an issue to try to gain economies of scale and become a leader in the wine market. Wine tends to stay it its local region, which makes it harder to compete with its substitutes. In the strategic analysis portion of this case analysis, we discuss Porter’s Five Forces and how they affect the Robert Mondavi Winery. We conclude that in order for the winery to stay competitive and gain economies of scale, they should develop new joint ventures and reform their company structure into a decentralized federation. PROBLEM IDENTIFICATION After analyzing Robert Mondavi Winery the biggest problem they face being in the wine industry is the threat of substitution of their product. There is a range of different products in the alcohol industry. Wine is not the most consumed alcoholic drink in the world, making it a treat to having sustained and effective substitute products. Robert Mondavi Winery’s second biggest problem they must overcome is being able to sustain a competitive advantage over rival companies in different areas. Such areas include the Winery staying local and not being able to compete in...
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...International Business & Economics Research Journal Volume 2, Number 9 The Changing Structure Of The Global Wine Industry Michael A. Roberto (E-mail: mroberto@hbs.edu), Harvard Business School Abstract This paper examines the distinctive economic structures that exist in the wine industry in various regions of the world, and it identifies the critical forces driving changes in the structure of this industry. The paper accomplishes these objectives by applying concepts from industrial organization economics, agency theory, and the field of competitive strategy. T he economic structure of an industry affects the intensity of competition and the average profitability of firms in a particular market.1 While strategy scholars have debated the extent to which industry structure explains differences in firm profitability, virtually no one disputes the idea that structural forces have a sizeable impact.2 More recently, researchers have demonstrated that industries exhibit substantial structural differences across various geographic markets around the world. These structural differences are driven by institutional heterogeneity and contrasting patterns of historical development. 3 Over time, the structure of a global industry can change dramatically. In particular, many industries have experienced consolidation in recent years. Industry consolidation raises several important questions for scholars and practitioners. First, why do these structural shifts take place? Second...
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...2011 Annual Report at every occasion chaiRman’S letteR In an era of constant, rapid and unpredictable change, the concept of staying the course, especially in business, can seem like an impossible mission. It takes strong and confident leadership, a clear and focused strategy and a team of talented people who are willing to go the distance in order to achieve the goal. Since fiscal 2010, the goal at Constellation Brands has been a singular one: profitable organic growth. During this period, we have embarked on an evolutionary journey that has taken us from a collection of stellar brands and acquired businesses to a highly disciplined and tightly aligned company that is, at every occasion, capitalizing on company-wide efficiencies and best practices to strengthen our operations, our people and our brands. Our fiscal 2011 results serve as a shining indicator that our collective efforts are paying off. More importantly, they validate the importance of staying true to one’s commitments. At Constellation Brands, our commitments are unwavering…to continue to grow our business and our premium brands, to enrich the communities where we live and work and to elevate life with every glass raised. These commitments are being realized every day because of our people, who are among the best and brightest in the industry. Dedicated, innovative and determined, our employees have stayed the course through unexpected challenges and increasingly higher expectations placed on them. We are...
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...Book Review: The House of Mondavi: The Rise and Fall of an American Wine Dynasty by Julia Flynn Siler November 2004, the house of Mondavi took its final stand when accepting a $1.3 Billion bid from Constellation Brands, ending a family run business of over 100 years. This family business marks the effective beginning of the American wine industry, credit for establishing Napa Valley, and recognized as Unites State’s largest wine producer. Julia Flynn Siler, a writer for the Wall Street Journal, tackles the complicated story of the clashing Mondavi family, in her book, The House of Mondavi: The Rise and Fall of an American Wine Dynasty. After hundreds of interviews, Julia was able to give picture perfect descriptions of each character and their role in the Mondavi family business. The book starts by telling the story of Cecar and Rosa; two Italian immigrants who lived a poor life economically but rich with love. They both had an admiration for wine and enjoyed hours of quality family time appreciating every spectrum of the grapes. Julia went back to Indiana, where the Mondavi’s originally lived, and found out that the couple just followed their heart, moved to California with the solemn goal of becoming wine connoisseurs. Once the Mondavi’s got to California they realized their knowledge of wine surpassed those of the current winery owners and invested in their first wine garden. Roberto and Peter Mondavi, the second generation, both inherited Charles Krug...
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...loyalty (Burns et al., 2001).Next, although RMC is not the price leader in the wine industry, nevertheless, the company benefits from the high prices set by its limited production of Opus One which is priced between $90 and $100 a bottle in more than 65 world markets.RMC proves to have some strong key competitive advantages which distinguish the company amongst other rivals. Firstly, Robert Mondavi, being a dynamic sales man in the early years, never spent money on advertising. Instead he relied on trade shows, awards, salesmanship and showmanship. This is clearly described in the case study in which he spent entertaining influential people within the industry and invited the top wine writers to the RMC facility for free meals (Silverman & Castaldi 1999). In addition, he would conduct blind tasting of the RMC wines against reputable French and Italian wines so that the writers could taste for themselves. For over a decade, Mondavi traveled throughout the country and abroad as the company's chief salesperson. Consequently, the RMC wines were able to increase its recognition of and demand for the wines, Mondavi began slowly raising the prices until they were selling for as much as comparable French wines (Thompson & Strickland 2003).Secondly, RMC's strong brand name is associated with wine-growing excellence, award-winning products and marketing innovation. In this situation, RMC enjoys one of the most recognized brands by producing a limited quantity of super- to ultra premium wines...
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...1 2 3 TO LAKE COUNTY 4 5 6 7 A 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 9 10 7 BARLOW DUN E AW A . L LN CALISTOGA TOM EDDY JAX BENNETT LN. 2 JERICHO CANYON OLD LAWLEY TOLL RD. COOMBSVILLE 17 SUMMERS LAVA VINE ENVY/CARTER SL UBB N. B 6 DIAMOND CREEK T W.H. SMITH VERMEIL N COL LIN ST. B CELLARS 11 12 13 14 DYER C AZALEA SPRINGS CASTELLO DI AMOROSA BEHRENS FAMILY SHERWIN FAMILY MARSTON L M ARK EAD LN. 15 16 BRAVANTE COOK FAMILY FAILA CADE BALE LN. BIG TREE RD. HOWELL AT THE MOON 17 EHLERS LN TUDAL Map not to scale . VINEYD 29 TRINCHERO FANTESCA BOESCHEN LODI LN. DOZEN VINTNERS REVANA FAMILY MARKHAM BREMER FAMILY TAMBER BEY BELLO FAMILY CLIF FAMILY DOWDELL DAVIS FULTON CROCKER & STARR CHAIX LN. ROS S 13 PRATT AVE . POPE ST. I RD D . ST. HELENA WINERY We encourage responsible drinking. Please do not drink and drive. It is illegal to operate a motor vehicle at or above .08 BAC in the state of California. Only wineries with public access shown VALLE Y RD. CONN Wineries with Public Tasting Rooms Wineries Requiring an Appointment Additional Winery Tasting Rooms in the downtown areas WineCountry.com Map Sponsor TAPLIN RD. 12 THE TERRACES HALL AUBERGE RD. E DEL DOTTO WHITEHALL LANE TRES SABORES 11 4 RUTHERFORD RD. NIEBAUM LANE MANLEY LANE MIDSUMMER CELLARS 8 BROWN ESTATE F ´ YOUNT MILL RD. 10 GARGIULO...
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...benefits and drawbacks to the Mondavi Winery of becoming a public company? 300 words maximum Once the Mondavi Winery becomes a public company, there will be an immense increase in its equity and it can be used to fund Mondavi’s rapid growth. Despite the fact that family control can be retained by designing the rules of IPO, the uncertainty degree would still be higher than the company used to be. The fluctuation of share price would also affect the company image. Moreover, Mondavi’s historical financial performance, which had previously been a guarded secret, was made available to the public. 2. What types of investors are most likely to be interested in the company? How could you target those investors? 300 words maximum Wine stocks appeal to ‘the hobby stock holder’ who wants to be part of this industry. Investors can be targeted through the following process: 1. Look for wine lovers who know how to appreciate US-made premium wines. Some useful sources may be obtained from wine-related clubs, associations and institutes. 2. Hold social fairs or other events and share stories and visions with these potential investors instead of simply analysing financial data to have them involved in picturing a better future with strong evidences. 3. Emphasize on the expected big leap of Mondavi, which may serve as a growth booster of the whole US wine industry to arouse the need of purchasing Mondavi stock. 3. How would you recommend Robert Mondavi respond to the market’s current...
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...Malko Ebers / Simon Wied SWOT Analysis Robert Mondavi and the Wine Industry Seminar paper Dokument Nr. V27469 http://www.grin.com/ ISBN 978-3-638-29511-6 9 783638 295116 Midterm Group Project Robert Mondavi & The Wine Industry SWOT Analysis Course Strategic Management: Concepts & Cases Chair of Management, especially Strategy and Leadership University of Konstanz - Summer Term 2004 by Malko Ebers Simon Wied Malko Ebers, Simon Wied II Structure 1. Introduction ............................................................................................................... 2. Opportunities vs. Threats: Analysis of the environment the Robert Mondavi Company is settled in ................ 2.1 Global environment ............................................................................................ 2.2 The US wine industry – an overview ................................................................. 2.3 Competitive forces in the US wine industry ...................................................... 2.3.1 Potential entrants ....................................................................................... 2.3.2 Bargaining power of buyers ...................................................................... 2.3.3 Bargaining power of suppliers .................................................................. 2.3.4 Closeness of substitutes to the industry’s products ................................... 2.3.5 Intensity of rivalry among...
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...Autumn 15 ROBERT MONDAVI WINE INDUSTRY Dougal POGET & Caroline MULHAUSER U N I V E R S I T Y O F A P P L I E D S C I E N C E -‐ G E N E V A H A U T E E C O L E D E G E S T I O N – G E N E V E Mondavi Wine Industry – Case Study Dougal Poget & Caroline Mulhauser TABLE DES MATIERES 1. Read, reflect on and analyze the company situation within the context of a changing wine industry. ................................................................................................................ 4 2. Think about an outline all of the external, internal, competitive, market, and consumer factors, changes and trends affecting Mondavi in their business model. 5 External factors: ......................................................................................................................................... 5 Internal factors (Integration level) ...................................................................................................... 5 Competition ..............................................
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...profit with undeniably high demand. The case study by Michael Roberto examines the history of wine and winemaking, and describes the very process of growing the grapes, maintaining the vineyard, fermenting and aging the wine, bottling, packaging, marketing and distribution. The author of the case study thoroughly describes the basics of winemaking, traces the history of wine to the modern day, analyzes the current wine market and competition, presents relevant data, and analyzes the implications of wine market upon Robert Mondavi and his company. The advantages of investing into the winemaking business are quite obvious. Wine industry never slowed down exhibiting constant growth of 1-2% over the years. According to Roberto, there are over 1 million wine producers worldwide with various representation in different parts of the world that share yearly profits of $130 to $180 billion in retail sales (p.1). Robert Mondavi’s winery, described in the case, proved to be a profitable business that showed a substantial growth rate of 28% since fiscal year 1994 and market value of $600 million (p.1). Wine industry is a very profitable business that is an excellent target for investment. I would invest into a reputable and growing winemaking company with no reservations. Robert Mondavi has a significant advantage over the smaller independent wineries due to the name recognition after the efforts to advertise the company and its products. Robert Monbdavi’s business has established a loytal...
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...Case 3 Robert Mondavi and the Wine Industry 1) Evaluate the structure of the global wine industry? How and why is that structure changing? What threats do these changes present for Robert Mondavi? The structure of the wine industry is quite different around the world. The barrier to entry is relatively higher in the New World than in the Old World. Referring to the market data on the level of concentration in 1998, people can see a few players dominate the markets in Australia and the U.S. while the level of concentration is quite low in Europe. Therefore, the rivalry in Old World is intense there. The Old Market consumers are more sophisticated and price sensitive than those in the New World. The main sales channels are supermarkets and other off-premise locations in Europe, which will allow more buying power to consumers. Whereas, the variety of wine in the New World brings in differentiation in products, which leads to lower buying power. In terms of power of suppliers, Wineries in Europe is are not much exposed to the external force because they use grape mainly they produce for higher quality of wine. However, the makers in the New World depend on outsourcing to some extent. Therefore, the power of supplier is stronger in the New World. However, in terms of risks involved in the grape farming, the outsourcing can helps diversify the risks. In addition, the regulatory environment in Europe restricts the European wine makers to diverse...
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