The Framework That Transformed the U.S. Wine Industry

For the last ten years, Blue Ocean Strategy has challenged business leaders to explore uncontested marketplaces -- or what we call "blue oceans." But this strategy goes beyond theory: It provides a set of methodologies and tools that can help managers pursue value innovation systematically and make blue oceans attainable for all aspiring organizations and individuals. Take, for instance, the wine industry.
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Historically, the industry has proudly promoted wine as a refined beverage with a long history and tradition. This has alienated a large portion of consumers who have viewed wine as intimidating and pretentious. Alternatives -- beer, spirits and ready-to-drink cocktails -- have captured three times as many U.S. consumer-alcohol sales.
The Australian winery Casella Wines addressed these problems with a new strategy that transformed the market, but not by competing on traditional factors.
Instead, Casella looked to beer and ready-to-drink cocktails and created Yellow Tail, a fun and easy-to-drink nontraditional wine brand. Yellow Tail was designed to embody the characteristics of Australia's culture: bold, laid back, fun and adventurous. Yellow Tail aimed to represent a leap in value that appealed to a broad cross-section of alcohol beverage consumers.
Casella Wines’ success with Yellow Tail was not by luck. Finding that many Americans, too, saw wine as a turnoff, the winery created a new value curve by applying what we call the four actions framework: 1. Eliminate: Which of the factors that the industry takes for granted should be eliminated? 2. Reduce: Which factors should be reduced well below the industry’s standard? 3. Raise: Which factors should be raised well above the industry’s standard? 4. Create: Which factors should be created