CASE: GLOBAL WINE WARS (A) Question 1 During the last decades, some remarkable evolutions of the global wine industry have dramatically influenced the base of the industry structure, with technological update, innovation, and new players coming in, the wine market as well as the competition within this market have come to a new dimension. In the following, we will analyze briefly the main points of this evolution and group those points into several categories. Change on the demand side ‐ Demand
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Global Wine War 1. How were the French able to dominate the worldwide wine trade for centuries? The French were the first to dominate the wine trade and largely due to their time advantage the European Union was able to create laws to assimilate all wine produced from the regions of France and Italy. This absolutely helped shaped the wine industry by having standards and laws; anyone who later produced wine had the structure to produce quality based on the French laws created. Being isolated
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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
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Global Wine Wars Perform a STEEP analysis to understand the general environment facing the global wine industry. How will the wine-producing countries/companies be affected by external factors? Social: There is a 20% drop in worldwide wine consumption but consumers demand more on premium wine (10 liters to 15 liters in EU) and less on basic wine (31 liters to 18 liters in EU). There is a decline in wine drinking culture, rise in importing countries, and growing demand in Asia markets. Figure
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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
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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
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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
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increasingly global wine industry for centuries? What sources of competitive advantage were they able to develop to support their exports? Where were they vulnerable? “By the Christian era, wine became part of the liturgical services, and monasteries planted vines and built wineries. By the Middle Ages, the European nobility began planting vineyards as a mark of prestige, competing with one another in the quality of wine served at their tables – the first niche market for premium wine.” The French
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the global wine industry due to the low effect of the five forces of competition. The main barriers to entry that kept the threat of competitors low for the French were incumbency advantages, unequal access to distribution channels and restrictive government policies. This first barrier, incumbency advantages, can be explained by the domestic French Wine Industry in the late 18th to mid 19th century that was already supporting 1.5 million families for both the growing of grapes and other wine-related
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dominant competitors in the increasingly global wine industry for centuries? What sources of competitive advantage were they able to develop? Where were they vulnerable? By the Christian era, wine became part of the liturgical services and monasteries planted vines and built wineries and the European nobility began planting vineyards as a symbol of prestige, competing in quality of wine they serve on their table, i.e. start of premium wine market. French wine producers became the dominant competitor
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