Recently however, there have been many external forces that may serve to threaten the long-term profitability of the firm: sales have been decreasing over the last 6 months due to a staggering economy, Australian imports are on the rise, shrinking the size of the pie for domestic firms, and there has been an industry wide trend to consolidate; existing firms are merging and producers of beer and spirits, who already have strong brand recognition, are starting to produce their own wine labels. The question now becomes, what can Robert Mondavi do to ensure that it sustains its leading market position? To help answer this question we must have a good understanding of how the firm operates within its competitive environment. First off, we must define the industry and market in which Mondavi operates. The range of Mondavi brands span from lower end premium, such as Woodbridge, to its luxury premium brands like the esteemed Opus One.
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The executives estate that, as the competitors spent considerable amount of money pursuing aggressive acquisition strategies, they are doing well on the track of organic growth of its premier brands, as they note …show more content… The advantage for high quality premium wines is that they are able to build a strong brand reputation, which means many distributors and retailers use this wines for differentiation.
In this segment of consuming is relatively price insensible, which follows the importance of the brand identity and differentiation. This pushes down the buyer force, but on the other hand, pushes up the need of producers to be careful of the brand reputation and marketing.
In this way, the trend is massive advertisement of jug wine producers, and channel promotion of premium wineries. Buyers Power. Distribution increasing consolidation, which means they have more force to negotiate with premium wine producers. This trend seems to have even more impact than the positioning and reputation and quality of a brand. In this sense, the buyer power is high. Barriers to Entry The wine industry have some key success factors, specially related to access to inputs, proprietary learning curve, economies of scales, capital requirements, access to distributors channels and product differentiation.
As indicated before, the grapes are a key input to determine the quality of wine production. Usually these grapes are grown in specific lands, and following specific vineyard development. Currently the lands are very expensive, especially in USA and Europe. On the other hand, the development of new vineyards is also expensive, thus capital consuming. In this sense, we have that the Related Documents Robert Mondavi Case Study Essay 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 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….
How and why is this structure changing? Winemakers had minimal cross-border interaction and followed local traditions. The four largest European producers, France, Italy, Spain, and …show more content… Distributors wish to avoid products that may sit on store shelves too long and prefer brands that are proven bestsellers. The US Supreme Court ruling that effectively relaxes some direct shipping prohibitions, offers some recourse to small wineries to reach US wine consumers. It remains to be seen how small wineries can employ creative marketing and distribution strategies to enjoy the benefits of direct marketing when shipment involves small quantities and a high cost. At the retail level, consolidation is occurring in both on premise and in off premise sectors.
Robert Mondavi & the Wine Industry Essay
LinkedIn This wine is mild bodied and nicely balanced concerning its acidity and fruit. It displays delicious delicate grapefruit flavors with notes of Mild lime and delicate minerality. Dry and refreshing. A nice Seashore wine!