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Assessing Industry Threats and Opportunities
Case: Competition in the Global Wine Industry (CB)
Discussion Agenda: You have been selected as a consultant by a U.S. wine industry trade association to recommend internationalization strategies for U.S. wine producers. Assess the attractiveness of the global wine industry and recommend specific country markets that would be suitable for U.S. wine producers to target for entry. You should then suggest appropriate strategies that U.S. wine producers should consider when entering new markets. You should be able to use the concepts and tools of analysis presented in Chapters 2 and 6 to support your analysis and recommendations.
Case Preparation Questions:
1. What are the dominant business and economic characteristics of the global wine industry? What is the industry like?
? Global wine market decreased from 1997 to 1998
? US wineries were switching from family management to professional management
2. What is competition like in the global wine industry? What competitive forces seem to have the greatest effect on industry attractiveness? Justify your conclusions.
? Global wine market was becoming more significant and competitive ? about 25% of wine purchased was produced in a different country ? up from 17%
o Wine used to be locally produced and consumed, but now that is changing
o US wine industry only exported 13% of their production while Old World wineries exported about 25%, Argentina at 40%, Chile at 80%
? Old wine producing countries had begun to put more emphasis on exporting
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