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Chulalongkorn University (Thailand)
Brown-Forman Wine Estates (WE) Case Analysis
Proudly Presented by
Team Members
Vipada Ungvichian
Anek Tipayavat
Prinya Dharmarak
Grace Wongseelashote
Advisor: Prof. Melanie Billings-Yun
Executive Summary
Brown-Forman Wine Estates (WE) is a new group in the Brown-Forman Corporation (BFC). It specializes in the sale of high quality Californian and Australian wines. Currently, it is facing slowing growth in the US premium markets. However, there are opportunities to expand abroad as the demand for premium wines are increasing in the global market.
Three proposed alternatives are very thorough. Putting more emphasis on the U.S. premium segments is can be very profitable, as it relies upon WE's core competency. Conversely, WE could try to increase sales of lower priced brands simultaneously with attempting to reduce costs to better the entire company performance. Lastly, WE could establish an international foothold, which would reduce cost per unit through economies of scale, while widening WE's market base.
WE's crucial strength is its competency and high degree of experience in premium wines. Hence, WE should deploy such advantage to the maximum level by expanding its U.S. premium wine market through focusing on on-premises sales, as this channel yields the highest profit margin. Another attractively profitable market to pursue is East Asia, where demand for premium wines is expected to grow enormously.
The first part of the implementation would be to transfer the lower imaged brand, Bel Arbor, to BFC. This is to remove the risk of losing prestige of the high end products. Secondly, Bonterra, a premium bran ...