Vina San Pedro (VSP)
Question 1) Apply the four-step problem-solving process to the problems facing Matias Elton, who became CEO in 1997:
The problems identified as parts of Matias Elton's charter are:
1) Task of growing domestic market share.
2) Increasing quality to capture higher margin sales.
3) Expanding Export sales.
4) Achieving further economies of scale.
Contributing factors or symptoms to VSP's economic and production issues prior to Matias Elton's position as CEO are:
1) From 1941-1994 the company who purchased the winery from the original family owners, "was however barely profitable and survived by producing inexpensive wines for the domestic market". The assumption is that they could not overcome their business shortfalls making this a performance and opportunity gap.
2) The company, who purchased VSP in 1941, expanded the winery to become the largest single-site vineyard in Chile. The assumption is that they could not make up the cost of expansion over time in order to make the winery more profitable, through marketing and distribution.
3) 1986 economic crisis in Chile. The assumption is that this caused economic issues for VSP, CCU and the consumer markets.
The diagnoses or the root cause of the problems that Matias Elton's faced were centered on:
1) The early years of CCU control; CCU had 3 years of loss, yet they reduced the company's debt by Ch$7.8 billion. The assumption is although CCU quintupled the number of customers to 30,000, it could not overcome the business shortfalls of " ...