Global Wine War Case 2009 Essay

How were the cut able to dominate the worldwide wine-colored-colored trade for centuries ? What sources of warf arering advantage did they develop to support their exports ? France and the Mediterranean region is closely tied(p) to the Wine History. It has started since the Roman Empire, and has been fully integrated to the European culture with the Christian era Monasteries planted vines and built wineries.The nobility started also planting vineyards as a mark of prestige. In this early grocery, France has been dominant thanks to trace advantages 1. Factors Conditions First, their geographic and climatic features played significant role. As France is in the kernel of Europe culture with suitable climate and soil condition for harvest-time grape, had accrued first-mover advantage and established its place as the dominant foe in the global wine industry. 2. Demand Conditions The Distribution and merchandise make the fame of French wine. The ngociants traded wine between France and other countries and this worked as grape vine effect, increasing the reputation and authorisation of French wine. 3. Innovation. In the late eighteenth century, French producers had experienced a massive transmutation in the market. quite a little production of glass feeding bottles, the use of cork stoppers and the development of pasteurization revolutionized the industry.Those innovation got the scattering and Marketing easier. These innovations change magnitude the stability and longevity of wine which al diminisheded the tape drive of wine to distant places, and birth of global wine market. 4. Government shelter from the government. As the industry developed, the French government controlled the wine production and quality, regulations desire AOC and VDQS, set detailed and quite rigid standards for vineyards and wine makers. Doing so, the local producers were saved with labels. This classification contributed to make the fame of many wine producers (Bordeau x,)Given the longstanding dominance of Old World wine producers, how were the New World producers, such as the Australians, able to expand their market share so rapidly in the 1990s ? The wine production has turned global. Nowadays, the wine production is no longer the preserved domain of France and other Old World countries. few countries such as Australia have seen many strong producers challenging the French dominance. The blowup of their market share has been made possible thanks to see advantages 1 Factors Conditions Geographical and climate factors suitable fields was widely available and less(prenominal) expensive than in France. This fact, matched with a cheaper labor force, contributed to get the price per bottle lower. Innovation have permitted to get the production cost lower. Controlled drip irrigation allowed expansion into marginal land and reduced vintage variability. The harvesting has been mechanized2 Demand conditions The intern demand has kept growing sinc e the post war period. In Australia, the annual consumption per capita grew from 2 liters in 1960 to 24 liters in 2006. This demand enable producers to built their marketing expertise in their plate market during the 1970s, then they export it.3 Firm strategy, structure and rivalriesReinventing the Marketing Model innovative in packaging and marketing. The Australian developed the wine in a box package which is more suitable for the original market. screw caps Australia took advantages of a specialization strategy. They made their bottle more likeable for unaccustomed wine consumers. In addition, new-world producers learned the judge of product differentiation and consumer focused attitudes to create mass appeal. The New World companies controlled the full place chain, extracting margins at every level. new-world producers moved away from multilevel value chains that caused operating inefficiencies. Instead, the new-world producers typically controlled the full-value chain, extracting margins at each level and retaining bargaining power.On a contrary, The main vulnerable aspects of French wine industry were passing fragmented vineyard and wine production, increasing vineyard prices per acre, complex distribution and sales system, long multilevel value chain, risk of bad h grey-haired up and disease and poor roads and complex toll and tax system. Those aspects contributed to the lower of French wine on the market.What advice would you offer today to the head of the French wine industry association ?The extent of differentiation was a political classification system of quality based on rules and controls. => The wine market was complex and highly fragmented. The classifications helped customers understand purchase Focus was on colossal volume production, not quality => Wine became culturally and economically significant. In 1750s, France was the 2nd largest exporter after Italy. As the Global Wine Wars article mentions, marketing style, freedom and willingness to innovate, wine style, and business models of the New World are nigh starting points for the Old World to copy. In order to compete effectively with the New World markets, the experient world wine producers need to assist on various levels. Deregulation of many of the existing laws that appear to be competitive barriers would be a starting point. Getting the European coupler to review the AOC, DOC, and WDQS classifications to create a vastly simpler system would make it easier for them to propagate the mass market.Allying with some of the new world markets such as genus Argentina and Chile would help offset some of the advantages the U.S. and Australia have with regards to land, mechanization of labor, and low cost labor. Taking these markets under their umbrella would lend credence and value to Chilean and Argentinean wines and also open doors to penetrate the growing South American wine market which is not nearly as saturated as other markets. Trading indus try know how for access to cheap land and labor is becoming more and more of a necessity with the result of globalization. Taking advantage of established new world innovations would also be seen as an easy way to increase productivity of small lots.The relatively small lot size which divides the old world into many clear regions is a crippling handicap. If the smaller wine lots were able to immix into cooperatives, they would be able to market more efficiently due to increased resources. Also, despite the originality of the Old World wines, peradventure a break with conventional methods could increase the marketability with the fresh generation Y market.Focusing these revamped marketing efforts in the Asian market with a keen eye towards ensuring the distance problems are resolved as they arise would also give an edge to the old world.By attempting to pull out of the red ocean strategy and move more towards the blue ocean strategy the old world could feasibly end many of th e aspects of competition that are harming it currently. Besides the Far Eastern market, in that location are possibilities in Canada (who shares many old world ties), the Middle East, Africa, and perhaps Latin America. Reanalyzing the government solution for flaws that hurt the old world wine countries would also be a viable means of making the old world more competitive. If all else fails, old world growers could band unneurotic to fund and support the CAV on an international level and see if imperative results could be had from the CAVs worldwide efforts.