Robert Mondavi and the Wine Industry Case
Mark Alexander Marcello                                                                   Strategic Management РProfessor Yu   Tuesday 7-9:30pm                                                                                            2/16/2015                      Mid-term: Robert Mondavi and The Wine IndustryIn order to analyze the scope of the global wine industry, it is important to understand the full breadth and depth of the market.  According to the Robert Mondavi case, the global wine industry was projected to garner retail sales between $130 Р$180 billion dollars, in the early 21st century.   Wine vineyards were producing products within three categories, which included table, dessert and sparking wine.  On a global scale, table wine accounted for an overwhelming majority of the industry market share, specifically the premium wine segment. Worldwide wine producers tallied over 1 million firms with varied market concentration from country to country.  For example, four firms accounted for 75% of the Australian market, while twenty firms competed for 75% of the US market share.  At the forefront, Europe dominated the global wine industry with over 75% of the world’s total consumption and production, which was championed by three countries: France, Italy and Spain.

Before employing Porter‚Äôs 5 forces analysis to better understand the wine industry from the incumbent position of Robert Mondavi Winery, it is important recognize the industrial and structural changes that were occurring at the time of the case. ¬† ¬†The global wine industry can be looked at from two perspective, the ‚ÄėOld World‚Äô, comprised of European producers, was beginning to lose its market share to ‚ÄėNew World‚Äô producers, such as US, Australia, Chile and South Africa. ¬†This is a result of increased market competition because larger, publicly traded companies investing in New World markets. ¬†The investments of New World producers were spending more money on technology and automation, which smaller-family owned vineyards of the Old World could not match. ¬†More specifically, the New World process of harvesting grapes was not only more efficient, but they now had more extensive, well-developed markets for grapes, which made the process much easier for sourcing raw materials. ¬†Additionally, Old World producers were at a disadvantage as government regulation imposed restrictions that were controlling the winemaking process.¬† ¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† ¬† ¬† ¬† ¬† Porter‚Äôs 5 Forces Analysis Rivalry (High threat of competition) Listed below are the three types of competitors in the global wine industry: 1) rival firms who were making premium wines 2) large volume producers moving into premium wine business 3) global alcoholic beverage brands acquiring wineries. ¬†Focused competitor firmsKendall-Jackson¬†‚Äď 4 premium products in high-end luxury market; ¬†$400MM in revenue; purchased land and build wineriesTrinchero-Estates¬†(Sutter Home) ‚Äď consumer friendly premium wine producer; top 10 US wine brands; $400MM in sales

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Wine Industryin Order And Scope Of The Global Wine Industry. (April 3, 2021). Retrieved from https://www.freeessays.education/wine-industryin-order-and-scope-of-the-global-wine-industry-essay/