Upload
jorge-martinez-durazo
View
6.759
Download
12
Embed Size (px)
DESCRIPTION
Citation preview
“Robert Mondavi and the Wine Industry” Jorge Mtz Durazo
Background Mondavi is a winery located in Napa Valley founded by Robert Mondavi. It focuses in premium wine that sells primarily in the United States. Mondavi operates six wineries in California. Robert Mondavi spends a lot of time educating the american publicm about fine wine. In 2001, Robert Mondavi stepped down as a chairmanof the board of the company. The family still held 50% of the company’s share and an overwhelming majority of the voting rights. As an Industry the global wine industry ranges from the $130 billion to $180 billion in retail sales. Industry participants divide the table wine market into five principal segments: jug or commodity (less than $3 per bottle), popular premium ($3 - $7 per bottle), super premium ($7 -$14), ultra ($14 - $25) and luxury (more than $25). There were over 1 million wine producers world wide, and no firm accounts for more of the 1% of global retail sales. The past decade has seen some industry consolidation.
Five Forces Analysis
Threat of Substitute
Products
Medium
The sourcing of quality critical inputs is essential to
guarantee the quality of the end product.
The increasing competition from rival firms,
large volume producers and global alcoholic
beverage companies make produces to
compete among them
High dependency on some distributors
and lack of geographical diversification
pose a serious threat .
Threat of New
Entrants
High
Brand position and equity is paramount in this
industry. Yet big companies can enter this
market via acquisitions, pulverizing the industry
and altering competitive landscape.
Threat of Buyer
High
Threat of Supplier
Medium
The premium wine
industry is highly
pulverize world wide,
thereforecompetitors
arefocused on
regional markets.
Old World • Production quantitive oriented.
• Small family owned vynards
• Consumers produce a lot of their
wine for self-consumption
• Artisanal based wine making
process.
• Highly regulated production of
critical inputs.
• Region oriented wine
classification.
• Invest little in brand equity.
• Product oriented.
New World • Production quality oriented
• Large publicy traded firms
• Consumer purchase nearly all of
their wine
• Technology and automation based
wine making process.
• Acces to multiple avenues for
soucing critical inputs.
• Variety of grapes wine classification.
• Invest heavily in brand equity.
• Product line oriented.
VS.
Indirect Direct
Resources
Tangible
9700 acrees of Vynards in California 1600 acrees of Vynards in Chile, Italy and CA in JV’s 6 operational Vynards in California Highest Quality Fermentation and Aging processes. 1,300 oak Barrel capacity
Intangible
Production based on technology and automation Mondavi’s Brand Equity 35 year Tradition in the industry “Growing Wine” Culture Highly connected worldwide
Capabilities
Reputed brand in the super premium, ultra and luxury wine segments
Innovation oriented
Leverages expertise via JV’s
Top of the line production procceses.
Porter Generic Strategies
How do they gain competitve advantage?
The competitive landscape forces companies to differentiate in order to succeed. In order to do this, Mondavi’s will first have to pick the right segments and products to compete with, preferabily those that better embody its long tradition in wine making, brand equity and culture of innovation. Such strategywill allow to provide the right support to maximize core features of product line in target segments..
C B B
35 year wine making tradition + brand equity +
Growing wine culture + Production innovation
Luxury (more than $25)
Ultra ($14 - $25)
Super premium ($7 -$14)
Popular premium ($3 - $7 per bottle)
20 percent
Account for the 88.5% in 2000, 89.2% in 2001 and 89.8% YTD in 2002 of case volume. In terms of Revenues, these brands
contribute 74.3% in 2000, 73.8% in 2001 and 76.3% YTD in 2002
80 percent
From the 16 brands of wine in Robert Mondavi’s portfolio Woodbridge, Robert
Mondavil Coastal
While the remaining 75% of the brands focused on the Ultra
and Luxury segments
From the 16 brands of wine in Robert Mondavi’s portfolio, 25% focused on the
Popular and Super premium markets
The remaining 13 brands provide only marginal value in economic terms. Yet..
Enhanced Reputation
Experimen
-tation
Expertise
Sharing
Economies of Scope
Innovation
…became the first
California vitntner to
partner with an elite French winemaker
and to produce and ultra premium wine
in America.
…Mondavi began working
with NASA in 1993 to apply
remote sensing and digital mapping technologies…
…The company
introduced a
capsule-free, flange-
top bottle that many
soon adopted…
Nothing provided more prestige for
Mondavi that the Opus One pertnership
…The joint venture ship the bulk wine to California for aging
and bottling and sold approx. 25% of the porduct in the US.
In summary… Critical Issues
Recomendation Implementation
Dependency on…
►US wine martket
►Woodbridge and Coastal brands for cash flows
Increasing competition…
►In all segments and from all kinds of competitors.
Resource Allocation…
►High concentration of brands in ultra and luxury segment.
►Opaque benefits from synergies and JV’s.
Future growth…
►Decreasing consumption from target markets and segments.
►Underperforming brands in portfolio.
Diversify its…
►Target Markets and segments.
►Cash streams by supporting portfolio brands that perform accordingly.
Clear Differentiation…
►Increase brand clarity by communi-cating value proposition of each brand.
Capital efficiency…
►Evaluate financial performance,cagr and roe of each brand in the portfolio.
►Identify JV’s that show good prospects of growth for buyout/investment.
Future growth…
►Gain market share in those regions that show increasing consumption.
►Asses brand performance in niche market.
Explore…
►Spain, Belgium, UK, Japan and China show positive growth in consumption.
►Shifts in consumer prefrences as they substitute from Jug to Popular and Super to Ultra.
Brand equity…
►Identified niche markets to promote
customize brands/products.
Concentrate…
►Similar brands to improve Cost of capital.
►Expertise from other ventures to enhanced knwoledge base.
Future growth…
►Position brands that show better profit margin in existing and emerging markets.