Global Wine War 2009, Old World Versus New World
| case paper: global wine war 2009 |
The assignment for this week was to write a paper based on the case Global Wine War 2009: New World versus Old. We experienced that it was an interesting case considering both Porter’s five forces model and Resource-Based theory, because they give two different perspectives of competitive advantage: Outside in and Inside out. Besides that we could have a closer look at innovations and what they mean for the competitiveness in the world wine market. In this paper we make an effort in explaining what the main aspects are of …show more content…
In 1976, the British organized the Judgment of Paris, a panel to rate top wines from France and California. The American entries took up honors in both red and white wine competition. This was a wake-up call for the producers in the Old World. They finally acknowledged the quality and competition of the New World Wine.
Global Wine War
There were several demand patterns that changed. There was a decline in the demand for wine in the Old World countries. Meanwhile, demand was growing in many importing wine countries. This shift in market demand escalated into competition for export sales: a global wine war. Besides that, there was a shift in the quality demanded, consumers wanted to have premium wine. Another change was the fashion element that influenced the demand of wine.
The new world companies were able to sense the changes in demand. While the Old World companies could not keep up with the fast changing environment due to the fact of not controlling the value chain and the rules and regulations. Besides this, the size of companies also gave the New World an advantage.
To respond better to consumer preferences, brand power became important in the global wine market. The New World companies owned 14 of the top 10 wine brands in 2007. Still, the Old World was not able to keep up with the competitive environment created by the New World. Due to old regulations in the Old World, they were not able to move to a more market driven policy.
In the Old World, the