Global Wine War

1747 words 7 pages
1. How did the French become the dominant competitors in the increasingly global wine industry for centuries? What sources of competitive advantage were they able to develop? Where were they vulnerable?
By the Christian era, wine became part of the liturgical services and monasteries planted vines and built wineries and the European nobility began planting vineyards as a symbol of prestige, competing in quality of wine they serve on their table, i.e. start of premium wine market. French wine producers became the dominant competitor as a result of four reasons. First, their geographic and climatic features played significant role. As France is in the middle of Europe culture with suitable climate and soil condition for harvesting grape,
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Besides, they tried to appeal the palates unaccustomed to wine, launched products for this market segment. The big CPG companies -like Coca-Cola, Nestle etc- entered the market, even they left after a decade, they influence the New World wine market with their customer focused attitude and sophisticated marketing skills. Lastly, the New World producers controlled the whole value chain, extracting margins at every level and retaining bargain power. Overall, changes in production and marketing aspects of wine by New World countries led the market share loss of the traditional wine producer countries. 3. What advice would you offer today to the head of the French wine industry association? To the owner of a mid-size, well-regarded Bordeaux vineyard producing wines in the premium and super premium categories?
One of the major disadvantages that French wine industry faces is the strict AOC regulations. Up to a point this is an advantage for French wine industry since these regulations forces the French wine producers to produce the best wine in the world but with the emerge of the New World players, the industry environment changed and these regulations turned out to be encumbering the French wine industry with reducing the competitive power of French industry. If I were the French wine industry association head, I would try to lessen the restrictions coming from AOC. For example, I would try to increase the usage of technology in


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