BACKGROUND OF THE STUDY
Azienda Vinicola Italiana produced and bottled wines. The company did not buy grapes but rather bought either mosto or bulk wine. They have seen that this policy had the disadvantage that the firm could not assure itself of a consistently high-quality product. Moreover, the administrative manager wished to re-organize the firm in order to exploit its productive capacity to the utmost and, above all, to increase the net profit, which the owners did not consider satisfactory.
The administrative manager assumed a maximum capacity of 900,000 bottles a year which would be equivalent to Lit 1,980 million. The administrative manager decided, therefore, to try to discover a way to change costs and revenue so as to obtain
…show more content…
ibution Margin 934.59 841,134,000.00
Less: Fixed Costs Labor Cost 142,854,000.00 Staff Salaries 118,196,000.00 General Manufacturing Expenses 52,744,000.00 General Administrative Expenses 66,000,000.00 Advertising Expense 86,900,000.00 Interest 82,500,000.00 Depreciation 115,940,000.00 665,134,000.00
Net Income 176,000.00 Contribution Margin Ratio(Contribution Margin/Sales) 40.24%
BEP Sales 711,682.80
BEP in Lire 1,652,907,024.94
ACA 2: Assumes that fixed cost decrease AZIENDA VINICOLA ITALIANA Income Statement (Contribution Margin Approach) For the Year xxxx Production Capacity - 900,000 Unit Cost In Lire
SALES 2,200.00 1,980,000,000.00
Less: Variable Costs Labor Cost 245.78 221,202,000.00 Raw Materials 690.8 621,720,000.00 Axiliary Materials 451.36 406,224,000.00 1,249,146,000.00
Contribution Margin 812.06 730,854,000.00
Less: Fixed Costs Labor Cost 119,168,638.67 Staff Salaries 98,598,964.09 General Manufacturing Expenses 43,998,982.73 General Administrative Expenses 55,057,122.32 Advertising Expense 72,491,877.73 Interest 68,821,402.91 Depreciation 96,717,011.55 554,854,000.00
Net Income 176,000,000.00
Contribution Margin Ratio 36.91%
BEP in
The winery industry can be categorized into red and white wine segments. The red wine segment, measured by tonnage of varietals crushed, has grown at a compounded annual rate of 4.7% for 10 years from 1989 to 1998, and a year over year growth rate of 8.2% from 1998 to 1999. Judging by the strong growth rate experienced in the red wine segment, it is reasonable to conclude that the red wine segment is in the growth phase of the life cycle model. In addition, production of red wine varietals which are relatively unknown such as syrah and sangiovese nearly doubled in a year from 1998 to 1999. The white wine segment, however, is at the mature phase of its life cycle as the segment shrunk slightly by 0.42% from 1998 to 1999. Overall, the industry is still at the growth stage lead by growth in the red wine segment.
For example, the Appellation d’Origin Controllée (AOC) law in France. Italy followed France and also introduced laws and regulations. Producers supported these laws and regulations, they saw this as an opportunity to differentiate their wine and raising the entry barriers. In a later stage other regions in France were given the, usual lower ranked Vin Delimités de Qualite Superieure (VDQS) and the, even lower ranked Vin de Pays, inexpensive but very drinkable wines for French tables and increasingly for exports. Although this movement was quite rigid, due to a belief that quality was linked to terroir.
The dynamics of the global wine industry are better understood through a brief history of wine as well as an overview of the wine making process. Some countries have longer historical and cultural ties with wine then others and that can affect the quality and perception of the product in the eyes of the consumer. Also, the conditions in which the wine grapes are raised and the processes used to make the wine can create a superior wine and therefore a competitive advantage.
There is more adequate to use different method for calculation. Materials budget based on mashing not number of bottles. In January there is 2 mashing per month, but since February until June is 3 each month.
The firm initially produces where MR=MC charging price P1 and quantity Qa. At this price the firm has a large amount of
Vincor does market wine alternatives itself, as a way of dealing with substitute demand. Vincor makes cider and has a wine kit business division (Spagnols) that gives Vincor some product diversification. Partly because of the ease of competition and as part of the differentiation and protection of the Canadian wine industry, Vintners Quality Alliance (VQA), a quality assurance program that identifies Canadian premium grape content, assists in making start-up more difficult for those wishing to emulate Canadian wine brands. The dollars spent on marketing and brand loyalty play a large part in protecting market share and there are certain absolute cost advantages that contribute to establishing some barriers to new competition. Ultimately, there is little cost to the consumer when considering switching brands. Experimentation in wine drinking is often a characteristic of the wine drinking market and thus can contribute to promoting new substitute entry into the market.
The business is owned and operated by Tony Bonatelli and the mission is simple: produce quality, boutique wine at a reasonable price, with the aim of building customer loyalty and securing repeat purchases. Tony’s goal is to establish and maintain a thriving family business that provides an enjoyable lifestyle and comfortable standard of living.
Now that we have exposed our assumptions, we can start going into more detail on the case itself. First, as this is an inventory management case study, we are going to determine the optimal order quantity of each type of wine, so that afterwards we can make include a more financial view of the problem and make some recommendations.
As the marketing manager of Bonatelli Wines, I have been asked to prepare a marketing program to establish Bonatelli Wines in a South East Asian Market in which I believe offers the best opportunity for expansion. Working with my team of staff members Maria, who is responsible for advertising and promotions, Thomas, who manages liaison with the current US distributors, and Rob our freelance web designer we will execute a marketing program that manages to compliment the objective of Bonatelli Wines.
E. & J. Gallo Winery was founded by Ernest and Julio Gallo in 1933. Since then it operated as a privately owned and family-operated corporate. The Gallo family is very knowledgeable from growing grapes process until to own and operating distributorships. Hence, Gallo Winery must retain this family business and pass it to another generation. In short they are advised to concentrate on their single business, such as concentrating on growing grapes. They can conduct an in-depth research and development on growing grapes. Hence they can have a better resource which is grapes from their competitor. Maintaining on their single business is an idea for them to reduce the size
The United States wine industry is a 12 billion dollar industry and is composed of 7,000 wineries and around 1,800 different companies. The three major companies within the industry are Constellation brands, E&J Gallo, and The Wine Group Inc. The industry has made its way through the economic crisis at a better rate than some of the other U.S industries however in order for them to continue to see any type of growth it is important that they acknowledge their issues and find ways in which they can rectify them. The majority of the issues among the industry are problems that cannot be directly controlled by individual wine companies. Therefore it is imperative that wineries find away to use these issues to their
A&A wines has many problems to deal with in staying competitive on a global level. The introduction of E-commerce has brought with it, both opportunities and threats to the existing business model A & A has proven successful up to this point. Both internal and external analysis seems to be required in this particular case study. The steady flux of change occurring both within the company and also outside the company demands a systematic examination of its present business strategy.
Lucchetti, a subsidiary of Quinenco, has entered the Peruvian market after seeing the growth opportunity that had yet to be taken hold of. The company was known for the quality, nutritional value, and competitive prices of its products, most especially its pasta. Amidst the powerful competition, Lucchetti could have succeeded, if it hadn’t been only for the issues it faced in Lima city.
This paper will outline an executive summary of a marketing strategy of a new wine brand to a targeted audience that will incorporate the buyers motivation, psychographics, and demographics. A description of the overall marketing strategy will include advertising, customer relationship manager and a Public Relations campaign. Finally, a an overall strategy to position the brand against the competition will be outlined.
Sometimes the company has to compete with intermediary market groups, since it does not face up to the magnificence wine brands or the popular, low-priced brands. There is also competition from Europe more especially among the French and Italian businesses. Competition also comes from producers of cava and wines produced in other areas like Italy for instance Cal del Bosco. Some fresh wine consumers look for high-quality product with custom and history, but not essentially looking for a high brand image. There is also the fear of collapsing due to confusion whether to continue producing cava or