Case Study: Robert Mondavi Corporation

5631 Words Apr 18th, 2005 23 Pages
1. EXECUTIVE SUMMARY……………………………………………..5

2. BACKGROUND OF THE CASE STUDY…………………………….6

3. ANALYSIS & IMPLICATIONS OF PORTER'S FIVE
COMPETITIVE PRESSURES……………………………………..7-17
3.1. The Potential Entry of New Competitors
3.2. Competitive Pressures from Substitutes Products
3.3. Bargaining Power of Buyers
3.4. Bargaining Power of Suppliers
3.5. The Rivalry among Competing Sellers

4. ANALYSIS OF THE STRATEGIC GROUP MAPPING……….18-20

5. KEY SUCCESS FACTORS OF THE WINE INDUSTRY………21-23
5.1. World famous growing areas
5.2. Larger growing market for premium wines
5.3. Favorable demographic and macro trends
5.4. Quality and affordable prices
5.5. Product differentiation
5.6. Different wine
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(Source: Adapted from Silverman 1999, ‘Competition in the Global Wine Industry', Wines & Vines, July 2000).

3.1. The Potential Entry of New Entrants
New entrants find it very hard to compete with large and established companies within the industry, such as E. & J. Gallo Winery, Canandaigua Wine Company (CWC), and Beringer Wine Estate (BWE) because of the huge amount of advertising and marketing it would take to gain market share.

Next, wine industry is a capital intensive. This is because producing wine on large scales requires great capital expenditures and therefore, a new entrant would need to secure a huge amount of capital funding to compete in the industry. A huge amount of capital will be required to compete with those players(Spritzer 2002).

Access to distribution channel measures barrier to entry due to the secure distribution channel created by the existing wine companies. This is especially true in the case of RMC since the company employs a three-tier of distribution system as described earlier. By doing so, RMC secures its distribution channel by having its own wineries as well as strengthen its relationship with wine suppliers, wholesalers and local retail businesses in the U.S. market (Thompson & Strickland 2003). Therefore, it is clear that local distribution channels for wine is already served by RMC accordingly. Silverman & Castaldi (1999) explains that this situation…