Global Wine War

2166 WordsJul 1, 20139 Pages
CASE: GLOBAL WINE WARS (A) Question 1 During the last decades, some remarkable evolutions of the global wine industry have dramatically influenced the base of the industry structure, with technological update, innovation, and new players coming in, the wine market as well as the competition within this market have come to a new dimension. In the following, we will analyze briefly the main points of this evolution and group those points into several categories. Change on the demand side ‐ Demand went down in the traditional market. There is a huge geographic shift in demand from the traditional highest-consumption countries like France, Germany, and Italy to the new markets in countries like the USA and Australia. In addition, there is…show more content…
This also seems to be true for the different countries. Therefore, we conclude that the most relevant variable for segmentation is the price. Based upon Exhibit 4, we conduct the following five price segments: Price
Segment
 Low
 Medium
 Premium
 Super‐Premium
 Luxury
 Price
Range
 Lower
than
$
5
 Between
$
5
and
$
10
 Between
$
10
and
$
20
 Between
$
20
and
$
50
 More
than
$
50
 
 The different segments have been and still are greatly impacted by the change in demand patterns. Before the 1960s wines in the lower and medium price range were greatly consumed. Due to different drinking preferences, concerns of health issues and stricter drunk-driving penalties demand for wine declined. The decrease in wine consumption was a general one but affected especially the lower price segments. This is contrasted by the growing demand for higher-quality wines. This segment is said to have the greatest potential for growth at present state. The price segments are also influenced by better means of production and new technology methods. These allow for higher outputs and a more stable production of high-quality wines in the high price range. Also, consumers decide on the highest perceived quality-to-value-ration today. This is why modern production and technology are very important. They allow the producers to lower production costs and thereby to respond with pricing competition the customer’s needs. Question 3 For creating strategic

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