Robert Mondavi and the Wine Industry Essay

1994 Words 8 Pages
Robert Mondavi and the Wine Industry

1. The industry structure in the Old World is significantly different than the New World. First, the Old World has a very low concentration ratio, while the diversity of competitors is high. Along with other factors the Old Worlds industry rivalry is very high. In contrast the industry rivalry is relatively low because of the extremely high concentration ratio and the low diversity of competitors. The New World is made up of large publicly held firms in comparison to the small private owned vineyards in the Old World that historically have produced for their own consumption. Another difference is between the suppliers in both industries. The suppliers in the Old World are one in the same with the
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However, buyers in the Old World have equally high power as those in the New World because of the extensive amount of different producers in the Old World. All of these comparable elements affect the industry attractiveness in different ways. However, I feel that when comparing both worlds, the industry attractiveness is almost the same. The industry attractiveness for wine production is moderate. The wine industry has been affected by the various governments throughout its history. They governments have regulated bottling and packaging as well as the distribution systems. The industry has also shifted with the amount of education offered to consumers about wine. This has led to some firms just reaping the benefits of those who are promoting general industry awareness. A main reason this industry would be attractive is because consumers must first try the product in order to determine if they like it or not. Consumers also tend to be brand loyal if they are satisfied with a certain type of wine and will go to great measures in order to repurchase. There are also many consumers who are uneducated about wine and mainly purchase on price. Price in the wine industry can be very effective in relaying perceived quality. The wine industry is attractive also if one firm owns their own vineyard because the life of the vineyard is extremely long and will be relatively constant for a producer.
2. Mondavi is in a great position currently and has large growth
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