Southern Peninsula Wines
1. Organisation overview
a. The organisations mission or vision
b. Strategic goals of the organisation
c. Capabilities of the organisation
d. Product/s of the organisation under consideration for entry into an international market
2. Global Business Environment
a. A brief overview of the current global business environment.
a-1. Figure 1&2 wine consumption a-2. Top 10 wine consumers a-3. Changing in total wine consumption
b. Discuss any market trends or developments that are relevant or may impact on the organisation
1-a. The organisations mission or vision …show more content…
Over that period, per capita wine consumption fell 3% per annum, while total world wine consumption fell 1.4% per annum from 29.4 million tonnes to 22.0 million tonnes.
The decline in global wine consumption from 1980 to 2000 is the consequence of global population growth being biased towards non-wine-consuming regions (i.e. Africa, Middle East and Asia) and a changing alcohol consumption pattern in traditional wine consuming regions.
For example, total alcohol consumption in Europe has declined over the past few decades while beer and spirits have increased market penetration.
a-1. Wine consumption
a-2. Top 10 wine consumers
Unsurprisingly, the Europeans dominate global wine consumption. The French consumed nearly 54L/person in 2006, followed by the Italian’s with 47.2L/person/year. In total, the French consume 3.3 billion litres of wine per year, or 14% of the world total, followed by Italy with 2.7 billion litres.
a-3. Changing of the guard
Despite dominating world league-tables, wine consumption in the traditional old-world countries is falling, both in total and per capita terms. For example, in the 11 years to 2006, French wine consumption fell by over 9L/person/year, and total French wine consumption fell nearly 400 million litres. Italian wine consumption fell 461 million litres over the period.
There is somewhat of a changing of the guard in the world of wine. New-world consumers
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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.
5. Wine drinking predominates in the South of Europe. In the north of Europe beyond the reach of roman rule. Today, the worlds leading producers of wine are France, Italy, and Spain. Beer is drank in Germany, Austria, Belgium, Denmark, the Czech Republic, Britain, and Ireland.(pg.89)
The structure of the wine industry is quite different around the world. The barrier to entry is relatively higher in the New World than in the Old World. Referring to the market data on the level of concentration in 1998, people can see a few players dominate the markets in Australia and the U.S. while the level of concentration is quite low in Europe. Therefore, the rivalry in Old World is intense there.
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.
Wine production involves two parts of economic activity – viticulture and wine making in the winery. In the global context, wine production is dynamic due to the influence of globalization, technological advancements and extensive research. These have essentially influenced the nature, spatial patterns and the ecological dimensions of the wine industry.
The buyer’s power within the wine industry varies between different places in the world. There are for example strategic differences between Europe and the “New World”. The “New World” includes countries like the US, Australia, Chile and South Africa. In Europe there is a big competition
The macro environment surrounding alcohol sales and consumption has generally been stable and has experienced incremental growth throughout history. In the United States, the number of per capita consumption of alcohol has declined slightly, but has consistently remained around 2.5 gallons, per person, per year. The lower class, specifically females in the lower class are responsible for a majority of alcohol consumption in the United States. The highest per capita consumption worldwide is as follows: Luxembourg, Ireland, France, Hungary, and Denmark, (the US ranks 22nd.) According to one article, “the beverage alcohol industry contributed over $21 billion directly to state and local revenues during 2010. Of that amount, distilled spirits accounted for over $8.8 billion or 41% of this direct revenue” (“Distillery Spirits”).
Table Wines in the United States must contain less than 14% + 1.5% ABV (12.5 – 15.5% ABV) but when we look at European wines their ABV is 8.5 – 14.0%. In places like Italy and France wine is served throughout the day, many times at each meal. Imagine if the wines were at 17% ABV there would be a tremendous effect on the work
This industry has seen very limited growth since 1986. Based on Exhibit 4 (C-271, the total wine consumption in the US) and Exhibit 5 (C-271, per capita wine consumption in the US) the wine industry is in the maturity stage. It could
In the most recent years, domestic sales of wine has declined constantly. The wine consumption is becoming more occasional. This is partially due to an aggressive anti-alcohol campaign and driving restrictions set by the local government, but also facilitated by a lack of marketing strategy: the wine market is loosing touch with the youth (the average age of wine drinker is gone up from 35 to 55) and young people are getting more keen to beer or alcohol pops.
Nowadays, in the “Old World” countries of Europe, where the bulk of the volume is still produced, this is of great concern. However, consumers, especially younger drinkers, prefer the high quality wine from famous brands which are imported into Europe by the “New World” player, and the growth rate is at average10% per
consumption of wine in the country and the growing sector technologically as well are an