Wine War 2009

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Table of Content Preface 1 1. Introduction 3 2. Case analysis 3 In the beginning 3 Political influence in the Old World 3 A New World was born 4 Global Wine War 4 The battle of the US market 4 3. Theory & application to the case 5 Porter Outside-In Model 5 Porter Outside-In model & the Global Wine War 6 The Resource Based View Inside-Out Model 6 The Resource Based View Inside-Out Model & the Global Wine War 7 Innovations 7 Red Queen competition 7 4. Conclusion 8 References 9 2. Case analysis In the beginning The first niche market for premium wine was created by the European nobility in the middle ages. They started to compete based on the quality of wine. Until the late 18th century, the size European vineyards were…show more content…
Besides this, the size of companies also gave the New World an advantage. To respond better to consumer preferences, brand power became important in the global wine market. The New World companies owned 14 of the top 10 wine brands in 2007. Still, the Old World was not able to keep up with the competitive environment created by the New World. Due to old regulations in the Old World, they were not able to move to a more market driven policy. In the Old World, the declining demand caused a loss of share in export markets. Consequently, this caused a structural wine surplus. The wine surplus in the Old World caused the global wine market to lower their prices. Here, the challenge for the New World was to create a better image and move out of the competitive low price market. The battle of the US market The US market was called the most attractive market in the world. However, this market was hard to reach because of the distance, regulations and the complex three-tier distribution system through the different states. When regulations changed, importing was made more easier. The attractiveness of the US market was due to Generation Y who embraced wine much more than Generation X. These consumers were price-sensitive, internet savvy, and well educated about their purchases. Furthermore, these consumers chose more for imported wine. The result of this attractiveness is that the US became a huge player in the

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