The wine industry includes red wine and white wine. Vines were first planted in the Middle East before 4,000 BC. Through vine plantation and wine production, wine trade emerged in Greece, Crete, Phoenicia and Egypt and spread widely in Mediterranean. Wine industry rapidly developed with the help of the Catholic churches in The Middle Ages. In seventeenth century, new techniques and innovations were turned up to improve the wine to satisfy the globalization and colonization. Now the geographic scope of competition ranges from Old World, which are European countries, to the New World, which are North America, South America and South Africa. In this industry, buyers and suppliers are from all over the world and the substitute includes water, coffee and tea. As the reading material emphasized that competition should include five forces, which are profits, customers, suppliers, potential entrants and substitute products. The basis of competitive advantage is the quality of wine. And it has become a global industry. French firms dominated this industry in the past for several reasons: * In the time of Roman Empire, the viticulture and wine production were introduced to Provence and moved further to the inland. * After The Middle Ages, the wine trade in Bordeaux region became prosperous because of the large shipments of wine exported to Great Britain. * In the 1600s, French producer applied new techniques to plant vine and he mastered art of maturing and improving wine. Also, the replacement of glass wine bottles sealed with cork made wine taste much better. The reasons that French dominance now being threatened by new world producers: To the France itself:
* The epidemic of phylloxera in the 1860s, which was cured in the 1870s. * Overproduction and fraud among the French producers.
* Regulations limited wine from regions and grape varieties. * The decreased demand of daily meals.
* The inefficiency in workplace...