The management of Beringer Blass is working to build a strong global presence for their company. Beringer Blass has successfully opened offices in the three key world wine markets - North America, Asia Pacific, and United Kingdom/Europe – and has established distribution networks in the United States, Asia, Europe, and Australia. Beringer Blass’s global expansion is challenged, however, by its lack of products in its wine portfolio; specifically products marketed to Europe.
Beringer Blass is experiencing increased competition in the premium and ultra premium wine business due to the execution of acquisitions and partnerships by large conglomerates. Beringer Blass’s experience, brand recognition, and access to global distribution networks are some of its greatest strengths, and should be utilized in its global expansion.
Alternative solutions for Beringer Blass’s lack of products in its wine portfolio include acquiring an existing company, organically developing new brands, and forming a strategic alliance with an existing company. All of the alternatives suggested would succeed in increasing Beringer Blass’s European presence if successfully executed, but each comes with its own timeline and set of complexities that would have to present an option.
The final recommendation for Beringer Blass is to pursue a strategic alliance with Allied Domecq. Allied Domecq is one of Beringer Blass’s competitors and has access to, and production centers in, Argentina, France, New Zealand, Portugal, and Spain. Beringer Blass would gain access to a large wine portfolio and distribution networks, and Allied Domecq would gain access to Beringer Blass’s Australian networks, wine clubs business, and wine services.
The Challenge of Globalization
The management of Beringer Blass has been working since 2000, when the company was formed by the merger of Beringer Wine Estates and Foster’s Mildara Blass, to position their company as a strong global wine business. Beringer Blass’s global strategy is not unique; the majority of their competitors, both large and small, are attempting to operate on a global scale as well. However, there has not been a company that has been able to totally capture the global market.
A successful globalization strategy in the wine industry requires that a company maximize its wine portfolio by developing products that are desired and acceptable to the local markets in which it will compete. A company with global aspirations must also establish an infrastructure that can support such operations, and open foreign offices. Another requirement for a wine company that is expanding globally is gaining access to foreign distribution channels. The merger of Mildara Blass and Beringer Wine Estates gave Beringer Blass access to Foster’s Australian, European, and Asian distribution networks, and Beringer’s United States distribution network. Beringer Blass also has established offices in the three key world wine markets: North America, Asia Pacific, and United Kingdom/Europe. Beringer Blass is challenged in its global expansion, however, by a lack of products in its wine portfolio; specifically, products marketed to European countries. While Beringer Blass has identified the United Kingdom and Europe as a key wine market and an area of priority for their global expansion, they have not developed their product offerings to maximize their success in this region. Exhibit 6 from The Globalization of Beringer Blass Wine Estates shows that Beringer Blass has two wines that it markets to Europe; while exhibits 10, 13, 15 and 16 show that the United Kingdom and other European countries rank at the top of all nations in wine consumption and importation. The Situation
Beringer Blass is a premium wine company that does business in wine trade, clubs, and services. Globalization was a driving force behind the merger of Mildara Blass...