As the wine become more famous because of healthy, wine does not just sell in the developed country, the developing country, such as China, also interest it. There are many companies from New World which is Australia, the United States, Chile and South Africa. Those companies want share $90 billion global wine market with traditional wine producer that is from France, Italy, Germany and Spain. The aim of case is to use the resources and the Institutions-based view of strategy to analysis Global wine wars between the New World producers and old world producers.
On the one hand, Resources-based view of strategy is a good way to analysis this case study which show the resources and capabilities that New World producers challenge Old World producers. There are some kinds of resources and capabilities can help people easy to understand this case analysis. Firstly, from the organizational resources and capabilities, opening New Markets to New World Producers Company can increase consumption in the postwar, especially in United States and Australia. And also the domestic demands for the wine industry in New World countries increase dramatically. On the other hand, the New World companies change the distribution. Those large companies control all value chain, giving bargaining power with increasingly concentrated retailers because most of final products come from here, in order to avoid some quality damages at every step. The large New World makers also use distribution advantages from their scale and scope to achieve market power. For example, in Australia, the largest five wine companies control 85% of market share. While the largest five French wine companies just share 8% of their market. Moreover, there are some costs advantages from low cost productions, such as avoiding handling stages, less inventory and catching intermediaries’ markup. Secondly, physical resources and capabilities, these New World countries have suitable and widely land can be...
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