BUSINESS CASE: GLOBAL WINE WAR 2009:
French became the dominant competitors in the increasingly global wine industry for centuries, because they were able to develop sources of competitive advantage.
By the Christian era, wine became part of the liturgical services and monasteries planted vines and built wineries and the European nobility began planting vineyards as a symbol of prestige, competing in quality of wine they serve on their table = start of premium wine market.
French wine producers became the dominant competitors as a result of four reasons:
-First because of their geographic and climatic features played a significant role. As France is in the middle of Europe, has a suitable climate and soil condition for harvesting grape, had enabled them with a significant advantage and established its place as the dominant competitor in the global wine industry.
-Second, they became the first high quality market and gained a lot of experience. Because the negotiators traded wine between France and other countries they caused a word-of-mouth effect increasing the dominance of French wine.
-Third, they used the latest innovations such as mass production of glass bottles, use of cork stoppers and pasteurization. These innovations increased the stability and longevity of wine which allowed the transportation of wine to distant places, and birth of global wine market.
-Last, the government support made significant effect on the reputation and improvement of French wine industry. Government controlled the wine production and quality. Regulations such as AOC set detailed and quite rigid standards for vineyards and wine makers.
The main vulnerable aspects of French wine industry were highly fragmented vineyard and wine production, increasing vineyard prices per acre, complex distribution and sales system. Also made them vulnerable, the long value chain, the risk of bad weather and disease, and poor roads and complex toll and... [continues]
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