Korbel Wines Case Analysis

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  • Topic: Winemaking, Wine, Sparkling wine
  • Pages : 11 (3915 words )
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  • Published : August 11, 2012
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Case Study – Korbel Wines
Introduction Analysis:

Korbel Champagne Cellars had started back in the mind 1800’s by three brothers that had emigrated from Czechoslovakia. Initially the business started as a materials company for the building industry.

However, the brothers had to divest their materials company once they discovered that the sector was slowing down. Eager to take advantage of the Russian River Valley’s growing opportunities they soon discovered that they could grow Pinot Noir grapes and experimented with wine making. Due to this success in 1882 much of the ranches’ land was transformed from a normal farm into a vineyard.

Surviving Prohibition, the champagne maker’s ownership was transferred from family hands to Adolf Heck under conditions that the buyer would carry on the tradition of making champagne from méthode champenoise.

When Adolf retired from the business, Korbel’s reigns were handed off to his son Gary. Unlike most bosses this owner of the company grew up with the product that was produced learning the ins and outs of the business from his father. With ingenuity and dedication the Korbel name is internationally recognized, has become the 9th largest wine maker in the US, and also hosts a variety of wine properties such as Kenwood Vineyards and Valley of the Moon Winery.

SWOT Analysis:

Strengths - 1) Gary has grown up in the wine making process (from the grapes to the selling of wine) - This can be seen is a strength to the company because hits current owner has had experience in making the product from start to finish. Because of this experience Gary is able to make sound decisions as to how his wine is going to be made and what needs to be done to make a quality product.

2) Korbel sells more than 1.3 million cases a year
- This is a strength for Korbel because the sales show how popular and well know this brand is to the public.

3) $150 million in revenues
- This financial information points to how well Korbel is doing and possibly what it can spend for improvements.

5) Cheap price (about $10 - $15 per bottle)
- The pricing point for these wines/champagnes means that the company is shooting for a more mass production type of manufacturing model. Instead of high profits per bottle, the company is shooting for selling more products at lower margins.

Weaknesses - 1) Still using an unsupported Pansophic ERP system to document data - This is one of the internal IT weaknesses that the company is experiencing in the case study. Not only is there no one out there to help this company if this software does go down but it causes significant waste in time an effort to gather data needed. As the saying goes “Time is money”.

2) “Cognos BI is dumb as a brick” (inconsistent inventory levels because of system) - This factor is an internal risk because it is an inefficient information system that cannot tally the correct amount of bottles available in inventory. This can lead to loss sales if the inventory is not correct (Korbel could be selling bottles the company does not have or it might be not selling enough bottles, both of which will lead to losses).

3) Revamp of Pansophic ERP is a mess and required a consulting company to help fix it - This factor is an internal weakness because the new system that was supposed to have replaced Pansophic is completely out of budget and well past the initial due date. The case also states that this new system is testing and rolling out too many modules causing a backlog.

4) Current datacenter is a converted office
- This factor can be considered a weakness for it seems that despite how large Korbel’s organization is. This information points out that a mere converted office is used to house its current data center. This hints that the datacenter itself is not living up to expectations and could be the cause of all of...
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