Preserve the Luxury or Extend the Brand Case Analysis

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Case Study: Preserve the Luxury or Extend the Brand?

The case study Preserve the Luxury or Extend the Brand presents a fictional dilemma, based on a real company, faced by Chateau de Vallois, a prestigious and famous wine-producing estate in the Bordeaux region of France. De Vallois is a family owned and run business; part owners are Gaspard de Sauveterre - a 75-year old majority owner, and equal partial owners: Francois de Sauveterre – Gaspard’s son and the chateau’s CEO , and Claire de Valhubert – Garspard’s granddaughter. De Vallois had fallen into a slow decline under its previous owner, but Gaspard along with Jean-Paul Oudineaux, his estate manager, had restored the chateau and since then de Vallois had been steadily profitable since the 1980s. In 1855 de Vallois had been classified as a Premier Grand Cru Classe (First Growth) in a ranking of Bordeaux wine estates that allowed the estate to command top prices for its wines. The business focused on making and selling two wines, its Grand Vin du Chateau de Vallois and Puine. The first was considered the greatest of Bordeaux’s five grands crus classes, and sold about 150,000 bottles each year. Puine was made with the best remainder of grapes and averaged about 200,000 bottles per year. Approximately 70% of de Vallois wine is sold in advance to negociants under a centuries-old arrangement. For Chateau de Vallois, bottles of either of their wines ranged from 100 euros to 450 euros, or on average about 1000 dollars.

The problem or dilemma that de Vallois faces is whether or not they should continue their business as is, selling only high-scaled wines in limited amounts at extremely high prices, or if they should consider entering the “affordable luxury” market for young wine enthusiasts who focused their selection on less expensive wines. The idea to enter this new market was introduced by Claire to Gaspard. The case provides details as to how the chateau currently conducts business, and includes Claire’s...
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