Revolution in Global Wine Market: Economic Globalization

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  • Topic: Wine, Terroir, Chardonnay
  • Pages : 5 (1526 words )
  • Download(s) : 98
  • Published : December 31, 2012
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With the development of economic globalization, the global wine market was experiencing a revolution and the competition between the Old World and New World was changing extensively. Many corporations of wine producers form the Old World, for example, France and Italy, etc. found that themselves constrained by restrictive industry regulations, embedded practices and traditions, and complex legislation, and these restrictions of the Old World wine produces provided many opportunities for these wine corporations from Australia to challenge for the leadership with the more established traditional wine producers by bringing innovations. This case study aims to use both the strategy from resources-based view and the strategy from institutions-based view to analyze how the changing industry environment give the producers such as Australia from New World opportunities, while bring the threats to the traditional wine producers, such as Italy and France. The analysis also includes that New World producers have identified some of them take the opportunity to take advantage of these changes and compete in the global wine industry, and to consider the arranged and officious institutional condition of the comparative wealth of the New World producers and Old World producers, in particular the resources and capabilities of their individual value.

Resources-based view of strategy
Resources-based view points out that the specific resources and capabilities are a source of competitive advantage. Resource-based framework for enterprise marketing capabilities includes: marketing culture, marketing strategy and marketing operation, which are an important means for companies to achieve competitive advantage in the interaction process with the environment. Daniel’s research shows that the growth and efficiency of companies have a positive relationship with the raw materials, equipment, operational processes and innovative strategies possessed by them.

The New World’s try to contend with exports from the Old World countries were ridiculed for so many years, but in the 1980s and 1990s the corporations from New World started to win international reputation, and occupied the global market share. The dramatic change owes to the opportunities provided by the changing industry conditions, which will be shown as follows: firstly, the opening new markets give the New World the chance to enter into the global wine market. While the external conditions such as climate and soil help grape growing to flourish in the new environment, the annual wine consumption in the local market vary widely, because this new industry is not so fast to be accept by the new world local people. In Australia, the hot weather and the British immigrants dominated the preference of alcoholic beverages with beer, and wine was consumed mostly by the immigrants from the old world consumption. After the war, however, peoples in the United States and Australia had a dramatically increasing demand for wine. It is the booming demand for wine in the quality and quantity of domestic market, so the young wine industry can be established in the New World countries. Secondly, the challenging production norms make sure the New World producers have the elementary capital to compete with the Old World producers. With the post war economic booming, the wine producers from New World developed on the conditions of a much changed industry environment than their European craft brothers. The wide suitable land allowed the growth in the wider vineyards. Experiment also extends to wine making, where once again the New World are more willing to break the limitations of traditional industries. Meanwhile, the new industry is constrained by neither small size nor tradition, what makes sure that the producers from New World started to do experiments with new technology in both wine making and grape growing. Thirdly, producers from New World reinvented the Marketing Model, which was...
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