Strategic Analysis of Robert Mondavi Inc.

Topics: Wine, California wine, Robert Mondavi Pages: 14 (2797 words) Published: April 5, 2006
Robert Mondavi Corp. Analysis
Company founded in 1966 by Robert Mondavi in Napa Valley, California Company vision to make California a recognized wine producing region alongside great winemaking regions of Europe Major focus on technology and wine growing techniques Production of premium to super ultra premium wines

Mondavi focuses on personal sales, wine competitions, and lavish parties to promote the wines rather than conventional advertising Mondavi has a portfolio of premium to super ultra premium wines to fill various price points and niches in domestic wine market 1981 Opus One joint venture with Baron Philippe de Rothschild Through 1980's and 1990's, Mondavi acquires many wineries and vineyards throughout California Mondavi develops national following

Phylloxera (vine killing insects) begin to infiltrate California vineyards 1993, Mondavi, in need of capital due to extensive acquisition expenditures in previous decade plus the replanting costs, issues public shares In the mid-1990's, Mondavi begins 3 joint ventures with a Chilean, an Italian, and French firms Wine production in California accounts for more than 70% of wine consumed in America Wines in America are sold through a three-tier distribution 100's of wineries emerge in California,

90% of Mondavi's revenues generated domestically
II. Case Profile

Problem/Issues in Case

Managing multiple brands in the global markets
Maintaining domestic market share while foreign competitors enter U.S Accurately forecasting demand and acquiring necessary wine grapes

Supporting Statements

By 1998 Mondavi has about 4% domestic market share (fifth largest) U.S. wine exports make up only 4% in the international market places despite being the fourth largest producer of wine in the world {exhibit 1} By 1999, Mondavi is managing 13 brands (6 international) In 1999, Mondavi experienced major shortfalls in supply resulting in reduced sales, stock price drops 60% January 1999, Mondavi lays off 4% of workforce

Management is divided on future strategy:
oFocus on Domestic Brands, 90% of revenues
oContinue to Diversify, Global partnerships and acquisitions

III. Situational Analysis
External Environmental Analysis
General Environment

Globalization: *** By 1999, 20% of wine consumed in America is imported while the U.S. share of world export wine is a low 4% - The global markets provide tremendous potential {exhibit 2}

Technological: ** Mondavi's success in creating world class wines is often attributed to their advanced technology

Sociocultural:** In general, the wine consumer's preferences don't change quickly, but firms must look for opportunities to lead when the changes occur, additionally firms must adapt to foreign market preferences

Political/Legal:* Restrictions in some countries have made it difficult for U.S. wine firms to enter markets- Domestically the wholesale distributors have lobby power and control of the regulations overseeing the industry resulting in restrictive distribution

Industry Environment

Rivalry Among Competitors:*** Rivalry is intense and expected to remain so in at all product levels- 10 large domestic producers account for 70% U.S. volume {exhibit 3}

Threat of Substitute Products:***The beverage industry in the U.S. is extremely competitive because of aggressive advertising and marketing campaigns that are constantly bringing new beverages (alcoholic substitutes for wine) to market- 52% of wine is purchased in supermarkets where consumers are faced with a myriad of beverage alternatives

Power of Suppliers: * Most large firms do not produce enough grapes to meet demand so outsourcing is common and when supply is short (small crops) the...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Robert Mondavi and the Wine industry Essay
  • Robert Mondavi
  • Essay on Robert Mondavi
  • Robert Mondavi Case Study Essay
  • SWOT Analysis of Robert Mondavi case Research Paper
  • Strategic Analysis of Microsoft Inc. Essay
  • Strategic Analysis of Apple Inc Essay
  • Robert Mondavi Case Study Essay

Become a StudyMode Member

Sign Up - It's Free