Australian Wine Industry

Topics: Wine, Chardonnay, Australia Pages: 17 (4516 words) Published: August 25, 2009
Executive Summary

Table of Content

Executive Summary2
Table of Content2
1.0 Environmental analysis2
1.1 Macro - environment factors2
1.1.1 Demography2
1.1.2 Economic conditions2
1.1.3 Social and cultural trends2
1.1.4 Political and legal forces2
1.1.5 Technology2
1.2 Key driving forces affecting the industry2
1.2.1 Natural advantages2
1.2.2 Human advantages2
1.2.3 Technology advantage2
2.0 Micro-economics environmental analysis2
2.1 Porter's Five Forces Analysis2
2.1.1 The intensity of rivalry among competing firms - high2 2.1.2 The threat of new entrants - HIGH2
2.1.4 The bargaining power of suppliers - low2
2.1.5 The bargaining power of customers - high2
2.2 Opportunities & threat2
2.2.1 opportunities2
2.2.2 Threats2
3.0 Key success factors in the industry2
3.1 Physical supply factors2
3.2 Human factors2
3.3 Market factors2
3.4 Competitive strength assessment in relation to competitors2 3.5 Particular internal competencies2
3.5.1 Vineyards2
3.5.2 Processing Capacity2
3.5.3 Water2
3.5.4 Skills2
3.5.5 Funding2
3.5.6 Risk assessment2
3.5.7 Strength measure2


1.0 Environmental analysis
1.1 Macro - environment factors
1.1.1 Demography

It is anticipated that there will be a dramatic increase in population with a shift to Asian and Pacific Rim growth. This means a number of opportunities exist for wine industry with the increasing affluence of Asian consumers and the maturation of income and time rich 1950s Baby Boomers generation. In addition, this trend is enforced by a global economy with increasing free trade, international business collaboration, strategic alliances and a global currency. Geographically Australia is well placed to capitalise on the Asian boom and wine meets the Asian demand for Western style products.

As for the domestic market, despite the fact that there has been minimal focus on developing new wine consumers during the last ten years, domestic sales have continued to expand in value rather than volume. Population growth in prime wine consuming age groups, the emerging generation who has grown up with wine consumption, the changing demographic profile of the Australian population, growth in the dining out market, increasing popularity of the Mediterranean diet, tourism growth and the quest for more individualised beverage experiences are significant opportunities exist for increasing domestic wine consumption.

1.1.2 Economic conditions

Although a decline in the value of the Australian dollar inhibits profitability and the ability of Australian winemakers to hit key price points, it helps to stimulate the other countries to import Australian wine because of lower price Increase in demand for wine may be attributed to the following economic factors: changing living standard, changes in the relative price of wine to other goods and services, the introduction of fringe benefits tax and the modification of sales tax to wine and other beverages.

1.1.3 Social and cultural trends

Although nowadays, there is a strong trend away from alcohol beverages and alcohol consumption, quality table wine still be a favourite one for consumers. The image of a man drinking wine, bottles to bottles until get drunk is no longer seen. People do not drink wine in quantity but prefer quality alcohol. Sales in cask wine decline whereas profits in bottled semi-premium or premium wine increase. The reason for this can be explained by: - Quality table wine has its own image and status, engenders high consumer involvement, provides variety, and has a range of flavour complexity. It is therefore a stronger alternative to other non-alcoholic beverages (soft drinks, bottled water, fruit drinks and coffee) than is beer or spirits. - Quality wine has acknowledged health attributes. Recent research showed its effects in reducing cardio vascular disease. - People look for more spiritual meaning in their lives. They favour healthy products, healthy...
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