1.1 Wine Industry - Porter Analysis
Porter analysis, a highly competitive industry under consolidation with very high market potential and growth. Faire un summary des points clefs: • A COMPLETER DETAILS: • 1.Bargaining power of customers = High 5/5 o No switching cost o Numerous players, numerous wine o At final customer level § Change in consumer habits and needs: • “Industry was becoming increasingly fashion-driven” Australian wine was becoming a “hot trend” o At distribution channel: § Increasing power of wine wholesalers and retailers (less fragmented, rationalization and consolidation). § Looking for set of key partners to source large quantity of wines and worldwide. in many countries, such as Sweden and most of Canada, state-run monopolies controlled retail distribution channels. These monopolies could buy direct from the wine producers and had strong bargaining power over distributor/wholesalers and the wine producers themselves. In Britain, the large supermarkets such as Tesco dominated retail sales, and large firms such as Wine Importer and Corney & Barrow dominated the import/wholesaler business. The supermarkets had the ability to buy directly from producers and increasingly preferred to deal with a smaller set of producers with broad product lines. • 2.Bargaining power of suppliers = 4/5 o One of the “core critical resources”: access to good grap fruit is key. Suppliers are sometimes switching quickly from one o Vintage could jeopardize for various reasons. • 3.Thread of substitutes = Medium 3/5 o In Australia: change in the consumer habits: moving from beer consumers to wine consumers; → increase in domestic consumption. o Alcopops “Ice sirmoff” like drinks arriving. • 4.Thread of new entrants = 2/5 o Complex industry, complex value chain. Very difficult to enter. o Under concentration / consolidation. Ex. In Australia 1996 § 10 largest companies = 84% of the grape crush § 4 controlled over 75% of...
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