BACKGROUND OF THE CASE STUDY
ANALYSIS & IMPLICATIONS OF PORTER'S FIVE
The Potential Entry of New Competitors
Competitive Pressures from Substitutes Products
Bargaining Power of Buyers
Bargaining Power of Suppliers
The Rivalry among Competing Sellers
ANALYSIS OF THE STRATEGIC GROUP MAPPING
KEY SUCCESS FACTORS OF THE WINE INDUSTRY
World famous growing areas
Larger growing market for premium wines
Favorable demographic and macro trends
Quality and affordable prices
Different wine segments
Positive cash flows
Expanding to new geographic areas
Exploring new channels
Openings to extend quality and image to niche market
Further mix channels of export strategies
LIST OF REFERENCES
This report provides thorough analysis of the Robert Mondavi Corporation (RMC) in order to give a best solution to Michael Mondavi, the CEO of the company in terms of the problem face by the company.
It begins by examining the internal and external forces that greatly affect RMC by applying Porter's five forces of competitive pressures to investigate the status of competition of wine industry in U.S. as well as their implications.
Analysis of the strategic group mapping is important in order to give a clear position of RMC's competitor in the market follows by each company's characteristic.
Next, it is essential to analyze the key success factors of U.S. wine industry that contribute RMC in considering its future competitive strategies and changes that should be taken by the company accordingly
Finally, recommendations are provided for RMC for its future expansion's strategies.
BACKGROUND TO THE CASE STUDY
RMC is a leading producer and marketer of table wines, located in Oakville, California. RMC markets wines worldwide under the following labels: Robert Mondavi Napa Valley, Robert Mondavi Coastal, Woodbridge, Vichon Mediterranean, La Famiglia di Robert Mondavi, Byron, Opus One, Luce and Caliterra. RMC employs a standard three-tier distribution system where the company sells to wholesalers who in turn sell to retailers who sell to the public. The company finds its niche in the "premium" and "ultra premium" segments of the table wine market (Burns et al., 2001).
In January 1999, Michael Mondavi, the CEO of the RMC and son of its founder, Robert Mondavi, announced the reorganization of the company and the layoff of 4% of the workforce. RMC had experienced a shortfall in supplying its Woodbridge Chardonnay brand. Unhappy distributors had begun substituting competing Chardonnay brands on retailer's shelves. Yet, some distributors remained reluctant to carry the brand even though Woodbridge production levels returned to normal and further reducing company sales (Thompson & Strickland 2003).
During this period, the senior management was completing the process of reconfiguring RMC's future strategies. However, there were two different views had aroused: (i) one group argued for a return to the original vision, complaining that RMC had been so busy focusing on launching new brands and pursuing international ventures that it had neglected its core domestic brands, which made up 90% of revenues, and (ii) another group claimed for continued diversification through its global partnerships in Chile and Italy and one domestic brand. Michael Mondavi was caught between the two groups (Silverman et al., 2001).
ANALYSIS OF THE FIVE COMPETITIVE PRESSURES
The graph below demonstrates the state of competition of wine industry in the U.S. Porter's five-force model is used to...
(Source: Adapted from Silverman 1999, ‘Competition in the Global Wine Industry ', Wines & Vines, July 2000).
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