French Wine
Global Wine War 2009:
New World versus Old
Case 1
Synopsis:
Please provide a brief synopsis of the case.
Discussion Questions:
1. How did the French become the dominant competitors in the increasingly global wine industry for centuries? What sources of competitive advantage were they able to develop to support their exports? Where were they vulnerable?
By the Christian era, wine became part of the liturgical services and monasteries planted vines and builtwineries and the European nobility began planting vineyards as a symbol of prestige, competing inquality of wine they serve on their table, i.e. start of premium wine market. French wine producersbecame the dominant competitor as a result of four reasons. First, their geographic and climatic featuresplayed significant role. As France is in the middle of Europe culture with suitable climate and soilcondition for harvesting grape, had accrued first-mover advantage and established its place as thedominant competitor in the global wine industry. Second, they became the first high-quality winemarket and gained a lot experience. Especially, the negociants traded wine between France and othercountries and this worked as word-of-mouth effect, increasing the reputation and dominance of Frenchwine. Third, they used the latest innovations such as mass production of glass bottles, the use of cork stoppers and pasteurization. These innovations increased the stability and longevity of wine whichallowed the transportation of wine to distant places, and birth of global wine market. Lastly, thegovernment support made significant effect on the reputation and improvement of French wineindustry. Government controlled the wine production and quality, regulations like AOC and VDQS, setdetailed and quite rigid standards for vineyards and wine makers.The main vulnerable aspects of French wine industry were highly fragmented vineyard and wineproduction, increasing vineyard prices per acre, complex distribution and
New World versus Old
Case 1
Synopsis:
Please provide a brief synopsis of the case.
Discussion Questions:
1. How did the French become the dominant competitors in the increasingly global wine industry for centuries? What sources of competitive advantage were they able to develop to support their exports? Where were they vulnerable?
By the Christian era, wine became part of the liturgical services and monasteries planted vines and builtwineries and the European nobility began planting vineyards as a symbol of prestige, competing inquality of wine they serve on their table, i.e. start of premium wine market. French wine producersbecame the dominant competitor as a result of four reasons. First, their geographic and climatic featuresplayed significant role. As France is in the middle of Europe culture with suitable climate and soilcondition for harvesting grape, had accrued first-mover advantage and established its place as thedominant competitor in the global wine industry. Second, they became the first high-quality winemarket and gained a lot experience. Especially, the negociants traded wine between France and othercountries and this worked as word-of-mouth effect, increasing the reputation and dominance of Frenchwine. Third, they used the latest innovations such as mass production of glass bottles, the use of cork stoppers and pasteurization. These innovations increased the stability and longevity of wine whichallowed the transportation of wine to distant places, and birth of global wine market. Lastly, thegovernment support made significant effect on the reputation and improvement of French wineindustry. Government controlled the wine production and quality, regulations like AOC and VDQS, setdetailed and quite rigid standards for vineyards and wine makers.The main vulnerable aspects of French wine industry were highly fragmented vineyard and wineproduction, increasing vineyard prices per acre, complex distribution and