Robert Mondavi Company
Background of Robert Mondavi Company
California wine-maker Robert Mondavi has been one of the world's most innovative and high-quality producers of fine wine. The Mondavi family did significant effort on showing the Napa Valley region to the forefront of international winemaking. Robert Mondavi is an Italian migrant and started his winemaking business since 1960s. His intelligence and passion in wine lead him to be a legend in Californian premium wine industry and owned brands like Robert Mondavi Napa Valley, Robert Mondavi Coastal, Woodbridge, Vichon Mediterranean, Caliterra and Lucente. Since 1979, Mondavi has also produced, in joint partnership with the Baron Phillippe de Rothschild wine family, the ultra-premium Opus One label. The company sells about 10 million cases of wine per year, with Woodbridge as its top-selling label. In 2001, the company earned $481 million in revenues and distributed wine in more than 80 countries. The Robert Mondavi Corporation went public in 1993, although the Mondavi family controls 92 percent of voting stock.
Problem Statement How can the Robert Mondavi Company strengthen their competitive advantages and thrive in the long run in the global wine industry with many established and consolidated competitors.
External Analyses – Porter’s Five Forces
• Buyers The bargaining power of buyers in the wine industry is fairly high due to their concentrated control of sales at both wholesale and retail levels. Several large distributors control a substantial share of the market and generate most of the revenue for wine producers such as Mondavi. At the retail level, supermarkets and discount chains have become more concentrated, often accounting for 70% or more of off-premise sales in Europe. In fact, Mondavi’s largest wholesaler, Southern Wine and Spirits, accounted for 29% of the firm’s sales. And Costco, the largest wine retailer in US, also accounted for 10% of Mondavi’s total sales volume. The concentrated
California wine-maker Robert Mondavi has been one of the world's most innovative and high-quality producers of fine wine. The Mondavi family did significant effort on showing the Napa Valley region to the forefront of international winemaking. Robert Mondavi is an Italian migrant and started his winemaking business since 1960s. His intelligence and passion in wine lead him to be a legend in Californian premium wine industry and owned brands like Robert Mondavi Napa Valley, Robert Mondavi Coastal, Woodbridge, Vichon Mediterranean, Caliterra and Lucente. Since 1979, Mondavi has also produced, in joint partnership with the Baron Phillippe de Rothschild wine family, the ultra-premium Opus One label. The company sells about 10 million cases of wine per year, with Woodbridge as its top-selling label. In 2001, the company earned $481 million in revenues and distributed wine in more than 80 countries. The Robert Mondavi Corporation went public in 1993, although the Mondavi family controls 92 percent of voting stock.
Problem Statement How can the Robert Mondavi Company strengthen their competitive advantages and thrive in the long run in the global wine industry with many established and consolidated competitors.
External Analyses – Porter’s Five Forces
• Buyers The bargaining power of buyers in the wine industry is fairly high due to their concentrated control of sales at both wholesale and retail levels. Several large distributors control a substantial share of the market and generate most of the revenue for wine producers such as Mondavi. At the retail level, supermarkets and discount chains have become more concentrated, often accounting for 70% or more of off-premise sales in Europe. In fact, Mondavi’s largest wholesaler, Southern Wine and Spirits, accounted for 29% of the firm’s sales. And Costco, the largest wine retailer in US, also accounted for 10% of Mondavi’s total sales volume. The concentrated