Wine War
Wine War
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?
The French were the dominant competitors in an increasing global market because they stuck to their guns per say. They believed in an old fashioned wine that was make like many of their ancestors had made years prior. Many consumers preferred the taste and elegance of a bottle of pure wine from a mother country. To support their exports the French stuck by their plan of maintaining an old fashioned brand that was simplistic but full of quality. People who drank aged wine that came from France felt as if they were above normal society, in a class above the commoner. The report that French red wines helped with heart disease definitely did not hurt either. Where the French were vulnerable came in their marketing ability or lack thereof. The French did not have the marketing skills or the ability to collect consumer knowledge like the rest of the competition; this is where their old ways got them in trouble. The largest wine retailer TESCO wanted to work with more creative suppliers who could connect with the people.
2. How might the shift in currency exchange - in particular the high value of the Euro - in "Old World" mature markets impact the effect of selling into the US marketplace? What advice would you offer today to the French Minister of Agriculture in the face of this currency position and impact of "Old World" sources - such as Spain and Italy - who were selling at greatly reduced price points?
The higher value of the Euro could definitely cause for the exported wine to have a higher price in the United States. The “Old World” would face less profit if they were to adjust their price to the other markets or they would also face less profit if they did not adjust their costs because many people would be less
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?
The French were the dominant competitors in an increasing global market because they stuck to their guns per say. They believed in an old fashioned wine that was make like many of their ancestors had made years prior. Many consumers preferred the taste and elegance of a bottle of pure wine from a mother country. To support their exports the French stuck by their plan of maintaining an old fashioned brand that was simplistic but full of quality. People who drank aged wine that came from France felt as if they were above normal society, in a class above the commoner. The report that French red wines helped with heart disease definitely did not hurt either. Where the French were vulnerable came in their marketing ability or lack thereof. The French did not have the marketing skills or the ability to collect consumer knowledge like the rest of the competition; this is where their old ways got them in trouble. The largest wine retailer TESCO wanted to work with more creative suppliers who could connect with the people.
2. How might the shift in currency exchange - in particular the high value of the Euro - in "Old World" mature markets impact the effect of selling into the US marketplace? What advice would you offer today to the French Minister of Agriculture in the face of this currency position and impact of "Old World" sources - such as Spain and Italy - who were selling at greatly reduced price points?
The higher value of the Euro could definitely cause for the exported wine to have a higher price in the United States. The “Old World” would face less profit if they were to adjust their price to the other markets or they would also face less profit if they did not adjust their costs because many people would be less