Case Study: E. & J. Gallo Winery
Table of Content
Page • SWOT Analysis
(Question 1)_____________________________ 1-2
• Value Chain
(Question 2)_____________________________ 3
• Competitive Strategies
(Question 3)_____________________________ 4
(Question 4)_____________________________ 5
One of the strongest strength that E. & J Gallo Winery had is they Gallo Winery is an privately owned, family operated corporation and also they are practicing a low cost mass production strategy. The E. & J. Gallo Winery has an excellent marketing strategy to create awareness for one of their famous low-end white wine- Thunderbird. They were using radio broadcast as a part of their strategy to market the Thunderbird. As a result, they succeed on what they had planned as Thunderbird was on the tops of the sales chart in many inner city and low-income neighborhoods. Another strength own by E.& J Gallo Winery is that they have a strong brand name and image which is currently named as a quality label.
Besides this, Gallo Winery is practicing a vertical integration strategy. This meant they grew their own grapes, made their own wine, controlled their sales and marketing and owned and operated its wine distributorships. Gallo owned the wholesaler distributorship in about 10 geographic markets. Another big advantage that E. & J. Gallo possesses is their exclusive access to high grade grapes. They have planted more than 400 varieties in different grape-growing region in California for its ability to produce fine table wines. Their brand portfolio is among the strongest in the industry with more than 75 brands in its product lineup and was exporting wines to countries all over the world.
Gallo’s major competitive weakness is they are well known as a low-end maker of fortified wine labels with screw-top bottles. It’s because of an image that flowed partly by Thunderbird and Night Train brands. In short, most of it customer is from low income clientele. Although E. & J. Gallo already distills several lines of Brandy and one Gin label, there are opportunities to reach a broader segment of the alcoholic beverage market with hard liquor labels.
In product development, Gallo planted more than 400 varieties in experimental vineyards and test each variety in different grape growing region of California. The purpose is to produce fine and quality table wines. Furthermore Gallo expand their market to oversea for market expansion. Besides making wine, Gallo conducted a market research concerning buyer behavior and preferences. This is because Gallo Winery wants to improve their performance and create more product line up for its customer.
The primary threat to E. & J. Gallo is the economy. Economy is an external threat for Gallo, when economic downturn people will spend less moreover Americans were infrequent wine drinker according to the research by global standards. Political effects are the major threat to E. & J. Gallo Winery, it is because they need to keep a good reputation and relationship with the government for their export and import wine trading. Besides this, licensing law and tax rates charges for any wine contain more than 21 percents. Gallo Winery sales were decreasing in 1960s because of the “pop” wines where mostly bought by the youngster for party purposes.
The primary activities that Gallo is focusing is vertical integration strategy, where they participated from growing wine, to making wine, to market their product, operation wine distributorship, creative services, sales management and customer services. With marketing and branding strategies, the primary goal of the marketing department is to make it easy for Gallo customers to select and enjoy the right wines...
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