Robert Mondavi and the Wine Industry Essay Sample

makers, and the New World, which encompasses Australian, South African, and South American wine makers. This competition from emerging markets presents a significant obstacle for traditional wine-makers. A prime illustration of this can be seen in the rise of imports of Australian wines to the U.S.

The wine industry has witnessed a growth rate of about 30% per year since 1995, thanks to large vineyards, advanced machinery, and new technologies that allow for the production of high-quality wines at affordable prices. In this analysis, we will focus on the wine sector and perform a SWOT analysis specifically for Robert Mondavi Winery to identify potential opportunities and future strategies for this winemaker.

Branch Analysis

From 1988 to 2002, Australian wine makers experienced a remarkable increase in their global market share from 2% to an impressive 22%. How did they achieve such success? What strategies did they use? And what weaknesses did they discover in traditional wine making practices? The following aspects pose challenges for old world wine makers but provide opportunities for those in the new world: identification of origin, which is a traditionally significant quality indicator in Europe (e.g., Chianti and Burgundy).

Champagne...

Bringing up jobs due to limited country, wine makers in the new universe are heavily dependent on weather and seasons, as well as restricted by the size of their vineyards. However, they have chosen to diverge from this model by engaging in "vineyard diversification," enabling them to select the finest grapes from various locations and achieve maximum results.

2. Quality Categorizations - Another controversial aspect of the new world recognized in the field of quality categorization. There are numerous quality Marks in Europe with each country having its

own or even more than one. This alone creates confusion for consumers. Moreover, these quality categorizations impose strict limits on the ingredients and the wine-making process.

As a result, tremendous costs are produced and inventions are avoided. The new universe adapted their schemes and refrained from categorizing quality as Markss. 3. In addition, there was hardly any selling in the vino sector. The traditional wine makers believed that it is unnecessary and unethical to "advertise" vino, as they thought a good vino sells itself. However, the wine makers of the new universe had a different opinion and started using professional selling.

SWOT Analysis Of Mondaviswot

Problem Analysis - The Competitors

The Australian competitors are the biggest challenge in the wine industry. Their market share growth has caused numerous issues for vintners in the US and Europe, especially those from traditional wine regions. The key advantages of the Australian competitors lie in their unwavering wine quality and affordability.

Australian vintners have large countries that ensure the growth of their economies on a large scale. Additionally, the Australian distribution system is more well-organized compared to that of the United States. In Australia, there are only a few enormous vintners that surpass the size of Mondavi. Another benefit is that they have introduced new brands and quality standards, which have been well-received by customers. The Europeans, who are renowned for their excellent wines, also pose as tough competitors.

Moreover, European consumers do not truly embrace wines produced by

American vintners, making it extremely challenging to export wine to Europe, especially countries such as Italy or France. Mondavi, despite having numerous brands under its portfolio, encounters difficulties with distribution.

All trade names of Mondavi and the Joint Ventures of Mondavi are individually distributed, which is both complicated and intransparent. This distribution method is also noneconomical. Moreover, the use of expensive oak barrels for production results in high production costs. These oak barrels are not reused, leading to the production of low-priced wine.

Possible Solutions

One possible solution is for Mondavi to produce a lower-priced wine in order to reduce production costs. This can be achieved by reusing the oak barrels for a second time. However, this approach may result in decreased competitiveness against other winemakers who also produce inexpensive wine. Another potential problem is that Mondavi's ROI and image may decline. To address this issue, one solution could be to not associate the Mondavi name with the inexpensive wine.

Solution 2Mondavi can offer and sell the same wine with the same quality as it currently does, but at a lower price. The advantage of this approach is that Mondavi would likely achieve a high return on investment and potentially sell more wine for a certain period of time. However, in the long run, this may not be the best strategy because there are many other producers who can manufacture wine more economically and offer better prices than Mondavi.Solution 3Mondavi has the option to reduce its range of products and focus more on marketing its brands. It should utilize the patriotism of the US people, encouraging them to prefer drinking US wine

over wine from Australia.

Furthermore, Mondavi should increase its exports to reduce its dependence on the US market.

Our Strategy

We believe that Mondavi should first simplify and streamline its distribution network to decrease distribution costs. Additionally, Mondavi should create a brand for wines priced at approximately $5 that does not carry the name Mondavi. This will allow them to compete with the prices of Australian low-priced wines and reduce production costs. Mondavi also needs to focus on more intensive marketing efforts related to the company's image, especially Robert Mondavi's image as a well-known figure among wine drinkers. We do not recommend that Mondavi change its philosophy and enter the New World of winemaking - instead, Mondavi should demonstrate and promote that Old World wine is superior and more traditional.