COMPETITIVE STRATEGY OF WINE INDUSTRY
COMPETITIVE STRATEGY OF WINE INDUSTRY
The wine may appear to be a simple drink with limited variation available, has turned into a multibillion dollar a year industry with enormous variation and an increasingly sophisticated consumer base. The variation available and changes in the age groups who are becoming the major markets for wine producers have created visible market trends that cannot be ignored. These trends also affect the global market.
Focusing on market scale and branding expertise, these opponents have capitalized on the globalization of the wine industry. Recently, more and more wine production is taking place in “New World” regions such as parts of Australia, Chile, and the United States, which have gained a strong comparative advantage in the wine industry.
Another problem is that some wine firm (usually French or Italian) are not capable to satisfy the demand of country such as China which has a huge population and even if the people who drink wine are not a lot the level of wine consumption is increasing and as a consequence the amount of export is growing as the graph below shows.
Source: All material ©2010 - 2012 Twisted Pine Productions.
Imports of bottled wine in China increased by 94% year-on-year (y-o-y) to US$1.27bn in 2011, according to data provided by the China Culture Association of Poetry and Wine (CCAPW). According to CCAPW, the total volume of imported wine climbed 76.5% y-o-y in 2010, while it increased by 80.9% y-oy in 2011. CCAPW also revealed that sales of domestically produced wine grew 36.3% y-o-y to CNY34.2bn (US$5.4bn) in 2011. Wine continues to be dominated by domestic brands, and although imports from major producing nations such as France have grown, they remain beyond reach in price terms for all but the most affluent of Chinese consumers. As a consequence of these barriers, winemakers from leading winemaking countries have entered the
The wine may appear to be a simple drink with limited variation available, has turned into a multibillion dollar a year industry with enormous variation and an increasingly sophisticated consumer base. The variation available and changes in the age groups who are becoming the major markets for wine producers have created visible market trends that cannot be ignored. These trends also affect the global market.
Focusing on market scale and branding expertise, these opponents have capitalized on the globalization of the wine industry. Recently, more and more wine production is taking place in “New World” regions such as parts of Australia, Chile, and the United States, which have gained a strong comparative advantage in the wine industry.
Another problem is that some wine firm (usually French or Italian) are not capable to satisfy the demand of country such as China which has a huge population and even if the people who drink wine are not a lot the level of wine consumption is increasing and as a consequence the amount of export is growing as the graph below shows.
Source: All material ©2010 - 2012 Twisted Pine Productions.
Imports of bottled wine in China increased by 94% year-on-year (y-o-y) to US$1.27bn in 2011, according to data provided by the China Culture Association of Poetry and Wine (CCAPW). According to CCAPW, the total volume of imported wine climbed 76.5% y-o-y in 2010, while it increased by 80.9% y-oy in 2011. CCAPW also revealed that sales of domestically produced wine grew 36.3% y-o-y to CNY34.2bn (US$5.4bn) in 2011. Wine continues to be dominated by domestic brands, and although imports from major producing nations such as France have grown, they remain beyond reach in price terms for all but the most affluent of Chinese consumers. As a consequence of these barriers, winemakers from leading winemaking countries have entered the