Competition in the Global Wine Industry Essay Example For Students

Competition in the Global Wine Industry: Essay Competition in the Global Wine Industry:A U.S. PerspectiveMurray SilvermanProfessor of ManagementCollege of BusinessSan Francisco State University1600 Holloway AvenueSan Francisco, CA 94132Phone: 415-338-7489Fax: 415-338-0501Email: emailprotectedRichard CastaldiProfessor of ManagementCollege of BusinessSan Francisco State UniversityPhone: 415-338-2829Fax: 415-338-0501Email: emailprotectedSally BaackAssistant Professor of ManagementSan Francisco State UniversityCollege of BusinessPhone: 415-338-6421Email: emailprotectedGreg Sorlien, MBASan Francisco State UniversityCollege of BusinessCompetition in the Global Wine Industry:A U.S. PerspectiveThe total volume of the global wine market in 1998 was measured at 6.8 billion gallons, with 25% of the total volume accounting for wine that was purchased outside the country from which the wine was produced (California Wine Export Program, 2000). This represents an increase over the 1991-95 period, during which the export segment of the market av eraged approximately 17% by volume. The increasing trend for the export market since 1995 is due primarily to a change in the strategic priority that wine producing countries are placing on exporting as a method for growth. Historically, the market for wine was primarily one of local production and consumption. That paradigm has changed in the last few decades as a few of the more established wine drinking countries have seen their per capita consumption stagnate or decline (Table 3). At the same time, several wine producing countries around the world have begun to make an impact on the export market in an attempt to expand their industries beyond their limited local markets. The result of this shift in market focus for some of the older wine producing countries plus the rise of new wine producing countries around the world has caused an increase in the competitive nature of the global wine market. Currently the U.S. is the fourth largest producer of wine in the world (Table 1) yet only accounts for approximately 4.2% of the total wine export market based on volume (Table 2). One reason for this disparity can be attributed to the low level of strategic importance placed on exporting by most U.S. wineries. In the past, a very common export strategy for U.S. companies was to export only the excess capacity that was on hand due to over production (Monterey County Herald, 1998), thus there was little focus on establishing a presence in the global market place. Foreign governments could also restrict U.S. wineries ability to operate by using anti-competitive actions such as implementing high tariffs for wine in retaliation for other trade issues, or implementing laws specifically designed to protect local wineries. The end result of these government interventions is that U.S. wines carry an increased cost burden over local wines and other imported wines, making it difficult to compe te in the local markets. In recognition of the opportunities presented by the global wine market and the threat that importers pose to the U.S. wine industry in 1998, the industry created a voluntary initiative called WineVision. The goal of WineVision is to help create strategies that will enable U.S. wineries to be more competitive and to increase the demand for U.S. wine both domestically and internationally. WineVision is focusing on three main strategic priorities: 1) become the leader in sustainable practices environmentally sound, socially responsible and economically viable, 2) make wine an integral part of the American culture, 3) and position U.S. wine as the high-quality, high-value product (across price points) in global markets targeted for the greatest prosperity (WineVision, 2000). This Industry Note provides background information relating to the third strategic priority of positioning U.S. wine as the high-quality, high-value product (across price points) in global markets. An overview of wine and the current global wine industry will be given along with some examples of how U.S. wineries are implementing strategies to compete against foreign producers. .u520f56713bc288f7731aa5387c0c117f , .u520f56713bc288f7731aa5387c0c117f .postImageUrl , .u520f56713bc288f7731aa5387c0c117f .centered-text-area { min-height: 80px; position: relative; } .u520f56713bc288f7731aa5387c0c117f , .u520f56713bc288f7731aa5387c0c117f:hover , .u520f56713bc288f7731aa5387c0c117f:visited , .u520f56713bc288f7731aa5387c0c117f:active { border:0!important; } .u520f56713bc288f7731aa5387c0c117f .clearfix:after { content: ""; display: table; clear: both; } .u520f56713bc288f7731aa5387c0c117f { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .u520f56713bc288f7731aa5387c0c117f:active , .u520f56713bc288f7731aa5387c0c117f:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .u520f56713bc288f7731aa5387c0c117f .centered-text-area { width: 100%; position: relative ; } .u520f56713bc288f7731aa5387c0c117f .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .u520f56713bc288f7731aa5387c0c117f .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .u520f56713bc288f7731aa5387c0c117f .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .u520f56713bc288f7731aa5387c0c117f:hover .ctaButton { background-color: #34495E!important; } .u520f56713bc288f7731aa5387c0c117f .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .u520f56713bc288f7731aa5387c0c117f .u520f56713bc288f7731aa5387c0c117f-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .u520f56713bc288f7731aa5387c0c117f:after { content: ""; display: block; clear: both; } READ: Bingo Long Traveling EssayOverview of WineThe dynamics of the global wine industry are better understood through a brief history of wine as well as an overview of the wine making process. Some countries have longer historical and cultural ties with wine then others and that can affect the quality and perception of the product in the eyes of the consumer. Also, the conditions in which the wine grapes are raised and the processes used to make the wine can create a superior wine and therefore a competitive advantage. Wine has been a part of