CASE WRITE-UP 4
Wineindustry is artistic and requires skill in order to penetrate and becompetitive. Image and quality earns confidence and trust from itsconsumers. In order for wines to sell world-wide, they have to beaccepted and be of high quality as opposed to quantity.
TheU.S is the largest wine-consuming nation in the world, in dollarterms. In relation to global consumption, it is the fourth largestconsumer in terms of volume, which is representative of 10 per centaround the globe. Much of the wine produced in the U.S is consumedwithin the nation, meaning that efforts to produce quality wine areemphasized. The over-supply of 20 million in terms of populationmakes much of the wine exported by the U.S to be of cheap quality(Jiangand Blunden, 2011).
Ifany nation is to supply wine to U.S, it has got to be of goodquality. This is what gave Australian wines a niche higher thaneither Chilean or French wines. Analysts also believe that Chile alsofailed to build sustainable growth through building brand names andimproving quality. However, in a span of seven years Chile improvedits quality and by the year 2006, it stood at 24 per cent, it beingthe highest percentage of wines imported by the U.S. However, thiswas not the case in the early 1960s and 1970s, when the wineconsumption was ostensibly linked to eating. During such times, thetaste of food was placed first at the expense of the wine quality.Thus, early wine pioneers exposed the U.S taste buss to import andgourmet items. Later in the 1990s there arose a group of celebritycooks who armed Americans with tasty culinary recipes to fulfil thenew demand. Due to diversification of culinary delights, Americanssought to complement their meals with alternative beverages (Jiangand Blunden, 2011).
AlthoughAmericans had traditionally consumed far less wine per capita thanEuropeans, the recipe’s new demand included wine as its leadingbeverage of choice. Both old and new wines became popular making theexpensive blends more frequent in mainstream shops and restaurants.The sale of cheap but quality wine opened up the market to a broaderconsumer base and price pressure would intensify since most consumersopted for wine instead of other beverages (Jiangand Blunden, 2011).
MonarchiaMatt International (MMI) has stood out in the wine industry due toits ability to sell select and unique brands which are of highquality. It has also rebranded the Old World wines, includingHungary’s, contrary to other Old World producers who have opted outof the market. Their unique model of seeking appropriate wineries,purchasing the complete wines in a cast and bottling with their labelhas made it easy to be grounded in the market. The model has alsoincluded purchasing wines from independent Hungarian wineries andproducing their own production and distribution unit (Jiangand Blunden, 2011).
Settingdistribution points in Hungary and concentrating on the local markethas given MMI a competitive advantage using Hungarian wines. This isas a result of improving the blends and selection, and growing theportfolio of Monarchia’s selection. Hungary wines have also givenMMI a competitive advantage by having a Hungary-born U.S citizen asits representative in the U.S. Selling Hungary wines in the U.S hasbeen recognized as a great effort, as it is an obscure country withzero visibility. The model of MMI has also been considered a distinctphilosophy (Jiangand Blunden, 2011).
MMIshould continue using Hungarian wines since the wines are re-brandedrather than new products. Rather than concentrating on producingvolumes, wine industries should offer acceptable and unique productsof high quality. This enhances wine to be incorporated as part ofmeals, which is eventually becoming a culture around the globe.
Jiang,F. and Blunden, R. (2011). CompetitiveStrategy. NewYork: Dalhousie University.