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MGNT 2510 - International City Presentation

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Michelle Lee

on 30 October 2012

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Transcript of MGNT 2510 - International City Presentation

MGNT 2510 - Group 1 Agenda Basic information about wine industry nowadays Recent development & situation around the world Information of Chile Information of France Thank you :) Wine Industry background & Historical Facts

Comparing 3 cities inside Argentina, Chile & France

Insights more than 7000 years of history (since 6000BCE) wine grapes grow between 30 and 50 degrees latitudes north & south of the equator

wine-makers compete for the lowest cost & the best quality grapes and land 5th largest economy measured by GDP
9th largest economy measured by purchasing power parity
Europe's 2nd largest economy by nominal GDP
The wealthiest nation in EuropeHigh standard of livingHigh Public education level Located in South America - West of Argentina
One of the most stable and prosperous nations
One of the ABC powers: Argentina, Brazil and Chile Ng Yin Yan, Fanny 1155016054
Au Kwok Hei, Charles 1155015426
Lee Wing Sum, Michelle 1155017876
Lo Wing Yau, Yoyo 1155016456
Luk Ying Ho, Luka 1155017413
Lee Tin Wai, Sophia 1155015646
Wong Chun Kit, Jacky 1155004529 market changes - consumers preferences change

France is leading the wine production & consumption

However, they are also witnessing a steady erosion of global market share

Prediction - losing market share Table 1: Global Wine
Production of
Leading Countries
Based on 2003-2008
(million liters) Regulation: Winemakers can adjust to the market needs
Producer professionalized the industry At 2004, created Wine Strategic Plan with objective - leading inboth export & domestic market

1) position Argentine high-quality wines in the Northern Hemisphere markets
2) develop the Latin American wine market & promote wine consumption in the domestic market
3) support the development of small grape producers, and incorporate them into the wine business Government Support:-
focused on supporting small scale wine grape producers and promoting increased production of sparkling wine.
supplied equipment to about 230 small wine producers from Mendoza and San Juan, valued at over $1.1 million where 60% of all Argentine wine is manufactured Climate: dry
Temperature: high average
Irrigation is facilitated by the various rivers which cross the region
High sea level - features an enviable array of grape varieties Factors of success

Reason of such a big growth? Compare with Chile & France? Why do we choose France & Chile to compare with Argentina? Background of Argentina 5th largest wine producer
7th largest consumption
7th largest exporter - exports continue to grow
Growth - not just by increasing in voloume but also the unit value
366 wineries producing for the fine wines segment with 3,400 different labels, Information of Mendoza SWOT Analysis Strengths: High sea level
Natural irrigation system
Proper temperature
Foremost wine-producing Province
Historical Fact
Great Internal Consumption SWOT Analysis Weaknesses: Intense Competition
Developing Country
Earthquake SWOT Analysis Opportunities: Merger with existed brand
Developing Country SWOT Analysis Threats: Trading Barriers PEST Analysis Political: Regulation
Government Support
Marketing Strategy Economic: Foreign Investment PEST Analysis Social: Training of Human Capital Technological: Cutting-edge Technology
Research & Development Wine in France Producing 23.1% of the total wine in the world
Quantities 50-60 million hectoliters per year (7-8 billion bottles)
Production range: expensive high-end wines sold internationally to modest wines
Consumption has been dropping in France for 40 years Information of Bordeaux Counts for 1/3 of the good quality French wine

World's major wine industry capital Climate & Geography Excellent environment for growing vines Strict regulations Decline in internal consumption
Rising of competition from developing countries
Decline of the economy in Europe Environment Political: Strict regulations in wine production
Appellation d'origine contrôlée (AOC) PEST Analysis Social: High reputation in wine production
Labour protection Characteristics: Wine in Chile 5th largest exporter
9th largest producer in wine
exports 70% of its wine production
Wine regions are located in the central of Chile Information of Central Valley Most productive
next to Mendoza
4 sub-regions that produce wine
River runs west from the Andes to the ocean - essential to the growth of grapes Geographic and Climate Host at least 7 major climatic subtypes
Not every part of Chile is suitable for growing grapes - only central part suits
Cental Valley - Mediterranean climate
Lower in sea level leads to a lower variety in grapes
High salinity stemming from irrigation
Low potassium level & deficient nitrogen level
Viticultural techniques Regulation Established the boundaries
Established regulations for wine labels
no restriction of grape varieties, practices or wine making techniques Policies Strategic plan & objectives - becoming no.1 of the New World by 2020
No specific policy to support the wine industry PEST Analysis Political - Free trade
Social - high income inequality Factor 1 : Climate Introduction:

To compete with other cities (including developing and developed cities), climate become the major factor in geographical environment, which determine the succeed in wine industry.

. Now, we will try to compare the current situation in climate among the three cities Factor 1 : Climate Indispensible factors contribute to Mendoza success in wine industry Insight 2011
Early spring frost
Storms, hail, drought, heavy rain
(Sunny and hot weather during harvest period  Good!)

 Hail Natural hazard - Mendoza 2012
Remained 40 Degree Celsius in consecutive days in August
Grapes stopped growing or even being charred
Weather was wet in spring while summer came earlier
Mildew (白粉病, 霜霉病) spread in large area

June  Vines almost being dried (Crop loss nearly 20%)
August  Excess rainfall
September  Hail Storm Natural Hazard - Bordeaux Climate
Government Policy 2012
May  frost
July  drought + hail
(Still fine)

Jan  8.8 earthquake
bottled or still maturing in oak barrels
A total loss of 125 million liters of wine
(12.5% ​​of total output in 2009). Natural Hazard - Central Valley To maintain its competitive advantage in climate……
Mendoza should adopt some measures to reduce loss suffered from bad weather.
1. Build greenhouse / Use moveable cover
 Withstand hail / storm / heavy rain etc…
(maybe costly)  concentrate on serious suffering area
2. Promote environmental protection
 Extreme weather is coming from global warming
 Improve this situation by protecting the environment
(Start from Argentina…)
Need co-operation from other countries
 Educate the public
 Develop environmentally friendly planting technique Climate
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