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VINCOR AND THE NEW WORLD OF WINE

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by

Kanika Goel

on 29 October 2014

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Transcript of VINCOR AND THE NEW WORLD OF WINE

Assessment of Major Issues
THE INDUSTRY OF WINE
Industry Trivia
Vincor International Inc.
Industry Trends
VINCOR AND THE NEW WORLD OF WINE
Wine is a mark of cultural heritage

Global wine industry represents over $230billion of trade


A World Divided
Over 90% of global wine trade by top10 wine exporters
France - world leader of wine production
Growth of industry by 2.2 percent
Imports are highly concentrated

No single player or brand had been able to rule the market
Emergence of new players
Increasing consumer preference to red and premium wines
Globalization of wine market
Country: Canada
Founded in: 1989
CEO: Donald Triggs
Three phases of growth:
Leveraged buyout from 1989-1995
Consolidation from 1990-2000
Expansion on international level 2000 onwards
Increase sales by 33.33% in Canada
Double the sales in U.S.
Increase Icewine sales by 233.33%
Generate sales worth 350 million CAD by acquisitions
Sales objectives:
Vincor International Inc.
Founded in: 1976
Position: One of the largest wineries
GOUNDREY WINES PTY. LTD
1. Given your assessment of Vincor's global competitive position in the wine industry, does it make sense for Vincor to try and become a global top ten player? Why or Why not?
Strengths and Capabilities
- Strong regional position

Revenue
- Strong financial position

Strategic Vision
- Modern Vision

Distribution Network
- Strong
Assessment of Major Issues
2. Should Vincor concentrate on further developing the United States market or expand into a geographically distant country such as Australia? What are the risks of such an expansion?
Opportunities in both expansions
United States:
- Largest market of wine sales and consumption
- Biggest untapped wine market
- Low barriers to entry
Australia:
- Access to the super-premium wine industry through Goundrey
- Largest network for distribution
- Australian exports to high profile market

Assessment of Major Issues
Risks in both expansions:
United States:
- Less Exports
- Domestic need is fulfilled by the US companies
Australia:
- Fear of non-acceptance
- Stiff competition can be attracted
Suggestion:
- Focus on expanding to United States more
Assessment of Major Issues
3. What will Vincor gain by acquiring Goundrey? How does Goundrey fit into Vincor's overall strategy?
Goundrey Wines
Help Vincor to convert to a global player
Produce higher quality product at a lower cost
Do product differentiation
Significant reduction in costs
Vincor's Strategy was to be a global player and create premium brand wines.
Australian market provides Vincor to implement and fulfill its goal by providing premium portfolio.
Recommendations
Revise the sales objective

Concentrate on U.S. market

Look for markets which have high exports as well as imports
DANK JE
Here's to a job well done
Full transcript