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Martina Svobodová

on 23 October 2014

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Transcript of WINE

Demand and knowledge
October 23, 2014
Martina Svobodova, Frederic Keller, Biko Hüster
Background Information
Facts & Figures about the Wine Industry

New World vs Old World
Discussion - Quiz
Horizontally and vertically related industries with multiple interaction types leading to higher productivity
Benefits from increasing returns and positive externalities
Regional cluster - shares geographic proximity within a region in a country
Geographically clustered firms co-operate while competing
Clusters and network
Social interactions and networks are important within clusters

Communication preferences strongly influence interaction and communication in regional clusters

New marketing approach:

Co-operative retail strategies and branding

Specialization in marketing roles
Internet use in international B2B marketing
Active socialization among knowledge holders are effective ways for firms to fully disperse and capitalize on their generic knowledge.
Keen & Wu, 2011
Actors and networks
Interplay and co-evaluation of elements influence the nature and opportunities of actors

Remarkable process of consolidation - worldwide

(trans-)national mergers and strategic alliances have intensified

Most concern the New World
Actors and networks
Chile's industry :

Growth during 1990s
The largest winery
Vina Concha y Toro
Top 10 largest companies
Dominated by few family companies
More than 45% of export value
Actors and networks
South African wine industry :

Breaking up with many private cellars and producers
Some large companies also included among the 10 world largest

Actors and networks
In Europe:

Significant differences among Old World wine countries

French companies - grown in size and expanded overseas

Italian companies - small, family based
Clusters and network
Actors and network
1) Firms join clusters to increase the risk and uncertainty.

2) Chile's family-based industry accounts 45% of export.

3) Use of external enologists in Chilean companies is around 50 %.

4) Part of the main research focus is the introduction of new grapes.

5) The two new world countries Italy and France produce roughly 35% of the wine world wide.

6) After presenting to you the catching up strategy of the New World, such as using clusters to create a competitive advantage, what options or counter strategies does the Old World have to fight back and become more competitive?
Extensive exchange with potential customers
Understanding the needs and wants of the customers
Quality improvement (from "bulk" to "premium" wines)

Major competitive advantage:
Reputation building (quality ratings)
High effort in the development of new special wine
Strong brand orientation (country brands)
Newcomers demand strategy
Linkages to the lecture
Focusing on the needs and wants of customers (ch 1/2)
Strong customer & competitor orientation (ch 2/2)
High competitiveness by understanding the customers (ch 2/4)
Proper actions by newcomers:
Failures by old countries: (ch 1/20)
Inability to find right market niches
Products are not perceived as sufficiently unique
Knowledge base & innovation
Newcomers science and innovation strategy
Linkages to the lecture
Science and researchers of newcomers
Process of modernizing:

Main focus of research:
New grapes
Regular taste & quality
Modernization of technologies and production methods

Sustained scientific research with increasing number of scientific publication (mostly Biology and Biotechnology)

Development of co-authorship by academic researchers

International linkages

Research communities in emerging economies

Increasing number of international collaborations by scholars
Innovation and firms
External knowledge:
Flying Winemakers
Copying of external technology (Creative adoption and selection)
External agronomists and enologists
Use of foreign external consultants

Internal knowledge:
Production techniques of farmers
Practical problem-solving approaches of farmers

Ch 2/15: The strategic marketing decision process
Identification, Building and Development of new competencies

Success of knowledge building depends on:
Existing knowledge
Knowledge from external sources (foreign direct investments,external consultants and research collaborations)
Above-average use of external consultants - Chile: 92,6 %, 88,9 %
Leader in the field of experimental activities - Chile 81,5 %
Percentage of innovation with external collaborations - Chile 85,0 %
The most new grape varities - Chile 77,8 %
Percentage of new or improved wine-making techniques - Chile 100,0 %
Wine Tasting
Test the wine on the
following aspects:

New Wold
South Africa
New Zealand

Old World


second highest wine production (17,3%)
low domestic demand
36.6% export
doubled in 40 years
premium wines

4,6% production of wine
New Wold country (MEDC)
Shift away from domestic orientation
61% export nowadays
40 years ago 1,5% exported

similar situation as Australia
high export rate of wine
largest wine producer in Latin America
focus on supplying emerging markets
low to average price
shift to premium wines through FDI & JV
1-Wine Tasting


3-Demand Changes

4- Knowledge Based

5- Clusters

6 - Actors & Networks

Linkage to the lecture
Thank you
for your attention & cheers
Full transcript