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Copy of Château Margaux presentation

6 december 2013
by

Marketing bachelor

on 4 December 2013

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Transcript of Copy of Château Margaux presentation


I. SITUATIONAL ANALYSIS
1. Introduction
2. External analysis
3. Internal analysis
4. Current strategy
5. Financial performance analysis

II. FULCRUM ANALYSIS
6. Fulcrum analysis

III. SOLUTION ANALYSIS
7. Evaluation of alternatives
8. Competitive strategy
9. Scenario analysis
10. Strategy analysis
11. Conclusion and recommendations
External Analysis (2)
Table of contents
Image by Tom Mooring
Château Margaux presentation
Château Margaux location
Introduction (1)
Problem
Case #7
Château Margaux: Launching the Third Wine
December 6th 2013
Olivia Besuchet
Milo Bozic
Lauranne Guillod
Joanna Kozik
Iuliana Maria Maxim
Andres Mengis
Ludovic Siffert
Global wine industry
Supply
Demand
Buyer behaviour
Wine Production
Porter's 5-forces
PEST analysis
Internal analysis (3)
Resources analysis
Value chain analysis
Current strategy (4)
Current strategy
Financial performance analysis (5)
Fulcrum analysis (6)
What's going to happen if we keep the same strategy ?
Strategic directions
SWOT analysis
Competitive strategy (8)
Marketing mix
Product positioning
Evaluation of alternatives (7)
3 alternatives
Conclusion and recommendations (11)
Scenario analysis (9)
Q:
Should the exceptional wine from 2009 be sold in bulk or under its own brand ?

This raises different issues:
How should they sell this 2009 third wine ?
What happens if there isn't enough one year ?
How should they price it ?
How should they promote it ?
Thousand years of tradition
Global revenues: $60-65 billions/year
Old world producers still the biggest in the industry (France, Italy and Spain)
Since second half of the 20th century – wine making dramatically increased in the New World
Hundreds of thousands of producers with over 30 billion bottles produced per year
Global wine exporting:

Threat of new entrants: low
know-how experience
high customer loyalty
big investments
late return on investment

Bargaining power of
customers: medium
Many players
Middle switching costs
Distributors have middle powers
Threat of substitute
products: medium
Substitutes can be cheaper
But quality won't be that high
Bargaining power of
suppliers: high
Premium segment:
Quality very important
Vineyards can't be easily substituted
Industry rivalry: high
Many producers from all over the world
Despite of market groth the increasing supply forced the wine maker to lower the prices

Political

Subsidization to help clear excess capacity
Restrictions on the planting vines
New markets eliminate restrictions and regulations
Local regulations and restrictions


Economic

Economic crisis
Lower prices for wine in spite of higher consumption









Social

Age limit
Local traditions
Cultural habits
Typical family values and structures
Social status






Technological

New ways of selling wine
New technology for wine producing








Internal flow of goods diagram
Activities of Château Margaux
Production of the 1st wine:
Château Margaux
Production of the 2nd wine:
Pavillon Rouge du Château Margaux
Production of white wine:
Pavillon Blanc du Château Margaux
Organisation of « en primeurs week »

Selling the 3rd wine
Status quo
Négociants
Self marketing
Quantity for the 3rd wine
Enough (ok!)
Not enough
Release ?
Buying bulk
Buying land
Porter's generic strategies

Risk of losing major customers who can’t afford the product (price will explode through intermediaries)
Competitors could imitate
Château Latour
and capture earlier rents and potentially hurt our future profits
Lack of control over targeted customers

Recovering traditional customers lost due to high prices (USA, France, Japan)
Recovering control on final prices at a retail level and reducing the impact of speculation
Honor a tradition of excellence in regional wine production
Use direct sales for France and UK, closer to customer, more profitable, major customers
Ambassadors representing the company in the US as used in China - events, public relation, fairs
New world prospects must be aware of our brand

Heterogeneity: prices from 4$ to 3000$ at a high-end Chinese restaurant

Consumer types based on US market:

Ownership and control
André Mentzelopoulos bought the Château in 1977 for 16 mio$.
1980 Corinne inherited
“Dynamic duo” takes control: Pontallier
wines: Château Margaux & Pavillon Rouge du Château Margaux

Goals:
Maintain tradition
High quality wine

Relational management analysis









excessive quantities supplied to market
lower prices
exit the business altogether
restrictions on the planting of the vines


Strategy analysis (10)
Recommendations
Starting production
of the 3rd wine
Under own name
With own marketing strategy
Marketing Strategy -Autumn Semester 2013
Prof. Dr. Olivier Furrer

Limitations of the analysis:
partly-stationary study
High correlation price-benefit
   
Other factors:
Managers decision
Production
Costs

Estimation of benefit
Understanding the situation
Demand grows and is very inelastic / Luxury product

Price of wine depends of many factors:
Quality: Parkers Rate
Time: price grows with exclusiveness
Quantity: increment caused by distribution
Strategic decision

Liquidy and Debt:
Futures market
Tendance to Benefits
No big projects in years
Owners of property

Profitability:    

Margin per bottle (only current costs)
Growth of demand
Qualitative ratio analysis
Buying
Château Malecot
?
Assures production of 3rd wine
Increases production
Reduces risk
Full transcript