Industry Key Success Factors
The success for any wine producer in the market depends on his ability to enter the market with a strong distribution network. In addition, the brand value should be good meaning that the company should be well known in the premium market showing that the company produces quality wines. In addition, the company should expand into newer markets by forging local alliances, in order to expand its market and customer base. E. Summarize the opportunities and threats that confront industry competitor.
Opportunities: The major opportunity available with Vincor is the emergence of newer Asian markets where the purchasing power and the standard of living is on a rise. Additionally, the company could focus on all the types of product segments depending on the type of the market Threats: The major risk would be the production and distribution of wne products. Being an agricultural product, the production depends on the local weather conditions, which are not ideal for the Asian countries.
In addition, the distribution cost might be high if the company decides to directly export wine from the locally based production unit. II. A complete analysis of the company and its strategy A. Elements of Strategy (Diamond Model) Arenas – Vincor wishes to grow in the US market and possibly in other countries of the world. Their strategy was to shift to the premium segments in Canada and US. In addition it also wished to have its core brand Icewine to become internationally recognized by distributing it in select stores in the Asian market.
Vehicles – The Company wished to enter the newer markets by acquisitions in larger consumption markets, and then exporting it to the nearby markets from these newer areas. This would also improve the sales and distribution channels of the company. Differentiators – The major differentiating factor which the company wished to keep was to be in the premium market worldwide to improve its brand recognition value, which would be helpful at the time of launch of newer products.
Staging – Once the strategy was formulated, Vincor started to acquire companies at a rapid pace in the US to capture the growing market in the area. It then proceeded to enter into the Australian market by way of acquisition to enter the Asian region indirectly. Economic Factors – Vincor was attracted towards the US market due to the fact that the profit margins were high and there were few brands available in the market. The company wished to increase its reliance on the premium segment rather than graduating downwards towards cheaper segments.
B. Identification of the company’s Generic Strategy Type While the company wished to follow three different strategies in US, Canada and the other world countries the underlying strategy was the same in every way. The generic strategy was one of differentiation. In Canada, Vincor did it by building up its share in the premium segments, while in US it did by increasing its product portfolio in the super-premium segment and in the Asian country it concentrated on improving the brand value of its signature product Icewine.