Crafting Winning Strategies in a Mature Market: Harvard Case Solution & Analysis


The wine industry of the U.S. is uneven and the consumption is scarce among the population. The production capacity of the industry in the country has exceeded the utilization capacity of the market. It is due to the fact that the number of wine manufacturing company has abnormally increased in the country and top of that the market is also being flooded by foreign brands. Domestically, the U.S. is the fourth largest wine producer globally while it ranks above 30th place in wine utilization globally.


The production of the industry is increasing every passing day however;the utilization of product in the market has been almost the same. According to some surveys and estimates, less than roughly 10% of the population of the country drinks wine and it is due to this reason, the competition is intense in the market and the more established and financially sound wine makers are dominating this segment. There is little or no space for smaller wine makers to operate.




The U.S. market of wine industry is very limited as it represents a mere 10% of the whole country`s population. The number of wine producers in the country is rapidly increasing day by day and presently roughly less than 20% of the revenues of the market were reaped by international wine producers. Therefore,the threat of new entrants still remains high in the country.


The number of wine producers in the country is more than 2500. The markets are flooded with wine products and it is due to these above mentioned reasons that the bargaining power of consumers has become very high. In order to adapt to this crisis,the companies had to bring down their products’ prices.


The major shareholder wine producing entities account for up to 70% of the market sales and revenues. To maximize their benefits and improve their quality and standards, these companies have harvested their own resources over the time. This has resulted in a lesser role of suppliers in the market to a great extent because only smaller entities mostly deal with them. Thus, their bargaining power has decreased and become low.


The assessments and sampling tests of the population reveals that more than 80% of the market population does not drink bear. While roughly 40% of the market does not drink at all, the other half prefers other substitute drinks. This makes the threat of substitutes high.


Competitive rivalry is high in the market. The number of wine producers has dramatically increased in the industry and there is no substantial growth of demand in the market. The segment of population that prefers and buys wine is a minority of the country. The big companies have a strangle hold on this market and it is not very easy for others to survive..............

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