CRAFTING WINNING STRATEGIES IN MATURE MARKET Harvard Case Solution & Analysis

Answer to Question #1:

The wine industry has a prominent connection with the past. It has been stated by the archeologists that wine was consistently being produced and consumed since Stone Age.In the past, the wine making techniques were different and time consuming, however the consuming population of wine was aware of the ingredients being used for processing the finest quality wine.
In the past, drinking wine was perceived as trait deeply connected with the religious rituals in the ancient Egypt. Consumption of wine was seen as a means for getting closer to their gods. All these connections with wine have efficiently helped it in evolving as a multi-billion dollar business.

The companies operating in the wine industry have been adequately growing their productions and business with the passage of time.Moreover, the companies operating in the wine industry have efficiently grown their operations within a very small time period. A number of leading companies in the industry have increased their levels of production in multiple of 2 and 3 astonishingly. The wine industries are not only gaining profits for their own growth and supporting their future operations with the help of generated revenues, but the industry is also contributing to the economy of the countries in which they are operating their business. A number of companies producing wine have also increased with the time, due to the large potentials for gaining huge revenues and profits.

In addition to this, the industry is divided in two segments, in which the consumers either require feasible pricing or quality at the cost of higher prices as compared to the price sensitive group.The segmentation of the consumers allows the companies in efficiently meeting the expectations of their target audience.

For the segment that requires high quality wine, the pricing is higher and allows the companies in generating higher margins by catering to the high-end society. The premium class of wine is further divided into two categories, Super-Premium ($7-$14) and Ultra-Premium priced over $14.

The price sensitive segment with a moderate taste for the wine demands their desired wine brand at a feasible price. The segment that requires feasible pricing is basically divided into two further categories; Popular Premium and Jug Wine and others. Jug Wine and others is priced below $3and not more than that. The other price segment is a popular segment which is price ranged($3-$7).
The distribution channels required for supplying the wine in the market are efficient and exist in numerous numbers.The companies are efficiently growing their business operations with the support of a number of competent and effectual distribution channels.

The bargaining power of the customers is high in the industry due to the presence of various numbers of competitors available in the market.Customers can choose from a never ending list of wine producers, which increases the dominance of the customers in the industry.

The growth potentials are huge in the wine industry and are enough attraction for the new entrants planning to enter the industry of producing wine for large masses. Threat from new entrants is high in the industry and the existing companies in the industry have to remain competent in order to successfully compete with the entering entities in the market.

A number of suppliers exist in the industry and the companies have several suppliers to choose from. Existence of suppliers in huge numbers shifts the dominance towards the wine producing companies. The bargaining power of the suppliers in the industry is low due to various suppliers operating in the industry.

The industry is full of companies that are constantly competing in order to increase their market share.The companies are making continuous changes to their organizational strategies through which they can remain competent in the industry. The rivalry amongst the existing companies producing wines is extremely high due to the high revenues margins and customer base.
There is a variety of wines that exists in the market. The industry has high level of threat that is posed by the substitutes. The consumers have developed an enhanced level of taste regarding the consumption of wine. The companies face an immense threat from the substitutes available in the market...........................

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