Group 4

Case Analysis
on
Robert Mondavi And The Wine Industry

Prepared for:

Mr. Bobby Hajjaj

Course Instructor
Strategic Management (MGT 489.1)
North South University

Prepared by:

Fariya Benazir: 1321339030

Ahnaf Akif: 1310439030
Ahmed Mossabir Chowdhury: 1310083630
Khadija Haque Asha: 1231102030
Tahiya Obaidur Rahman: 1230536630
Sajia Afrin Faiza: 1220952030
Lamia Tasneem: 1210586030
VISION FRAMEWORK
Vision:
“To become the finest winery in California.

Mission:
The mission of Robert Mondavi Winery is to strengthen the brand image by producing high
quality and affordable wines that could be enjoyed every day.

Strategic Intent:
To become the leading company to produce the finest wines in the world.

Core Values:
Innovative
Superior quality
Environmentally friendly
Affordable

Core Purpose:
To be able compete with the global brands by achieving best-in class performance.

Identity:
Strategists helping the company achieve its vision.

Goal:
To strengthen the competitive position by concentrating on organic growth and diversification.
Problem identification

1. Declining US (primary market) economy

2. Firm’s jug wine sales fell
3. Disappointment of distributers with Mondavi’s single sales force organization
4. High competition from Australian imports and other California rivals
5. Rival wineries merged with complementors and bringing differentiated products.
7. Large scale producers acquiring premium wineries and capturing youth segment.

8. Price war at the lower end

Key Success Factors

1. High quality grapes’ supply.

2. Global brand recognition will allow to expand into global markets

3. Product Differentiation is crucial in any luxury product

5. Partnerships or Acquisitions to grow in size

Core Competencies of Robert Mondavi

1. High Quality Wine and brand recognition.

3. Innovative technology
4. Differentiated product

Porter’s Five Forces| Premium High End

Segment

Suppliers: SP was low due to majority of the grapes are grown internally with the
company’s resources. Also, Mondavi held long term contracts with the growers
and
The competition in the market is high thus Gallo decided to go for vertical
integration with his suppliers. Moreover, the supplier power is also high as
experienced growers and best quality products are demanded.

Buyer power: Buyer power in the high end is very high as a lot of big brands are
shifting to the high end with their differentiated products.

However, it can be argued that Mondavi with its successful positioning of serving
the best quality has received a huge customer base.

Competitive Rivalry: Top 20 control 75% of vine sales globally. Companies are
getting bigger by acquisitions.

Barriers to entry: High as it takes a huge capital since it is a very capital

intensive industry and also needs the best suppliers to ensure quality. Industry is
consolidated .

But it can be argued that there are inexpensive rice vines.

Threat of substitutes:. Alcoholic beverages for example, beer and distilled spirits;
the success Foster’s group.

Complimentors: Diageo owning Burger King and Pillsbury and serving their wine
alongside their menu. Mondavi has not taken advantage of this yet.

Porter’s Five Forces | Lower End Segment

Suppliers: Most wines and alcohols are imported. Also, many companies are now
shifting to high end premium segments and therefore, it can be concluded that the
supplier power is low.

Buyer power: Buyer power in the lower end is very high as a lot of brands are
being imported and there is high competition in among Cali brands. But then again
a lot of lower end brands like Gallo are shifting to high end. Lots of substitutes are
available eg. alcoholic beverages.
Competitive Rivalry: Competitive rivalry in the lower end is very strong mainly
due to the price war.. The lower end is not growing much as a lot of competitors
are shifting to the higher end of the premium segment.

Barriers to entry: To enter into the wine industry it takes a huge capital since it
is a very capital intensive industry and the finest suppliers for quality assurance.

Threat of substitutes: The threat of substitutes is also high due to cheaper

alcoholic beverages.

The Value Net

Suppliers(Barrel supplies,
grape growers, packaging,
stainless steel)

Competitors (Kendall
Jackson, Trinchero, Gallo,
Robert Complementors (upscale
restaurant menu)
Diageo, South corp) Mondavi

Buyers (Canada, Switzerland,

Coastal retail outlets,
walmart, end users)
Competitors:

1. Kendall Jackson in the lower end coastal segment.

2. Diageo owns BK; complementary products.

3. Gallo: Young and hip image

Complentors:

1. Upscale restaurant menus

2. In flight meals

PARTS:

1. Change the players: Go into a joint venture with Diageo who already owns
two youth oriented restaurants, target youth and bring products tailored to
their taste and win Gallo’s young and hip image.
2. Change the added values: discounts during off peak wine drinking hours.
3. Change the Rules: Continue with providing upscale market, premium wine
at higher prices and also expand market to the youth segment by offering
alcoholic beverages. Be the best of both worlds.
4. Identify tactics: Quality assurance, free trials during tours and change
according to customers’ tastes.
5. Define Scope: Expansion in Asian markets.

The value chain:

Primary activities:

Inbound and outbound logistics: Mondavi made himself his own supplier; used his acres of
vineyard for his own production needs and leased many other acres to grapevine owners who in
turn supplied him. The company employed 200 sales people who promoted the company’s
Froductsto Distributors.
Operations: Mondavi's wine production initiated and sustained general operations in the US and
ensured highest quality fermentation and aging processes. Fine quality products served customers
well.

Promotion and sales: Invested on Golden Vine winery for educating, magazine promo, black tie
parties and restaurants.

Supporting activities:

Technological advancement-
He found new methods and ways to crush grapes and extract ale which is also an unique
form of preservation.

Human resources management-

Whether it is a grapevine yard or packaging or final distribution channel, Mondavi always
stayed updated and managed effectively.

Firm's infrastructure and service –

Later, the company partnered with other wine makers which changed the outlook of the
company. Mondavi was very systematically organized to maintain the infrastructure and to
update himself with better innovations for changing customer preferences.

Recommended Strategies

Expand in Asian market.

Capture the youth segment by introducing lower priced alcoholic beverages.
Go for corporate partnerships with airlines and upscale restaurants. (993 words)