Competition in the Global Wine Market:

 Competition inside the Global Wines Industry: Essay

Competition in the Global Wine Industry:

A U. S. Perspective

Murray Silverman

Professor of Management

University of Organization

San Francisco State University

1600 Holloway Opportunity

San Francisco, LOS ANGELES 94132

Telephone: 415-338-7489

Fax: 415-338-0501

Email: [email protected] edu

Richard Castaldi

Professor of Management

University of Business

San Francisco State University

Cellphone: 415-338-2829

Fax: 415-338-0501

Email: [email protected] edu

Sally Baack

Assistant Mentor of Managing

San Francisco State University

College of Organization

Phone: 415-338-6421

Email: [email protected] edu

Greg Sorlien, MBA

San Francisco Point out University

College of Business

Competition inside the Global Wine beverage Industry:

A U. S. Perspective

The entire volume of a global wine industry in 1998 was measured in 6. almost eight billion gallons, with 25% of the total volume accounting for wine beverage that was purchased outside of the country from which the wine was produced (California Wine Foreign trade Program, 2000). This symbolizes an increase above the 1991-95 period, during which the export part of the market averaged about 17% by simply volume. The increasing trend for the export marketplace since 95 is due primarily to a enhancements made on the ideal priority that wine creating countries are placing on transferring as a method for growth. In the past, the market to get wine was primarily one among local development and ingestion. That paradigm has changed in the last few decades like a few of the more established wine drinking countries have seen their per capita intake stagnate or decline (Table 3). As well, several wine beverage producing countries around the world have got begun to create an impact on the export industry in an attempt to expand their companies beyond their particular limited community markets. The result of this switch in market focus for some of the older wine producing countries and also rise of new wine making countries all over the world has caused an increase in the competitive character of the global wine market.

Currently the U. S. may be the fourth largest producer of wine in the world (Table 1) yet just accounts for approximately 4. 2% of the total wine foreign trade market based upon volume (Table 2). One reason for this disparity could be attributed to the lower level of tactical importance placed on exporting by most U. S. wineries. In the past, an extremely common export strategy for U. S. corporations was to export only the excess capacity that was on hand due to above production (Monterey County Herald, 1998), as a result there was very little focus on building a occurrence in the global market place. International governments can also restrict U. S. wineries ability to work by using anti-competitive actions such as implementing large tariffs pertaining to wine in retaliation intended for other operate issues, or perhaps implementing regulations specifically designed to shield local wineries. The end result of the government surgery is that U. S. wines carry an increased cost burden over local wines and other imported wines, making it challenging to compete in the local markets.

In recognition from the opportunities provided by the global wine industry and the risk that importers pose for the U. S i9000. wine market in 1998, the industry created a voluntary initiative called " WineVision". The aim of WineVision should be to help generate strategies that could enable U. S. wineries to be even more competitive and also to increase the demand for U. H. wine the two domestically and internationally. WineVision is centering on three primary strategic focal points: 1) end up being the leader in sustainable methods - ecologically sound, socially responsible and economically viable, 2) generate wine a fundamental element of the American culture, 3) and situation U. H. wine because the premium quality, high-value product (across value points) in global marketplaces targeted pertaining to the greatest prosperity (WineVision, 2000).

This Sector Note delivers background information concerning the third tactical priority of positioning U. S. wine beverage as the high-quality, high-value product...