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Crafting Winning Strategies in A Mature Market: The Us Wine Industry in 2001

The US wine industry in 2001 faced challenges of high costs, stagnant demand growth, and intense competition from many new entrants. The threats of new entrants and substitutes were high due to low barriers to entry and consumer preferences for other alcoholic beverages. Existing industry rivalries were also high as a wine surplus led to downward price pressure. Buyer power was high from industry consolidation among retailers and distributors. An established player needs a strategy to differentiate and find niche markets to succeed in this mature industry. A new entrant's strategy must focus on differentiation and building brand loyalty given the competitive landscape.

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266 views6 pages

Crafting Winning Strategies in A Mature Market: The Us Wine Industry in 2001

The US wine industry in 2001 faced challenges of high costs, stagnant demand growth, and intense competition from many new entrants. The threats of new entrants and substitutes were high due to low barriers to entry and consumer preferences for other alcoholic beverages. Existing industry rivalries were also high as a wine surplus led to downward price pressure. Buyer power was high from industry consolidation among retailers and distributors. An established player needs a strategy to differentiate and find niche markets to succeed in this mature industry. A new entrant's strategy must focus on differentiation and building brand loyalty given the competitive landscape.

Uploaded by

susmita
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CRAFTING WINNING STRATEGIES

IN A MATURE MARKET:

THE US WINE INDUSTRY IN 2001


SUBMITTED BY
SECTION 2, GROUP 2
INDUSTRY LANDSCAPE IN 2001
• ADD COSTS AND DEMAND ISSUES ALSO
HOW ATTRACTIVE IS THE Shushmitha (DM20249)
INDUSTRY?
• THREAT OF NEW ENTRANTS – HIGH - LOW BARRIERS TO ENTRY FOR NEW
PLAYERS, ADVANTAGES FOR SMALL WINERY
• THREAT OF SUBSTITUTES – HIGH - ONLY 10% PEOPLE DRANK WINE
REGULARLY, OF THE REMAINING 90%, 46% PREFER BEER OR SPIRITS, 44% DO NOT
CONSUME ALCOHOL – 35% DRINK ALCOHOLIC BEVERAGES OTHER THAN WINE
• EXISTING RIVALRIES IN INDUSTRY – HIGH - TOTAL NO OF WINERIES IN US
INCREASED BY MORE THAN 400%, LOW GROWTH IN DEMAND – LED TO
DOWNWARD PRESSURE ON PRICE AND MARGINS
• BARGAINING POWER OF BUYERS – HIGH - MORE PLAYERS ARE ENTERING THE
MARKET – PRODUCTION OUTSTRIPPED DEMAND BY 15-20% – CONSOLIDATION OF
RETAILER AND DISTRIBUTOR
• BARGAINING POWER OF SUPPLIERS – LOW
WHAT STRATEGY SHOULD AN ESTABLISHED PLAYER
FOLLOW TO BE SUCCESSFUL IN THIS INDUSTRY?
SHOULD A COMPANY ENTER THIS INDUSTRY? IF YES,
WHAT SHOULD ITS STRATEGY BE?

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