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The Wine Industry Analysis - Essay Example

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In the paper “The Wine Industry Analysis” the author analyzes the history of production and consumption of wine. Tracking the trail of wine through the ages, popularity of wine kept increasing through the ages, despite some problems like the phylloxera epidemic of 1860s…
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The Wine Industry Analysis

Download file to see previous pages... Gradually the industry started modernizing all its processes and using fermentation and refrigeration for producing better quality products. As of now European market comprises of the majority of wine consumers, with other regions gradually joining in. Therefore the industry is indeed an attractive one, but the growing rivalry amongst the competitors has resulted in reduced margins for the industry. In addition threat of substitutes like other soft beverages has always kept the wine industry on the lookout for upgrading their own standards and quality. Some of the major wine producers are Constellation Brands, Inc. E. & J. Gallo Winery, Janton, Pernod Ricard etc. On account of increasing competition some consolidation is also taking place in the industry, with mergers and acquisitions. But the kind of competition amongst the large number of producers can be gauged from the fact that none of the major producers can boast of a market share of 2%. Observing the wine production figures since 1994 and projecting an estimate for the next five years till 2005, Morgan Stanley figured out that there could a marked decrease in the production levels in some countries, particularly after 2000, but this is more because of the increasing competition, which again is a pointer towards the attraction of the industry. Wine brings cheers to the consumers and has survived many adverse circumstances. But today the industry has made itself resilient enough towards such circumstances and facing them boldly.

Q-2: What is the basis for competitive advantage
Ans: Wine industry has in fact inherited some of the competitive strength in the form of its association with prestige and sharing happiness. In general the competitive advantage of wine industry is based upon the following facts;
Quality of wine is decided as per the climatic conditions, the land and the ambience, which gives it a unique identity.
Its shelf life is much more as compared to other drinks and beverages.
Wine is mostly used as a pleasure drink, with friends and colleagues. Therefore the consumption of wine in a group tends to become more.
Wine companies generally have a portfolio of products reflecting a wide variety of choices demanded by consumers in various style and price ranges. There are low-cost high volume varieties, premium varieties and ultra premium varieties.
The market is ever growing with the drink becoming quite fashionable amongst the youth.
Wine if taken in controlled quantity can have medicinal effects as well, therefore even doctors, other health professionals, NGOs too do not feel the need to be up in arms against the drink.
It has been observed that citizens above the age of 50 years consume more wine than the younger ones. And with the a sharp rise in the average age of an individual, thanks to the advancements in health care ...Download file to see next pagesRead More
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