Problem:The company is facing two problems:1.) Wine Industry's uncertain sales environment.
2.) The further strategy of WE division is under the question (this could serve also as a Sub-problem).
Symptoms:First problem symptom:1. Many outside aspects as political, macroeconomic as well as social can influence the wine market. There can be the periods when the sales are good and then come something unexpected and everything changes. For example, September 11, 2001influenced the wine market by slowing industry growth.
Second problem symptoms:1. Managing director of WE division Thomas Burnet is going to work to the rival company.
2. The person who suggested to make WE division is leaving and now Steve Dorfman has to figure out what should be the marketing strategy for this division and weather this division has to stay as separate or to make back the synergy with the rest of the company.
Alternatives:I. To leave the WE as an independent division of BFC.
+ They already showed that it is better to work the wine industry separately from the other divisions.
+ They have unique position because they have "parent company" which is cash rich and it gives many opportunities for them as separate business division.
- The person who suggested making this division separate is going to work to the competitors.
- The management is not satisfied with the results in WE which are also affected by several outside conditions.
II. To make synergy between wines and spirits and to leave only premium brands.
+ It would cut costs as they will have one Chain Management and everybody will be better informed.
+ Their profit will be higher if they will add premium segments of spirits.
+ By leaving only premium brands it will be easier for them to make positioning in the market.
- They will...