Case study: Beringer Blass Wine Estates against Globalisation and increasing competition

Essay by inocheatingUniversity, Bachelor'sD+, April 2005

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Situation Analysis


Economical factors such as exchange rate should be closely monitored by Beringer wine estates as it's involved in import and export activities. The exchange rate will affect the profit which the firm makes.

On the other hand, government and state legislation and polices must also be complied carefully since it's different in states and countries. Fines maybe imposed for wrong doings of firms.

Natural factors can also affect the business since rainfall, seasonal changes, soil status and global warming can affect the growth of grapes which are used during wine production.


Threat of new entrants

The threat of new entrants is moderate in wine industry. The technology in wine industry is common and independent business can have access to those technologies in regards of making wines fairly easy. On the other hand, there are vast numbers of brands in winery and moderate brand franchise which make it moderately easy for new entrants to join the market.

Further, new winery producers can have some degrees of access to distribution channels. However, government and states policies can limit entrants to join the market.

Threat of Substitute

The threat of Substitute is low. Luxury premium and commercial premium wines are for special occasions and on dinner tables. It serves a different purpose compare to soft drink, beers and fruit juice which is more generic.

Bargaining power of buyers

There two buying group which are customers (end users) and dealers (intermediary customers). Consumers have a relatively low bargaining power since they do not buy in large quantities and they are fragmented. Bargaining power of distributors (2nd tier) is high. As the case study mentioned, there are 6 major distributors cater for most of the distribution of alcoholic beverage to 3rd tier. These 2ned tier distributors control nearly 60 percent of...