Porters Five Forces Analysis of the French Wine Market

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France: Porter’s Five Forces Analysis

Wine consumption in France is on a steady decline due to an increase interest in health, drinking and driving laws that are being heavily enforced, and controls on advertising. In fact, European drinking habits on a wider scale are shifting. An introspective look shows that European countries that were predominantly beer drinking nations are consuming more wine and predominantly wine consuming southern Europeans are converging towards a more ‘wine’ drinking way of life. The English for example now drink three times as much wine per head than they did in the 60’s and the Dane’s may soon become larger consumers of wine that some of the old world producers (Smith and Jenster, 2003). The profile of these changes will impact suppliers, purchasing power of consumers, and the image of the global wine industry, especially in a country like France, which regard their obsession to be quality driven over quantity oriented.

Porter (1980) stresses the importance of the competitive position of an industry by considering the five forces within the market. The likelihood of a business making profits depend on five factors:

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Rivalry among competitors: Moderate

The degree of rivalry in this industry is the most obvious among all the remaining forces. Strong competition from the new world is restructuring the world’s perception of wine, especially since driving forces has made Wine in affordable prices. The mass production of this once known bourgeoisie alcoholic beverage has taken a new image on the global scale. New consumption and production trends from rivals have shifted the demand and supply curves of this industry to new levels, thus inflicting most damage to French wine.

In Europe, there are a huge number of players with no ...

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