What should the management of BRL Hardy do to ensure that it's European unit's actions fit with the company's strategy to become a global wine company?

* The management tend to overlook the differences between the Australian and UK market

Opportunities

* The company may start a product segment focused on women to take advantage of the female buyers, which comprise 60% of the supermarket wine buyers.

* Trends towards globalization opens BRLH to other product factor sources

* Strong brand orientation establishes product recall in buyers

* The changing consumer profile trend fits BRLH's evolving strategy

* Increasing demand for quality wines

* Market for product to fill in the price points that had been vacated as Stamps and Nottage Hill had become more expensive

* More wine-drinking countries in Europe are still not penetrated by the BRL Hardy brands

Threats

* There is always a risk of poor vintage in a region brought about vulnerability to weather, disease, and similar factors.

* Currency fluctuations expose traded products to currency-driven price variations and ultimately affect marketability

* Brands that BRLH does not control may decide not to renew their distribution agreement

* UK buyers prefer to buy from small village labels due to channel proximity

* Wine-lovers look for something they haven't tried, thus bending away from the objectives of branding

* Looming unification of the European Community into European Union pushes the favor of trade competition towards European wine suppliers.

* Wine-producing competitors particularly from France and Italy, where are members of the European Union

OPTIONS

Option A: To market Kelly's Revenge in U.K. and not Banrock Station

Option B: To market Banrock Station in U.K. and not Kelly's Revenge, as instructed by the parent company in Australia

Option C: To market both Kelly's Revenge and Banrock Station in UK, and allow the consumers to decide which product need to be pushed into the UK market.

Option D: To market Kelly's Revenge in U.K. only and Banrock Station in the other countries in Europe

RECOMMENDATION

Carson has begun to globalize his strategy beyond selling the parent company's wines. After a difficult joint venture with a Chilean wine source, he is proposing to launch an Italian line of wines. His local team has also developed a new Australian brand that would compete directly with a parent company's global brand rollout.

The global beverage market is large and diverse with an ever increasing range of products, which aim to satisfy the health, image and individuality requirements of consumers as well as basic thirst, and price needs.

Although there is a strong trend away from alcohol beverages and alcohol consumption, quality table wine occupies a unique position. It is the most appropriate food accompaniment beverage; it has image and status, has acknowledged health attributes, provides variety, engenders high consumer involvement and has a range of flavor complexity. It is therefore a stronger alternative to other non-alcoholic beverages than is beer or spirits.

Global product branding with multi-variety and multi-country sourcing will develop, but on a micro-scale there will be a paradoxical interest in premium wines with a specific regional and sub-regional identity. Globalization also will see the widespread extension of wine company alliances and joint ventures across national boundaries.

Significant opportunities exist for increasing domestic wine consumption as a result of population growth in prime wine consuming age groups, growth in the dining out market, increasing popularity of the Mediterranean diet, tourism growth and the quest for more individualized beverage experiences.

The industry's Vision 2025 recognizes that the domestic market is critical to the industry's long term success. This will be achieved by extending the occasionality of consumption by the marginal wine consumer segment and by developing consumption in the prospective wine consumer segment.

The wine industry and tourism industry have a common objective of capturing and presenting a unique sense of place to consumers, whether they be wine drinkers or tourists. An anticipated growth in self discovery tourism in the next century, prompted by the maturation of income and time rich Baby Boomers and the increasing affluence of Asian consumers, means that a number of opportunities exist. Wine tourism in Australia is currently estimated to be worth around $400m with potential to grow substantially to $1100m.

Millar believes that the massive new plantings in California and to a lesser degree in the Pacific Northwest will produce more wine than can be absorbed in the national market. The answer for Australia would be to buy the California wineries, and end the threat.

If suppliers do not have brands which are must--stock brands, or if they do not have a diversity of product offering which those global supermarket chains want because they want to deal with fewer suppliers, then you are going to be looking at some serious problems.

BRL have to face a world with global supermarket chains. These chains are going to want to deal with fewer and fewer suppliers.

International Business

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