Global Wine War

2100 Words9 Pages
I. Early French Dominance of the Global Wine Industry France’s early dominance of the global wine industry stems from several factors that reflect some of the key attributes that Michael Porter identifies in his National Diamond Model as determinants of competitive advantage for a nation. Such factors include: comparative advantage, big domestic demand and domestic rivalry, as well as governmental support. Applying Porter’s Diamond provides a model that can help explain France’s early growth and dominance in the global wine industry. First, France had a comparative advantage manifested in climate and natural resource endowments. Indeed France was particularly successful in promoting this advantage and perpetuated the idea of “terroir”, which represented the impact of the combination of soil, climate, rainfall and other cultivation factors in providing a taste of individuality to the French wine. This, and that was long considered a strong barrier against market entry of foreign competitors. This concept of innate French superiority was not debunked on the world stage until the 1976 “Judgment of Paris”. Second, France adopted some innovations that they thought will greatly benefit the wine industry, for instance producing and utilizing glass bottles, using cork stoppers and application of pasteurization techniques. Such innovations contributed to better stability of their products and allowed for expanding production, and accordingly exports. Applying those technologies were the portal for France to create a global market for its wine with its first mover advantage. Even after the emerge of the New World wine industry, and in a response to a deadly pest that threatened its vine stock in the last quarter of the 19th century, France imported pest -resistant vine roots from the United States and grafted it to the French vines to salvage
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