Sbe330 Cork Case Study

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Questions 1 To what extent is the cork industry guilty of complacency and a lack of innovation? The cork industry is guilty of complacency and a lack of innovation because there was a failure to notice the changes occurring in the wine industry. Although, the comfort of the cork industry was strong and was unaffected for the past 400 years, due to the changes the cork industry is facing a difficult time in its environment and economic strength. Modern materials are being used for the closures of wine bottles instead of cork, such as plastic and rubber. Cork is used in other products but the wine industry prefers the natural use of cork, until recently. 2 If consumers love corks, why are the producers not providing what their customers want? Even with the love of cork, consumers are not being provided the cork because of new retailing markets from Australia, Chile, and California. These countries are breaking into the market and have chosen to use the modern way of sealing wine bottles with rubber corks or plastic screw caps. No longer feeling the cork “taint” has become important to the industry. The more traditionalist in the industry expresses the view that these types of wines are a mass market, money maker with large volume of homogeneous wine. It creates a huge profit, short term. Harvesting the natural cork is also an incredibly long process, which does not favor commercial use. Virgin cork is not removed from the sapling until the 25th year of the tree’s life. Reproduction of the cork only occurs another 9-12 years after the initial 25 years. 40 years is the natural corks plantation investment, and with the continuous growth in technology the investment will decrease and loose its value over time. 3 Is it wine quality or costs that have driven producers to synthetic? The producers have switched to synthetic because of both quality and cost.

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