world wine wars Essay

920 Words4 Pages
Porter Analysis: Global Wine Wars Product and Technology Development Wine Making Technology The are several differences in the approach to wine making taken by the Old World and New World producers. Old World firms are constrained by tradition, regulation and vineyard size. Without these constraints, new World producers are able to take a more modern approach to grape growing and wine making. The New World firms did not have immediate name recognition for their wine. They had to rely upon modern, reliable, cost-effective ways to make quality wine consistently. They had no real tradition to build upon, but focused on innovation. New World firms use larger vineyards, drip irrigation, mechanical harvesters and pruners, trellis systems and fertilizers. Labs and computers are used to run tests and analyze data in order to improve their processes. These techniques led to more consistent wine quality, year in and year out. Alternatives Price/Quality There has been a shift in world wine demand from lower quality to higher quality wine that command higher prices. Wine in this category ranges from $5 to $20 per bottle. This phenomenon has occurred while overall demand for wine is declining. The New World producers have increased sales in this category to the detriment of Old World producers. One successful technique of NW firms is to create a hierarchy of brands with informative labels for each wine within a given price range. This labeling gives consumers confidence in the wine quality when moving along the hierarchy of more expensive brand. Marketing Changes Historically, Old World producers have not marketed their wines aggressively. They relied upon their reputation and tradition for attracting consumers. In France, middle priced wine has been offered to the market on the confidence of the AOC classification system. The cheaper

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