QUESTION 1

Australian wine industry: a triumph story since the beginning of this century, the conventional dominance of French wines in the UK had ended, with sales of Australian wine outstripping them for the first time. By then, Australian wines responsible for 19.5 per cent of UK wine sales in terms of value (up 25 per cent), with French wines demonstrating a steady decline. And for wines over £5.00, Australian wine had already overtaken French wines. In the prestigious 2000 wine sampling contest in London, the Australians had won rewards for three-quarters of the wines entered.

Though, many wine experts still regarded Australian wines as inferior to French wines. For instance, in some top London restaurants such as Le Gavroche, Australian wines were not served for the reason that they believed that customers preferred the quality of French wine over ‘something more that a chemist's blend'. Whilst French wine still tended to be errand for eating out, Australian wine was favoured for take-home drinkers - and 84 per cent of all wine sold in the UK was drunk at home.

The accomplishment of Australian wines with retailers was put down to several factors. The excellence was consistent, compared with French wines that could differ by year and location. Also, whilst the French had always highlighted the significance of the local area of origin of the wine within France, Australia had, in effect, ‘branded' the country as a wine section and then concentrated on the variety of grape - a Shiraz or a Chardonnay, for instance. This avoided the confusing particulars of the location of vineyards and the names of chateaux that many customers found difficult about French wines. Terry Davies, managing director (MD) of Beringer Blass, elucidated" ‘you can pronounce the name on the bottle on our wines,' the inference being that individuals often could not on a bottle of French wine.
Historically the European wine makers had also centred on their home markets. This was particularly the case in Italy, but French producers also tended to assume that buyers overseas would buy wine in much the same way as in France. This was changing on the other hand. French wine makers were becoming less insular. Caroline Guilby, a consultant to the industry, make clear that one well-known Chablis producer had spent time working in Chile, the US and Australia before taking up his current job. ‘Wine makers interested in quality will have traveled. That's quite a modification and it has started to happen only in the last five years.' Mike Paul of Destination Wine also considered that ‘there are signs that there could be a backlash from the old world as France and Italy get their take action together'.

Sources: become accustomed from Financial Times, 11 February and FT ¾ March 2006.

(a) Make out the reasons which might have accounted for the success of Australian wines?

(b) Which generic strategy has Australian wines favoured? Your respond must also include a conversation of the other four generic strategies.

(c) What would you recommend French wine producers to carry out to counter the Australian success?

QUESTION 2

Decisively discuss how a decision maker can identify the strategic factors in a corporation's external environment? Use a company of your choice to support your respond.

QUESTION 3

Companies often form strategic alliances or collaborative partnerships to set off their own strategic initiatives and build up their competitiveness. Such joint strategies go beyond traditional company-to-company dealings but still do not entail the formalities of a merger or joint venture. Converse the potential benefits of such alliances.

QUESTION 4

Confer the meaning of matching a strategy to a company's situation. Your answer must make reference to the following three situations: firms operating in

1) emerging industries,

2) turbulent environments and

3) maturing industry situations.