QUESTION 1

Australian wine industry: a success story

Since the beginning of this century, the traditional dominance of French wines in the UK had ended, with sales of Australian wine outstripping them for the first time. By then, Australian wines accounted for 19.5 per cent of UK wine sales in terms of value (up 25 per cent), with French wines showing 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 awards for three-quarters of the wines entered.

However, many wine experts still regarded Australian wines as inferior to French wines. For example, in some top London restaurants such as Le Gavroche, Australian wines were not served because 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 favoured 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 success of Australian wines with retailers was put down to several factors. The quality was consistent, compared with French wines that could differ by year and location. Also, whilst the French had always highlighted the importance of the local area of origin of the wine within France, Australia had, in effect, ‘branded' the country as a wine region and then concentrated on the variety of grape - a Shiraz or a Chardonnay, for example. This avoided the confusing details of the location of vineyards and the names of chateaux that many customers found difficult about French wines. Terry Davies, managing director of Beringer Blass, explained" ‘youcan pronounce the name on the bottle on our wines,' the inference being that people often could not on a bottle of French wine.

Historically the European wine makers had also focused on their home markets. This was particularly the case in Italy, but French producers also tended to assume that consumers overseas would buy wine in much the same way as in France. This was changing, however. French wine makers were becoming less insular. Caroline Guilby, a consultant to the industry, explained that one well-known Chablis producer had spent time working in Chile, the US and Australia before taking up his present job. ‘Wine makers interested in quality will have traveled. That's quite a change and it has started to happen only in the last five years.' Mike Paul of Destination Wine also believed that ‘there are signs that there could be a backlash from the old world as France and Italy get their act together'.

Answer the following questions

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

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

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

QUESTION 2

Critically 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 answer

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 imply the formalities of a merger or joint venture. Discuss the potential benefits of such alliances

QUESTION 4

Discuss the importance 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