Robert Mondavi Case

Introduction

Mondavi is a winery worth $600 million, established in 1966 with operations majorly in the California region. It is a public company with a 50% stake controlled by the Mondavi family. Its main focus has always been in premium wine and has 16 different wine brands through company owned wineries and partnership businesses. The company has over the years gained reputation of being one of the world's finest and innovative winemakers and have introduced several technological enhancements which became trends in the wine industry. As mentioned in the case, that premium wine sales have grown 8-10% and that demand has increased for premium wines, while consumption of inexpensive, lower-quality wine has been declining. This means that not only is this category increasing in demand among consumers, but also that consumers are and expected to continue to be, willing to pay higher prices for wines of better quality. However, there are industry and market threats that must be considered, such as the economic decline as observed in 2002 and the larger competition growth in the wine industry, with more and more rivals entering the premium wine business. These factors have already affected the company with decline in wine sales. Though the company has undertaken different types of partnerships, acquisitions and mergers, it has now decided to grow organically, rather than through mergers & acquisitions, and position itself as a US luxury premium winery. This strategy is hoped to counteract the negative decline in sales and growth in competition that Mondavi has experienced.

Internal Analysis

Mondavi has been at the forefront of technology of winemaking and has been successful as a niche market player through innovative and technological advancements, resulting in 16 differentiated products that have been uniquely marketed and priced in order to continue increasing their product line and market share. They maintain the quality of their product by governing the quality of the grapes they use. Cost involved in making premium wine is a concern since they can vary based on several external factors (economy, climate etc). Also the analysis of their sales both domestic and international show us that while there domestic sales over the last few months has decreased, there international sales have increased, showing us that Mondavi's internal management has not responded to the growing competition in the domestic market. Another growing concern as mentioned in the case is that Mondavi was experiencing involved the sales force not being put being allocated to tasks in an effective manner. However, Factors such as their established brand recognition, effective know-how about the product and personalized marketing, partnerships and joint ventures with key players globally, give Mondavi a unique edge in the market.

External Analysis

Identifying

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