Strategic Analysis of E&J Gallo Winery

Assignments on Wine Company
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Table of content
Introduction...................................................................................................................................... 3
Micro and macro environmental factors..............................................................................3
Company’s competitive advantages over its revelries...................................................6
Generic strategy of Porters.........................................................................................................7
Company’s growth strategy.......................................................................................................9
Strategic recommendation.........................................................................................................9
Conclusion..........................................................................................................................................9
Reference list................................................................................................................................. 10
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Introduction
Here in this assignment, the chosen industry is winery and distributors. The chosen company is
E&J Gallo Winery. It has been founded in 1933 and headquartered in California. This is the
largest wine producing and distributing company. The founders are two brothers named Ernest
and Julio. They sell the most of wine brands about $4 to $5 per bottle. The famous brands are
Brut, Cold Duck, flavored California Champagne et cetera. After the death of the two brothers,
other family members involved to the company to continue the company successfully. From the
beginning, they were passionate about wine and selling the wine for every occasion. Today they
are known as leading global wine producers.The company takes special care on theart of grape
growing for wine and spirits to make the wine perfect. The distribution of alcoholic beverages is
spread over 90 countries around the globe. Gallo Winery is committed to provide its customers
with the best kind of wine available in market (Balland and Mariani, 2017). Contribution to long
term success, the integrity and courtesy for keeping the position of the company in order to
innovate new ideas to satisfy the higher products and services to satisfy the brad name of
company.
Micro and macro environmental factors
The micro environmental factors of the company include the company’s suppliers, marketing
team, competitors, publishers and customers to affect the relationship of values and satisfaction
with customers. Additionally, macro environmental factors include the company’s effects and
success including SWOT and PEST analysis.
PEST analysis
Political:
Political dimension of E&J Gallo Winery is amongst the top producers in world. The individual
state has restriction over the regulation of usual flavor of improvement to approve the retailers
and wholesalers (Roberts et al.2017). As it is approved through the regulation to the network of
trade open to control, the industry has monopoly of various states with control of retailing the
alcoholic beverages. It controls the subjects for subjecting the taxes with impacts of alcoholic
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beverages. Variousstates of different countries have different policies related to the selling of
alcoholic beverages which affects the customers of those products.
Economic:
Economic elements of PESTwill be contributed to generate the appreciation of E&J Winery to
describe. Duties and taxes can be operated to comply with the $100 billion annual revenue.
Taxes on alcohol is significant to maintain the upgradation process of the wine industry in that
particular state. The effects can help the company to increase the final products to create the
significant demands on the products’ price. The drive is anticipated with the slow rate to increase
the revenue next year (Ruijssenaarset al.2017).
Social:
Wine knowledge is considered as the part of education for wealthy family of the community. As
wine is alcoholic product, producers try to launch it to facilitate an increased level of
promotionfor wine. However, customers belonging from a certain age group prefers different
kind of wine based on the cost-income ratio of the customer. The customers belonging from the
new generation tends to try out new and different kinds of wine. Although, the older customers
are prone to a particular brand which they have been consuming for years.Younger generation is
attracted to premium wine collections, the older generation also fancies the same. In accordance
to the rate of consumption of wine among various classes, communities and generations, it can
be assessed that social aspect of a wine industry is depending upon a number of different factors
which are interrelated as well. With the wine consumption,there is voluntary emphasis on the
higher standard enjoyment of the meal.
Technological:
There are recent advancements on the technological factors related to the wine industry. The
processing has become advanced with the launch of steel containers to carefully maintain the
balance of temperaturein order to control the process of fermentation.Quality control and
temperature control are part of the innovation andare being processed in a way so that the
revolutionary processes can be improved.Grape temperature and harvesting along with the field
crushing temperature for separating juice from grapes, are considered to make the process faster.
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