Market Entry Strategies Assignment - Treasury Wine Estates

   

Added on  2020-03-16

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MARKET ENTRY STRATEGIES
Market Entry Strategies Assignment - Treasury Wine Estates_1
Treasury Wine Estates (TWE) is an international winemaking and distribution companybased in Australia. Until a demerger in 2011, it was the wine segment of the global brewingbrand Foster’s Group. The company’s business is segregated into 4 global regions: New Zealandand Australia; Africa, Middle East and Asia; Europe; and The America. Before entry into anynew region or market, the company conducts a new market entry risk evaluation. Such analysisentails an assessment of the probability and implications of myriad risks, covering reputationaland legal risks, through which the threat of human trafficking or slavery might be taken intoaccounti. Treasury Wine Estates distributes its wines to a variety of clients across different regions,and it tailors its route-to-market framework by the nation to capitalize on regional opportunities.The organization is now planning to shore up its business in China and intends to openrestaurants, wine bars and outlets for entertainment. Such move from B2B to B2C could be riskybut is one route that companies seeking to enter China need to consider. Keen on capitalizing onthis opportunity, TWE is reexamining its conventional distribution framework and making thetransition to selling the products to its customers directly1. Another strategy used by TWE planning to enter other regional markets through itsbranded stores is that of market penetration and cost. It tries to be strategic in communicationactivities, brand development etc. to develop a powerful brand. Though TWE is normallyperceived as a low-cost winemaker, the company tries to position itself as a premium brand insome regions. However, when planning to enter China, for instance, this may be a trickyproposition. For a market in China that has a high-end consumer class, several organizations aremoving toward premium positioning. Usually, it is a decent strategy, because it can yield highmargins. Nonetheless, some customers typify TWE as a low-cost brand in its domesticmarketplace2. Hence, there could be a risk that customers of premium products becomeeventually discerning and knowledgeable to be exposed to foreign products and brands. 1Cole, Brett. “Treasury Wine Estates to Buy U.S. and British Brands From Diageo.” The NewYork Times, 13 October 2015, https://www.nytimes.com/2015/10/14/business/dealbook/treasury-wine-estates-to-buy-us-and-british-brands-from-diageo.html.2Perdue, Lewis. “Treasury Wine Estates & other Oz vintners boosted by Australia/China FreeTrade Agreement”. Live Oak Bank, 24 January 2017, http://wineindustryinsight.com/?p=77923.
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