Internationalization of Penfolds Grange Shiraz in China, Japan and UK

This article discusses the internationalization of Penfolds Grange Shiraz in China, Japan and UK. It covers economic, political and legal factors, benefits of franchising, finance, forecast, recommendations and conclusion.

Running head: PRINCIPLES OF BUSINESS MANAGEMENT
PRINCIPLES OF BUSINESS MANAGEMNT
Name of the Student:
Name of the University:
Author Note:

1PRINCIPLES OF BUSINESS MANAGEMENT
Introduction:
The product that has been chosen by me as a subject to internationalise in three
nations, that includes China, Japan and UK includes the most exquisite Australian Wine
‘Grange Shiraz’ owned by the Treasury Wine Estates. Grange Shiraz has been reported to be
one of the most expensive wine ever and is made out of two exclusive kind of grapes which
encompasses the syrah grape and the Cabernet Sauvignon (Calkins 2017).
Economic Factors:
Statistical data obtained from research suggests that a major proportion of the three
countries belong to the higher economic group that makes their taste exclusive in terms of
alcoholic beverages (Duarte Alonso et al.2014). The import percentage of wine has increased
over 4.2%, and hence internationalising this sector would help in achieving a greater market
value (Duarte Alonso et al.2014).
Political Factors:
The political factors play a strict role in this sector in terms of introducing heavy duty
fee and other taxes that are imposed for the export and import of wine in China, Japan and
UK.
Legal Factors:
The legal factors of the three countries considered, constitute of flexible laws in terms
of acceptance of an international brand trying to enter the market.
Analysis of the existing scenario:
On the basis of the existing scenario, it can be observed that the wine sector is already
full of mediocre wine industries in the three countries which include, China, Japan and UK
and the introduction of an elite international brand would be best suitable with the help of a
franchise entry mode into the market.

2PRINCIPLES OF BUSINESS MANAGEMENT
Key benefits of franchising:
The method adopted to spread the business at an international level would include
franchising the elite wine company to UK, China and Japan. The benefits of franchising
include:
 It offers greater business networking
 Franchises often possess a greater profit rate than any start-up business
 Franchises already possess a reputed image and hence no extra effort is required to
create a brand image
 Brand endorsement through franchise is extremely cost-effective
Finance:
Shirz Grange has been ruling the wine industry for a tenure of about 65 years (Duarte
Alonso et al.2014). It has scored 100 points at the authentic American Wine Advocate and in
the year 2016 had released a blend of three royal shirz at a premium price of $3000 (Manser
2013) that has yielded a 31% profit value. (Manser 2013).
Forecast:
Therefore, Shiraz Grange can be identified as a luxury product which has the potential
to be marketed internationally and target a wider customer group because the demand of
exquisite wine is increasing both in traditional as well as in the emerging market sector
(Tsukrejev 2014).
Recommendations and Conclusion:
Penfolds Grange has been one of the most exclusive wine brands that has continued to
sustain in the market for as long as 20 years, however allowing franchise mode of entry into
the international market and by serving it in all international flights that connect the
mentioned three countries to Australia would help in obtaining a better brand value.

3PRINCIPLES OF BUSINESS MANAGEMENT
References:
Calkins, T., 2017. Penfolds. Kellogg School of Management Cases, pp.1-7.
Duarte Alonso, A., Bressan, A., O’Shea, M. and Krajsic, V., 2014. Exporting wine in
complex times: A study among small and medium wineries. Journal of Small Business and
Enterprise Development, 21(2), pp.345-364.
Manser, P., 2013. Wine review: Is grange still the benchmark?. Bulletin (Law Society of
South Australia), 35(9), p.15.
Tsukrejev, J., 2014. Marketing Strategy: Company X Entering the Australian Wine
Market,65(3),p.54