Spanish Vines Colombian Market Entry
47 Pages16686 Words52 Views
Added on 2019-12-03
Spanish Vines Colombian Market Entry
Added on 2019-12-03
ShareRelated Documents
SPANISH VINES
EXECUTIVE SUMMARY
In 2011, worldwide wine revenues were $61 billion and its industry was at a mature
stage. It was representing signs of transitioning into the decline stage of its life cycle. The overall
revenue of the wine industry began to decline and had slow down the economy which is in a
direct relation with the wine industry. The main issue for small wineries and new entrants in the
market is to find out retail outlets with the help of which they would offer brand in the market.
Moreover, in the wine, beer and spirits industry retail channels were classified on as trade versus
off trade. On the other hand, the Colombian economy was growing at faster pace which is
directly beneficial for the entire wine industry. Due to this basic reason the entire country has
been cited as one of the most attractive emerging market.
Main drivers of the Colombian economy involve Coffee bean production, dairy products
manufacturing and ready to eat products for consumers. Around 38% of the Colombian
households were determined as affluent and 38% were middle class. The entire market of
Colombia is dominated by beer along with distilled spirits. The main problem linked with the
present study is to know whether Columbian market is feasible for Spanish Vines or not. Large
number of factors is present which may prevent company from entering into the Columbian
market which needs to be known well in advance.
Different models were undertaken for accomplishing aim of the study which are
international business, strategic management, marketing management etc. The main aim behind
carrying out this study is “To analyze the feasibility of the Colombian market for Spanish
Vines”. Spanish Vines owned its brand where overall operations are carried out with local
Spanish producers and it was bottled at Spanish vineyards with labels owned and controlled by
Spanish Vines. The entire alcoholic beverage distribution in the US market differs from a state to
another; the reason is because rules and regulations in each state were unique.
After applying different models it has been identified that market condition of Columbia
is favorable and through this it is possible for business to grab large number of opportunities
which are being present in the market. Further, applicability of marketing model such as STP has
shown that by adopting effective marketing strategy it is possible for enterprise to attract large
number of customers in the market. Moreover, the models of international business applied has
supported in understanding about companies can easily operate at global level where ample of
opportunities exist and it assist enterprise in dealing with challenges present in the business
In 2011, worldwide wine revenues were $61 billion and its industry was at a mature
stage. It was representing signs of transitioning into the decline stage of its life cycle. The overall
revenue of the wine industry began to decline and had slow down the economy which is in a
direct relation with the wine industry. The main issue for small wineries and new entrants in the
market is to find out retail outlets with the help of which they would offer brand in the market.
Moreover, in the wine, beer and spirits industry retail channels were classified on as trade versus
off trade. On the other hand, the Colombian economy was growing at faster pace which is
directly beneficial for the entire wine industry. Due to this basic reason the entire country has
been cited as one of the most attractive emerging market.
Main drivers of the Colombian economy involve Coffee bean production, dairy products
manufacturing and ready to eat products for consumers. Around 38% of the Colombian
households were determined as affluent and 38% were middle class. The entire market of
Colombia is dominated by beer along with distilled spirits. The main problem linked with the
present study is to know whether Columbian market is feasible for Spanish Vines or not. Large
number of factors is present which may prevent company from entering into the Columbian
market which needs to be known well in advance.
Different models were undertaken for accomplishing aim of the study which are
international business, strategic management, marketing management etc. The main aim behind
carrying out this study is “To analyze the feasibility of the Colombian market for Spanish
Vines”. Spanish Vines owned its brand where overall operations are carried out with local
Spanish producers and it was bottled at Spanish vineyards with labels owned and controlled by
Spanish Vines. The entire alcoholic beverage distribution in the US market differs from a state to
another; the reason is because rules and regulations in each state were unique.
After applying different models it has been identified that market condition of Columbia
is favorable and through this it is possible for business to grab large number of opportunities
which are being present in the market. Further, applicability of marketing model such as STP has
shown that by adopting effective marketing strategy it is possible for enterprise to attract large
number of customers in the market. Moreover, the models of international business applied has
supported in understanding about companies can easily operate at global level where ample of
opportunities exist and it assist enterprise in dealing with challenges present in the business
environment.. Apart from this, one of the most appropriate entry modes for Spanish vines is
manufacturing aboard where business can manufacture its own vine in the market of Columbia
and through this it is possible to serve large number of customers as per their expectations in the
market. Further, the 7P’s model has supported in understanding about the key elements such as
price, promotion, place etc through which business can better serve its target market
manufacturing aboard where business can manufacture its own vine in the market of Columbia
and through this it is possible to serve large number of customers as per their expectations in the
market. Further, the 7P’s model has supported in understanding about the key elements such as
price, promotion, place etc through which business can better serve its target market
TABLE OF CONTENTS
CHAPTER ONE..............................................................................................................................1
Introduction..................................................................................................................................1
Case Background.........................................................................................................................1
Research Problems.......................................................................................................................2
CHAPTER 2: CASE BRIEF...........................................................................................................5
2.1 Spanish vines background.....................................................................................................5
2.2 Spanish vines current condition.............................................................................................6
2.3 Analysis of the Columbian market........................................................................................8
CHAPTER 3: PROBLEM STATEMENT....................................................................................10
3.1 Key problems.......................................................................................................................10
3.2 Plan of analysis....................................................................................................................11
3.2.2 Strategic management.......................................................................................................14
3.2.4 Organizational behavior....................................................................................................17
3.3 Research methodology.........................................................................................................18
CHAPTER 4: ANALYSIS AND FINDINGS...............................................................................20
4.1 Brief introduction.................................................................................................................20
4.2 International business..........................................................................................................20
4.2.1 Analysis of Heckscher-ohlin model..................................................................................20
4.2.2 Analysis of Richardian model of international trade.......................................................21
4.2.3 Analysis of GreetHofsteid model.....................................................................................21
4.2.4 Analysis of International entry model..............................................................................22
4.3 Strategic management..........................................................................................................22
4.3.1 PEST Analysis..................................................................................................................22
4.4 marketing management........................................................................................................23
4.4.1 Analysis of 7 P’s of marketing........................................................................................23
4.4.2 Analysis of STP model....................................................................................................24
4.5 Organizational behavior......................................................................................................25
4.5.1 Analysis of Mintzberg management roles........................................................................25
4.5.2 Analysis of McKinsey 7s model......................................................................................25
4.6 conclusion............................................................................................................................26
CHAPTER 5: PROPOSED SOLUTION TO THE PROBLEM....................................................27
5.1 International business..........................................................................................................27
5.1.1 To identify range of factors affecting business performance at global level....................27
CHAPTER ONE..............................................................................................................................1
Introduction..................................................................................................................................1
Case Background.........................................................................................................................1
Research Problems.......................................................................................................................2
CHAPTER 2: CASE BRIEF...........................................................................................................5
2.1 Spanish vines background.....................................................................................................5
2.2 Spanish vines current condition.............................................................................................6
2.3 Analysis of the Columbian market........................................................................................8
CHAPTER 3: PROBLEM STATEMENT....................................................................................10
3.1 Key problems.......................................................................................................................10
3.2 Plan of analysis....................................................................................................................11
3.2.2 Strategic management.......................................................................................................14
3.2.4 Organizational behavior....................................................................................................17
3.3 Research methodology.........................................................................................................18
CHAPTER 4: ANALYSIS AND FINDINGS...............................................................................20
4.1 Brief introduction.................................................................................................................20
4.2 International business..........................................................................................................20
4.2.1 Analysis of Heckscher-ohlin model..................................................................................20
4.2.2 Analysis of Richardian model of international trade.......................................................21
4.2.3 Analysis of GreetHofsteid model.....................................................................................21
4.2.4 Analysis of International entry model..............................................................................22
4.3 Strategic management..........................................................................................................22
4.3.1 PEST Analysis..................................................................................................................22
4.4 marketing management........................................................................................................23
4.4.1 Analysis of 7 P’s of marketing........................................................................................23
4.4.2 Analysis of STP model....................................................................................................24
4.5 Organizational behavior......................................................................................................25
4.5.1 Analysis of Mintzberg management roles........................................................................25
4.5.2 Analysis of McKinsey 7s model......................................................................................25
4.6 conclusion............................................................................................................................26
CHAPTER 5: PROPOSED SOLUTION TO THE PROBLEM....................................................27
5.1 International business..........................................................................................................27
5.1.1 To identify range of factors affecting business performance at global level....................27
5.2 Strategic management..........................................................................................................28
5.2.1 Main issue is to know consumer attitude..........................................................................28
5.3 Marketing management.......................................................................................................29
5.3.1 Main challenge is to develop effective marketing strategies for Columbian market.......29
5.4 Organizational behavior.......................................................................................................31
5.4.1 Main issue is to decide effective internal structure of firm..............................................31
CHAPTER 6: APPLICATION OF LEARNING TO ANOTHER COMPANY...........................32
6.1 Introduction..........................................................................................................................32
6.2 Company background..........................................................................................................32
6.3 Problems of the company....................................................................................................33
6.3.1 International business.......................................................................................................33
6.3.2 Marketing management....................................................................................................33
6.3.3 Strategy management........................................................................................................33
6.3.4 Organizational behavior....................................................................................................34
6.4 Problem analysis..................................................................................................................34
6.4.1 International business.......................................................................................................34
6.4.2 Marketing management....................................................................................................35
6.4.3 Strategy management........................................................................................................35
6.4.4 Organizational behavior....................................................................................................36
6.5 Solution and recommendation.............................................................................................37
6.5.1 International business.......................................................................................................37
6.5.2 Marketing management....................................................................................................37
6.5.3 Strategy management........................................................................................................37
6.5.4 Organizational behavior....................................................................................................38
6.5 Conclusion...........................................................................................................................38
LIST OF TABLES
Figure 1: Evolution of global wine industry....................................................................................5
Figure 2: Spanish vines sales...........................................................................................................6
Figure 3: Spanish vines competitive value matrix...........................................................................7
Figure 4: Global wine production by country..................................................................................8
Figure 5: Number of Bars in Columbia...........................................................................................9
5.2.1 Main issue is to know consumer attitude..........................................................................28
5.3 Marketing management.......................................................................................................29
5.3.1 Main challenge is to develop effective marketing strategies for Columbian market.......29
5.4 Organizational behavior.......................................................................................................31
5.4.1 Main issue is to decide effective internal structure of firm..............................................31
CHAPTER 6: APPLICATION OF LEARNING TO ANOTHER COMPANY...........................32
6.1 Introduction..........................................................................................................................32
6.2 Company background..........................................................................................................32
6.3 Problems of the company....................................................................................................33
6.3.1 International business.......................................................................................................33
6.3.2 Marketing management....................................................................................................33
6.3.3 Strategy management........................................................................................................33
6.3.4 Organizational behavior....................................................................................................34
6.4 Problem analysis..................................................................................................................34
6.4.1 International business.......................................................................................................34
6.4.2 Marketing management....................................................................................................35
6.4.3 Strategy management........................................................................................................35
6.4.4 Organizational behavior....................................................................................................36
6.5 Solution and recommendation.............................................................................................37
6.5.1 International business.......................................................................................................37
6.5.2 Marketing management....................................................................................................37
6.5.3 Strategy management........................................................................................................37
6.5.4 Organizational behavior....................................................................................................38
6.5 Conclusion...........................................................................................................................38
LIST OF TABLES
Figure 1: Evolution of global wine industry....................................................................................5
Figure 2: Spanish vines sales...........................................................................................................6
Figure 3: Spanish vines competitive value matrix...........................................................................7
Figure 4: Global wine production by country..................................................................................8
Figure 5: Number of Bars in Columbia...........................................................................................9
CHAPTER ONE
Introduction
The present case is linked with Spanish Vines who’s CEO and founder is Josh Hackler.
For over six year founder of Spanish vine has applied larger efforts in expanding the product line
and distribution of Spanish wines in the competitive US market. Due to the introduction of a
unique concept and idea, Josh Hackler, the founder of Spanish Vines was awarded as Top 5 of
the best entrepreneurs under the age of 25 in the USA. Spanish vines became popular in short
period of time and sales growth was also high. After the initial phase of product line growth
which involves both partner wines and house the company shifted its emphasis to house brands
over which it has more control. In 2006, Spanish Vine received silver medal where the overall
brand portfolio ranged in price from $8 to $30 per bottles.
This case study will perform a precise analyse of the challenges faced by Spanish Vines
when deciding to enter the Colombian market. With the effectiveness of its marketing program
in the USA, this consisted on targeting the US generation X along with millennial consumers
who generally prefer to consume high quality wines (Alonso and et. al., 2014); Spanish Vines
saw the easy opportunity present on the Colombian market to sell its products. Even though,
Argentinean and Chilean wines were already anchored on the local market, the opportunity was
linked with the absence of success of the European wines due to the high taxes added and
consequently the high prices of the product. However, albeit the Chilean and Argentinean wines
were offered with low prices, the quality was also low. As a result, this was the key advantage
which can be gained, by selling high quality and value Spanish wines in the Colombian market at
competitive prices.
Case Background
In 2011, worldwide wine revenues were $61 billion and its industry was at a mature
stage. It was representing signs of transitioning into the decline stage of its life cycle. The overall
revenue of the wine industry began to decline and had slow down the economy which is in a
direct relation with the wine industry. Moreover, consumer acceptance of products has grown at
faster pace due to alteration in taste, lower prices and increase in consumer knowledge regarding
wine. Generally, European Union countries, for instance Italy, Spain and France are the major
producers of wine and they were regarded as the old world in the wine industry by their position
of the largest wine exporting nations, whose share was respectively, 21%, 17% and 17%.
1
Introduction
The present case is linked with Spanish Vines who’s CEO and founder is Josh Hackler.
For over six year founder of Spanish vine has applied larger efforts in expanding the product line
and distribution of Spanish wines in the competitive US market. Due to the introduction of a
unique concept and idea, Josh Hackler, the founder of Spanish Vines was awarded as Top 5 of
the best entrepreneurs under the age of 25 in the USA. Spanish vines became popular in short
period of time and sales growth was also high. After the initial phase of product line growth
which involves both partner wines and house the company shifted its emphasis to house brands
over which it has more control. In 2006, Spanish Vine received silver medal where the overall
brand portfolio ranged in price from $8 to $30 per bottles.
This case study will perform a precise analyse of the challenges faced by Spanish Vines
when deciding to enter the Colombian market. With the effectiveness of its marketing program
in the USA, this consisted on targeting the US generation X along with millennial consumers
who generally prefer to consume high quality wines (Alonso and et. al., 2014); Spanish Vines
saw the easy opportunity present on the Colombian market to sell its products. Even though,
Argentinean and Chilean wines were already anchored on the local market, the opportunity was
linked with the absence of success of the European wines due to the high taxes added and
consequently the high prices of the product. However, albeit the Chilean and Argentinean wines
were offered with low prices, the quality was also low. As a result, this was the key advantage
which can be gained, by selling high quality and value Spanish wines in the Colombian market at
competitive prices.
Case Background
In 2011, worldwide wine revenues were $61 billion and its industry was at a mature
stage. It was representing signs of transitioning into the decline stage of its life cycle. The overall
revenue of the wine industry began to decline and had slow down the economy which is in a
direct relation with the wine industry. Moreover, consumer acceptance of products has grown at
faster pace due to alteration in taste, lower prices and increase in consumer knowledge regarding
wine. Generally, European Union countries, for instance Italy, Spain and France are the major
producers of wine and they were regarded as the old world in the wine industry by their position
of the largest wine exporting nations, whose share was respectively, 21%, 17% and 17%.
1
Throughout the world wine consumption rates were decreasing rapidly. In many non producing
nations wined industry started to grow where people have started to shift from alcoholic
beverages to wine, competition level is rising at faster pace but it depends from every country.
The largest global producers are Treasury wine Estates limited and E & J Gallo winery where
every enterprise has market share of less than 5%. Like other competitors firms are offering
many other types of wine with different brand name and labels (Thach and Cuellar, 2007).
The main issue for small wineries and new entrants in the market is to find out retail
outlets with the help of which they would offer brand in the market. Moreover, in the wine, beer
and spirits industry retail channels were classified on as trade versus off trade. The key
distinction between the two types of channel is that whether the beverage was consumed where it
was purchased or not. In the past, around 20 to 25% VAT was charged on imported wines and
this directly increased the cost of imported goods. Due to rise in level of duty Spanish and other
EU wines were uncompetitive in Columbia. Additionally, in 2012 free trade agreement took
place between European Union and Colombia and Peru which directly eliminated VAT for
different commodities, including wine.
On the other hand, the Colombian economy was growing at faster pace which is directly
beneficial for the entire wine industry. Due to this basic reason the entire country has been cited
as one of the most attractive emerging market. Main drivers of the Colombian economy involve
Coffee bean production, dairy products manufacturing and ready to eat products for consumers.
Around 38% of the Colombian households were determined as affluent and 38% were middle
class. The entire market of Colombia is dominated by beer along with distilled spirits (Alonso,
2015).
Research Problems
Subsequent to the case background, the main problem linked with the present study is to
know whether Columbian market is feasible for Spanish Vines or not. Large number of factors is
present which may prevent company from entering into the Columbian market which needs to be
known well in advance. Apart from this some favourable factors are also present which may
encourage company to operate successfully.
International Business:
2
nations wined industry started to grow where people have started to shift from alcoholic
beverages to wine, competition level is rising at faster pace but it depends from every country.
The largest global producers are Treasury wine Estates limited and E & J Gallo winery where
every enterprise has market share of less than 5%. Like other competitors firms are offering
many other types of wine with different brand name and labels (Thach and Cuellar, 2007).
The main issue for small wineries and new entrants in the market is to find out retail
outlets with the help of which they would offer brand in the market. Moreover, in the wine, beer
and spirits industry retail channels were classified on as trade versus off trade. The key
distinction between the two types of channel is that whether the beverage was consumed where it
was purchased or not. In the past, around 20 to 25% VAT was charged on imported wines and
this directly increased the cost of imported goods. Due to rise in level of duty Spanish and other
EU wines were uncompetitive in Columbia. Additionally, in 2012 free trade agreement took
place between European Union and Colombia and Peru which directly eliminated VAT for
different commodities, including wine.
On the other hand, the Colombian economy was growing at faster pace which is directly
beneficial for the entire wine industry. Due to this basic reason the entire country has been cited
as one of the most attractive emerging market. Main drivers of the Colombian economy involve
Coffee bean production, dairy products manufacturing and ready to eat products for consumers.
Around 38% of the Colombian households were determined as affluent and 38% were middle
class. The entire market of Colombia is dominated by beer along with distilled spirits (Alonso,
2015).
Research Problems
Subsequent to the case background, the main problem linked with the present study is to
know whether Columbian market is feasible for Spanish Vines or not. Large number of factors is
present which may prevent company from entering into the Columbian market which needs to be
known well in advance. Apart from this some favourable factors are also present which may
encourage company to operate successfully.
International Business:
2
It is not as easy for any company to enter any new market, as a large number of
challenges are present and Spanish Vines cannot escape this rule, this is why it has to deal with it
and face an established competition.
Strategic Management
One of the biggest challenges is consumer attitude as it varies from one individual to
another. Income, demographics, health consideration and overall lifestyle of target market affects
decision taken by consumers.
Marketing Management
Argentinean and Chilean wines were already offered in the market of Colombian with
low prices. However, the quality was also low. The challenge is to offer another type of wine
whose quality is very high by competing with the existing low prices.
Research Questions
International Business
What are the challenges faced by Spanish Vines in order to enter the Columbian market?
What are the factors which lead to expansion in Columbian market?
Strategic Management
What is the accurate strategy to enter the Colombian market and meet the needs of its
consumers and made them move from a satisfying product to Spanish Vines product?
Marketing Management
It is all about, segmentation targeting and positioning in the market. How Spanish Vines
will promote their products and visible in a tough industry?
Aim and Objectives of the Study
The main aim behind carrying out this study is “To analyse the feasibility of the
Colombian market for Spanish Vines”. Spanish Vines owned its brand where overall operations
are carried out with local Spanish producers and it was bottled at Spanish vineyards with labels
owned and controlled by Spanish Vines. The entire alcoholic beverage distribution in the US
market differs from a state to another; the reason is because rules and regulations in each state
were unique.
International business
To understand the challenges faced by a company when entering a new market and
identify the factors which lead to expansion in a market
3
challenges are present and Spanish Vines cannot escape this rule, this is why it has to deal with it
and face an established competition.
Strategic Management
One of the biggest challenges is consumer attitude as it varies from one individual to
another. Income, demographics, health consideration and overall lifestyle of target market affects
decision taken by consumers.
Marketing Management
Argentinean and Chilean wines were already offered in the market of Colombian with
low prices. However, the quality was also low. The challenge is to offer another type of wine
whose quality is very high by competing with the existing low prices.
Research Questions
International Business
What are the challenges faced by Spanish Vines in order to enter the Columbian market?
What are the factors which lead to expansion in Columbian market?
Strategic Management
What is the accurate strategy to enter the Colombian market and meet the needs of its
consumers and made them move from a satisfying product to Spanish Vines product?
Marketing Management
It is all about, segmentation targeting and positioning in the market. How Spanish Vines
will promote their products and visible in a tough industry?
Aim and Objectives of the Study
The main aim behind carrying out this study is “To analyse the feasibility of the
Colombian market for Spanish Vines”. Spanish Vines owned its brand where overall operations
are carried out with local Spanish producers and it was bottled at Spanish vineyards with labels
owned and controlled by Spanish Vines. The entire alcoholic beverage distribution in the US
market differs from a state to another; the reason is because rules and regulations in each state
were unique.
International business
To understand the challenges faced by a company when entering a new market and
identify the factors which lead to expansion in a market
3
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Case Study on Spanish wineslg...
|7
|1612
|248
Impact of Craft Beer and Spirits on Wine Sales in Hospitalitylg...
|7
|3520
|56
Career Research Report on Modeling in the Fashion Industrylg...
|8
|2077
|53
Entrepreneurship: JK Rowling as an Entrepreneurlg...
|10
|2841
|46
Crises Facing by the British Steel Industry | Reportlg...
|10
|3642
|49