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Paper On Study Of Wine Industry Of Turkey

   

Added on  2019-09-30

25 Pages4422 Words258 Views
WINE INDUSTRY OF TURKEYNameSubmitted toDate

Table of Contents1.Introduction..............................................................................................................................3Part 1: Extended Version of Porter’s National Diamond................................................................5A.Factor conditions...............................................................................................................6B.Demand Conditions...........................................................................................................8C. Related and Supporting Industries........................................................................................10D.Firm Strategy, Rivalry.....................................................................................................12E. Role of Government..............................................................................................................13F. Role of Chance......................................................................................................................14Part 2: FDI.....................................................................................................................................15Advantages of FDI as Mode of Entry........................................................................................16Disadvantages of FDI as Mode of Entry...................................................................................17Market entry strategy for Turkish Industry...............................................................................21Part 3: Management issues............................................................................................................221.Corruption and High Tax....................................................................................................222.Lack of skilled labour.........................................................................................................232.References..............................................................................................................................24

1.IntroductionTurkey is a fast growing country with the fifth largest vineyard area in the world after France, Spain, Italy and China. The Caucasus region is seen to play a pivotal role in the wine making andits history and is considered as the world’s earliest wine-producing regions. The Turkish industrypresents a plethora of cheap and high quality imported wines as it enjoys the best climate for viticulture. Initially the process of viticulture was aimed towards table grapes and gradually the focus shifted to the winemaking. From 2003 to 2012, the number of registered producers of “fermented alcoholic beverages” have increased from 47 to whooping 157 and the total wine production increased from 287,000 litres to 20,906,762 litres from 2005 to 2009 (THE DARK MARKET OF TURKEY, 2016).In spite of such advantages, the Turkish wine industry is not developed yet and cannot entirely be associated with the winemaking area and neither be called a wine country. The paper aims to study the wine industry of Turkey and to critically analyse the industry using various theoretical models and frameworks along with outlining the viability of operating and investing in the

Turkish Wine industry. Further the export value of wine has seen an inclination from 2010 to 2010 from 7.36 million dollars to 8.75 million dollars in 2011 (WINE SECTOR IN TURKEY, 2014).

Part 1: Extended Version of Porter’s National Diamond Porter’s Diamond Negative pointsPositive pointsFactor conditionsWorkforce shortageSeasonal labourMigration among labour from rural to urban lack of qualified technical winery personnelHighly skilled workforceAbundance of raw materialsLarge vineyardFavourable climate80 varieties of wine producedDemand conditionsSteady growth ininternational marketsLess aggressive market interms of competitionLow purchasing power ofconsumers.Growth in local marketLocal market sizeIncreased interest in wines and vintage winesRelated and supportingindustriesHigh demand of HORECAHotel, restaurants and Catering industry (HORECA)Suppliers of packaging material,Chain storesCollaboration with scientific research institutions in R&D,Increased demand for table grapesFirm strategy andrivalryInformation flow to peopleusing websitesProduction of affordablehigh quality productsExpenditure on R&D,Continuous innovation,Affordable high quality productsRole of governmentLack of governmental

attention to viticultureLack of state policyregarding the sectorLack of coordinationbetween the governmentaland civic institutionsHigh special consumptiontax (SCT) Development of a ‘Vineyards ofThrace Route’ with the support of alocal government agency along withBulgaria and GreeceRole of chanceExchange rate movementsand the slowdown in theeconomySurges in global marketA.Factor conditionsTurkey has a strong and rich resource base which supports its wine industry. With one of the largest vineyard in the world, there is an abundance of raw material in the country for wine industry. The fertile geographical area for the production of grapes has presented Turkey with a rooted vinery culture. There are around 1100 types of grape being produced in Turkey with only selected 34 varieties being used for wine production (Azabagaoglu, M.O., Akyol, A. and Ozay, A., 2006).Due to large abundance of raw materials and favourable climate, the 1/3 of the entire grape production is used for preparation of wine. The table given below presents the overall area under vines from 2000 to 2013 along with depicting the decrease or increase in area (THE DARK MARKET OF TURKEY, 2016)

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