Chateau Margaux: Internal and External Strategic Analysis

This case study analyzes the strategic management of Chateau Margaux, a prominent wine producer. It begins with an introduction to strategic management and the importance of adapting to market changes, especially in the face of globalization and competition. The internal analysis evaluates Chateau Margaux's strengths and weaknesses using resource and capability analysis, highlighting its strong brand image, historical background, and core competencies, while also identifying threats such as price escalation and uneven human resources. The external analysis employs a SWOT framework to assess opportunities like market expansion and new distribution channels, as well as threats from new wine producers and shifting consumer preferences. The study also examines the wine industry's structure, the impact of globalization and climate change, and Chateau Margaux's competitive position. Finally, it discusses strategic options for Chateau Margaux, including marketing mix strategies and expansion into new markets, emphasizing the need to maintain its brand image while adapting to modern distribution channels to sustain competitiveness. The case study concludes that Chateau Margaux can succeed by effectively utilizing opportunities and adapting to market dynamics.

Strategic
Management

Introduction
• Strategic management is a continues process which require planning,
monitoring, and analysing so that organisation can meet out its goals and
objectives for future. In the present presentation, Chateau Margaux is
undertaken which is one of the biggest wine producer in world. For
remaining at same position, organization focuses to follow some strategies
in market because now-a-days many competitors are present in external
and internal market (Hill, Jones, and Schilling, 2014). Therefore, company
has started following marketing mix strategies to become successful and
sustain in market for longer period. Strategies that are used by enterprise
are 4 P's of marketing I.e. product, price, place, and promotion to earn
maximum profit.

Continued
• Threats for traditional wine making countries are increasing due to
globalisation. In this presentation, it has been identified that
enterprise focuses on quality and taste of product because if taste
changes than that product will not run in market in the future.
Industry have to analysis determinants and market size to reduce in
global warming. Organisation have to analysis demand market so
that there sale can increase (Thompson, and Martin, 2010). With
help of strategic tool organisation can identify proper areas and
proper situation for selling their product.

Cont.
• Conducting an assessment on internal strength and
weakness of organization which may include basic
resources and competencies typically provide a clear
portrait of competitive edge of organization in respective
market. As opined by Hill and Jones (2009) conducting
resource analysis is best to perform internal analysis of
organization by considering its core competencies,
resources, tangible and intangible properties etc.

Task 1: Internal analysis
• Chateau Margaux provides various opportunities to their stakeholder so
that it could benefit them in order to run the operations effectively. Main
competitors of firm are China, Japan and Eastern countries. In the study
both external analysis and internal analysis has been carried out. They
provide clear competencies and portrait of competitive edges of entity in
respective market. In internal analysis, organisation consider from different
viewpoints i.e. from tangible and intangible and also indicates capabilities
of business. By this they will find core competencies and resources for
organisation. Industry analysis has also affected on sale of their wine
product therefore company diversify their product range in relation with
price and quality.

Internal analysis of Chateau Margaux using resource
analysis

Continued

Continued

Capability analysis
Capabilities Key indicators
Corporate  Large number of exporters
 Good strategic control
 Distributors
R&D  Frequent innovations
 Introduced new flavours
 Extensive market research
Marketing  strong marketing initiatives in China
 Strong distribution channel
Sales and fulfilment  Maintains strong global sales force
 Enhanced sales

Capability Analysis – Contd.
• From the internal analysis of Chateau Margaux, it can be identified
that, the splendid wine producer has strong historical background of wine
making and have solid core competencies in its both tangible and intangibles
areas. The internal analysis of Chateau Margaux reveals that the sales of wines
in Japan, US and France dropped when compared to the sales in China and
Hong-Kong. While analysing, it can be revealed that the financial aspects of
Chateau Margaux has been under threat due to price escalation executed by core
markets of Pavillion Rouge, the second wine from Chateau Margaux. The
unexpected price escalation was perceived as unduly high by luxury customers
and this has led the wine to get sooner disappear from global wine market.

Capability Analysis – Contd.
• Moreover, the internal analysis of Chateau Margaux also have
shown that the distribution channel of wine producer is strong,
but on the other hand lack of initialization to enter in to
emerging markets like Asian, may negatively affect financial
assets of Chateau Margaux. Furthermore, it has also been
identified from the above analysis that, the global exporting of
Chateau Margaux is dominated by EU markets. This hence
reveals that the wine producer has strong brand image and
customer base in European markets.

Capability Analysis – Contd.
• The internal analysis of Chateau Margaux recognized human
resources of the wine production is uneven to meet growing
demands in wine market. From the internal analysis of Chateau
Margaux, it is clear that the wine producer has employed nearly 100
people to handle production process of wine. This lowered figure of
employees hence indicates that the human resource of Chateau
Margaux has been under threat for meeting customer demands
timely.