MGT - 489

Strategic Management
Sec: 8
Group-04
Submitted To:
Bobby Hajjaj
Senior Lecturer
Department of Management
School of Business & Economics (SBE)

Submitted By:

Name ID
Md Ali Azzan Esha 142 0066 030
Mohammad Riasat Quader 133 0536 630
Md Towfiqur Rahman Bhuiyan 132 0120 030
Mohammad Abdullah-Al-Atique Khan 133 0219 630
Abdul Aziz Saleh 141 0350 030
Nasib Hasan Nadim 141 0905 030
Anika Monzoor 122 0123 030
Samiha Maisha 123 0407 500
Total words: 997
 Vision

To capture all the different consumers of wine and holding their brand name RMW.

Mission

To grow the customer base by removing wine’s mystery, while still maintaining the magic.

Strategic intent

Reaching all the customer base and enhancing their knowledge and impression about their wine.

Core value

 Quality maintenance
 Targeting the global market.
 Ecologically aware
 Reasonable
 Pioneering
 Sharing knowledge about the myths about wines and motivating towards their wine-
culture.

Core purpose

To strengthen their idea and dedication through their culture and reaching various fan bases for

Keeping all of them attracted.

 Problem Identification

1. There has been a decline of 3% in the sales of jug wines in the US

2. US labor cost is higher than other countries
3. Mondavi marketed wine as an elite drink lessening sales of lower priced wines.
4. The brand is highly concentrated in the US market
5. Disappointment by distributors in Mondavi’s one sale force strategy

Key Success Factors

1. Customized marketing and distribution strategies for each brand of Mondavi wines
2. The old brand name of Mondavi will help them to expand to other parts of the world
3. Differentiating their product from competitors will help boost sales.
4. Acquisitions and mergers are required
5. Target market should be increased and diversified

Core Competencies of Robert Mondavi

1. It is an old and well-known brand and so has high brand value

2. It has a very informative marketing strategy
3. It employs innovative technology to make wines
4. There Is a large range of products made by the company
5. It has good control over its raw material supply
 Porter’s Five Forces| Premium High End Segment

Barriers to entry

 For new company, barriers to entry is very high due to they need better supplier than
existing companies to reduce the cost, huge capital to set up the business for the first
time.

Suppliers Power

 Suppliers power is low means suppliers have very little bargaining power as company
can use their own resources to grow major portion of the grapes and many supplier of
grape are available.
 On the other hand, experienced grower is rare to find who can provide best quality raw
material which can make product attractive to the customers. In that case, supplier have
more bargaining power over the company.

Buyer power

 In USA many wine companies exist which leads to high buyer power. Buyers can switch
their brand easily as market leading brands differentiated their products to high end.
 Mondavi has a strong and successful customer base position of serving best quality.

Competitive Rivalry

 Competitive rivalry is high as many rival companies are getting merger with each other.

Threat of substitutes

 It is also high as many alcoholic beverages like beer, Champaign are available in US
market.
 Porter’s Five Forces | Lower End Segment
Barriers to entry
 It takes long period of time to reach breakeven
 Most of the customers have high brand loyalty

So, treat of new entrance in LOW lower end segment

Suppliers Power
 Most of the companies have long term contacts with suppliers, so they can bargain only
time of contract renewal

So, bargaining power of suppliers are LOW.

Buyer power
 Importers and wholesalers can import different country’s brands easily. So, high
competition among the brands

So, in lower end segments bargaining power of buyers are HIGH.

Competitive Rivalry

 Competition in the lower segment is very high because of price war

 Many companies are doing mergers and acquisitions, so competitions are rising
immensely

Here, in lower segment competitive rivalry is very HIGH.

Threat of substitutes

 Other substitutes are cheaper, distilled wines that are created and sold by Mondavi’s main
competitors.

So, threat of substitutes in lower end is also very HIGH

 Value chain

Research & Development

Can make and introduce verities of wine

Can improve their manual wine making process.

Procurement
Always focuses on international grape production

Lastly going with the Contracts

Operation
Use manual oak‐barrel fermentation for high end product

Use automation for low end product.

Marketing

Arrange Radio advertising, Print, TV advertising

Host Cultural events

Identify opinion leader.

Distribution
Huge established wholesaler who are accounted for 29%of the firm’s sales.

A myriad number of liquor stores sell Mondovi wine.

Service
Woodbridge accounted for majority to export sales though RMW
 The Value Net

Suppliers

Robert
Competitors Mondav Complementors
i

winery

Buyers

Suppliers

 Mondavi owned and leased 9,700 acres of vineyards in Cali, and 1,600 acres in Italy,
Chile and California.

 63% grapes from company vineyard.

 Entered into long term contracts with other independent buyers.

 Competitors

 Direct competitors: Kendall-Jackson

 Trinchero Estates: Non-alcohol wine.

 Large-Volume Producers: E&J Gallo: vertical integration, Teamed up with potential

buyers.

 Beer and distilled spirits producers: Diageo, Brown-Forman

 Competitors are aggressive towards new products development.

 They can be the rival of Mondavi at any time in different sectors.

Complementors

 Mondavi did more than 10 mergers with different region’s wine business owner.

 Almost every merger is successful.

 Main target is to produce premium wines by collaborating with different cultures.

 Successful ventures creates more happiness between partners.

 Low chances of partners turned into competitors.

 Buyers

 Mostly buyers are retail store, restaurants, exporters

 They made deal with most renowned distributors and work closely with them.

 Mondavi also concern about consumer’s buying patterns and preferences

 Buyer’s have more product reach than other competitors.

 So there is minimal chance of Mondavi’s buyers which can switch to opponent’s product.

Recommendation

 Diversify its target market & segment.

 Develop & expand distribution channel globally.
 Distributes by own retail shop/market.
 Gain market share in those region where consumption is growing.
 Asses brand value in the niche market.
 Partnership with luxurious hotel & restaurant.
 Conclusion

We believe that the recommendations we gave will help the company to tackle the current and a

few long term issues.