North South University
School of Business and
Economics
Case On:
Robert Mondavi and the Wine Industry
Mgt489.11
Date: November 28th, 2020
Submitted To:
Bobby Hajjaj (BHj)
Department of Management
School of Business and Economics
Submitted By:
NAME ID
Md. Bin Al Walid 1621230630
Introduction:
This case study concentrates on the US-based Robert Mondavi Winery established in 1966. The
company has been one of the major high quality and innovative wine producer in US history.
The focus of this report is to analyze and recommend strategies to improve and sustain the
company’s competitive edge.
Vision
The vision of Mondavi is to produce the world’s finest wines.
Mision
Build a dominant wine brand that produces complex and elegant wines that are acknowledged
worldwide for their excellent quality.
Ideology
Mondavi’s core belief is to combine the latest technological innovation and techniques with
traditional winemaking practices.
Key Issues:
Rather than focusing aggressive acquisitions like its competitors, Mondavi primarily
concentrated on organic growth of its top brands.
Goals:
Positioning the brand at the apex of its industry worldwide and improve its financial
performance while maintaining tradition and ideology.
Strategies:
SWOT Analysis
Strengths Weaknesses
1. Mondavi Wine is a leading 1. Over concentration on the
premium wine company US market.
in the US 2. Increased horizontal
2. It has strong brand integration
awareness 3. Too focused on producing
3. Applies innovative tools premium wine.
and techniques in
producing grapes and
wine.
4. Created international
joint-ventures and
leveraged expertise.
Opportunities Opportunities – Strengths Opportunities – Weakness
Strategies Strategies
1. There are still promising
opportunities for future 1. They can establish more 1. They have to improve
growth of the company in production facilities in their employees’ working
the US market. different areas which will facilities so employees’
create job opportunities will get more
2. Global market is still not
to other US citizens. encouragement for
fully utilized by
2. They can gather more producing wines.
competitors.
customers all over the 2. They can gather
world by their brand information about the
value. demand of the people to
develop their business in
different countries.
Threats Threats Threats
– Strengths Strategies – Weakness Strategies
1. New world wine 1. Developing new tastes
producers of Chile and they can create demand 1. The hidden recipe and
Australia have constant in the competitive hidden taste can be
growth of market share of market of Chile and revealed to other
wine Australia. companies and wineries.
2. Small wineries and other 2. They have a strong
big competitors are possibility to enlarge
aggressively trying to their market.
steal Modavi’s market
share
Distinctive Competence:
Differentiation: Mondavi provides differentiated premium wines to its customers. It has 16
distinct wine brands which include Woodbridge, Coastal brands, La famiglia etc. Thse brands
are praised for their quality worldwide.
Innovation: Mondavi is the leading innovator in the wine industry both in domestic and
international market. It is the first wine company that introduced cold fermentation, capsule-
free bottles, and direct-to-press operation processes.
Strategic Partnerships: the company has leveraged superior expertise from its various joint
ventures.
Porter’s Five Forces Model
Factors Impact Description
Barriers to entry are high as the wine
industry is capital consuming. Lands where
grapes usually grow are very costly. In
Barriers to Entry High contrast, developing fresh and new
vineyard is also costly. Breweries are now
engaged in horizontal integration.
Competitive rivalry is moderate as Mondavi
Winery has been able to become partners
Rivalry among Moderate of various domestic and global wineries.
Competitors Still, many older wineries are now quickly
obtaining market share by absorbing other
branches. Some other threats include E&J
Gallo, Kendall Jackson, Southcorp, etc.
Wholesalers/Distributors are the main
customers in the wine industry. Since their
High numbers are limited, therefore buyers have
Power of Buyers
more bargaining power.
At the beginning of the business operations
business, Robert Mondavi bought massive
Power of Suppliers Low portions of land for the development of
grape vineyards. Therefore, the power of
suppliers is low.
Since wine consumers are likely to
Threat of Substitutes Low maintain their consumption of wine,
therefore the threat of substitute products
is moderately low.
Key Success Factors
Crucial success factors that support Mondavi Wine to keep its competitive edge are given
below:
Prerequisites for Success
What Do the Consumers want? How does the company remain
competitive?
Finest quality wine Develop wine of excellent quality
Innovative techniques and products Apply Innovative processes and
Extensive range of differentiated technologies
products Offers 16 different premium brands of
Brand Value wines.
Utilizes cultural events, TV, radio and
print media for marketing campaigns
From the above specified prerequisites of success, we can say that Mondavi have most of the
success factors that are required to be a market leader.
Value Chain of Robert Mondavi Winery:
Define SBUs:
Firm Infrastructure
Financial Position, Sustainability
HRM
Strong Management Team, Environment Learning
Technological Development
New techniques for production of grapes, Customer oriented taste development.
developing new taste of wines. Procurement
RMC ensured the best quality of grapes developing new taste of wines.
Margin
Inbound Operations Outbound Marketing Service
Logistics Logistics
Both Seminars, Mondavi
Produce manual and Controlling cultural Corporation
grapes in automated system for and always ensures
their own operations delivering educational obtaining
land, store for goods to the events, art feedback about
them and producing customers. shows. the quality of
control grapes. wine from
Conducted
inventory. Cold customers and
TV and
fermentatio what processes to
radio, print
n in the change or
advertising
wine improve.
industry.
Identify Critical Value-Creating Activities: The major value creation activities are
operations which attracted the wineries towards their wines and their R&D team and
the marketing and customer services.
Conduct Internal Cost Analysis: They analyze value chain cost by producing own
grapes which helps them to invest more in product development sector.
Conduct Internal Differentiation Analysis: They improvise their products by
differentiating the wine tastes which helps to critically analyze their own products.
Industry Profit Pools and Vertical Linkage Analysis : They have distributors, and
retailers who helps to sell their products to the customer. As they has their own grape
lands which reduce the cost of buying grapes from outside at a large amount and the
profit helps to minimize distributional cost.
Iteration: Modavi would repeat the whole process in developing the value chain.
Value Net of Mondavi:
Suppliers
Complementors
Competitors Mondavi Winery (Gala, Cultural events)
(Southcorp, E&J
GalloGallo)
Buyers
(Wholesalers,
Costco)
PARTS:
Mondavi Winery applies the following parts strategy:
Change the players: To ensure profitability, Mondavi could alter the players of the industry.
They could acquire or merge with another competitor to remain competitive.
Change the added value: The R&D of Mondavi design innovative wine making processes
and prides customized items to consumers.
Change the Rules: Mondavi changes the rule by introducing innovative techniques and
marketing strategies.
Change the tactics: Mondavi changes the tactics by establishing wine clubs, hosting various
galas and events.
Change the scope: In the wine industry, most brands provide customized and differentiated
items which in turn alter the span of comparison.
Conclusion
The overall analysis and strategies that are discussed in this report will assist Mondavi to
sustain its position in both the local and international markets. These strategies will also help
the company to increase its sales and complement its focus on organic growth.
