Robert Mondavi Corporation (RMC) is a company whose strategy has expanded overtime. The company began operations by pursuing a strategy of being the first wine company in Napa Valley to make wines that rivaled those from the great winemaking centers in Europe. To meet this objective it implemented best practices in the production of premium wines by assembling industry experts developing a new technology to permit gentle handling of wine grapes and cord fermentation of white wines and introducing process innovations such as steel fermentation tanks, vacuum corking of bottles and aging of wines in new French oak barrels. Although RMC's initial business plan called for producing super- to ultra premium wines, the company later began to explore additional price points and niches in the domestic wine market that it could sell in high volume. RMC obtains eighty-eight percent of its grape supply from non-company owned vineyards. In the 1980s, the company formed global partnerships with France, Italy, and Chile to expand its international presence.
RMC has been moderately successful with its strategy. It was able to go public in a market not particularly receptive to the wine industry, raising nearly $50 million in a 1993 IPO. But, in 1998, RMC had only a four percent market share of the U.S. table wine market. It was over shadowed by four companies, most notably E. & J. Gallo Winery with more than twenty-seven percent of the market. Although revenue showed growth in the years 1997-1999, operating margin as well as net profit margin slid in 1999. The primary cause of these declines was a shortage of grape supply for its leading brand, Woodbridge Chardonnay. Shareholder discontent was obvious as the stock price fell nearly sixty percent.
SWOT analysis of RMC shows a mixture of strengths and weaknesses for the company. On the plus side, the company derives ninety percent of its revenues from its domestic brands and has been very successful in the Popular Premium category through the sales of Woodbridge Chardonnay....
Robert Mondavi Corporation: Strategic Analysis Robert Mondavi Corporation has dealt in wine making since 1966 and is one of the leading wine companies in the U.S. The Company is organized around three operating units: Robert Mondavi, Woodbridge and joint ventures, and other brands. Its operations are based in Napa Valley, California but have expanded to several other parts of the world such as Chile, Italy and Australia. ("Robert Modavi," 2003-Company website-
In the 1990s Mondavi explored other joint venture options including one with the Italian vintner Luce della Vite. Their joint La Famiglia di Robert Mondavi uses Italian grape varietals grown in California to produce a line of high-end wines. More recently, Mondavi acquired Arrowood, marking the firm's first entry into Sonoma wines. Mondavi owns and leases a total of almost 10,000 acres of vineyard land in California. Their joint
HBR Page | Robert Mondavi and the wine industry Case Study- Harvard Business Review Evaluate the structure of the global wine industry. How is it that the structure is changing? Historical perspective of wine production starts in around 6,000 BC when Mesopotamians initially began to produce wine. Wine has been important part of ancient lifestyle; Egyptians use to bury it in pharaohs for the comfortable living in life after. Greeks consider Dionysus as
The main advantage Mondavi possesses over Allied Domecq is the fact that it has a series of well established brands, brands which have become well-known to the market through marketing campaigns that ensure that the brand has a distinct identity and unique image. Additionally, in my opinion, until the synergies begin producing results, the tactics of simply buying players on the market needs time to sediment and to become
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