Global Wine Wars:
Porter’s 5 Forces: Old World
o Intraindustry rivalry: lots of producers, but bound by classifications
o Threat of entry: high barrier
o Supplier power: regional aspect since wine more difficult t
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Global Wine Wars:
Porter’s 5 Forces: Old World
o Intraindustry rivalry: lots of producers, but bound by classifications
o Threat of entry: high barrier
o Supplier power: regional aspect since wine more difficult to travel, but had
a high number of growers
o Buyer Power: moderate
o Threat of substitutes: wine or water
Porter’s 5 Forces: New World
o Intraindustry rivalry: high, many brands
o Threat of entry: higher, less regulated, increase in marketing innovations
o Supplier power: low
o Buyer power: higher, lots of transparency information
o Threat of substitutes: beer, liquor, spritzers, etc.
Value Chaingrape growing>wine making>distribution>marketing>retail
New world: controlled entire value chain
o Key success factors
Technology Grape Growing: night harvest, machinery, applied
science to growing
Technology Innovation Wine Making: reverse osmosis, steel
tanks+wood chips, free to experiment
Scope Logistics Distribution: box wine and caps (helped by
cheaper sea travel), single serve
Scope Creativity Marketing: grape classification by variety rather
than region, creative marketing (spritzers)
Old World producers couldn’t imitate the very successful New World producers
o Tradition of OW regions
o Higher costs, less land, fluctuating climate
o Regulation
o Lack of value chain control
Takeaways:
o Government policy should keep up with the times
o Respond to consumer demand
o Advantages can become disadvantages over timeSwatch:
Porter’s Diamond Theory Reasoning
o Factor cost’s: labor and land don’t explain US, japan, Germany
o Macroeconomic variables: exchange rates don’t explain japan, Italy, south
korea
o Government policy
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