Monday, September 2, 2019
Casella wines ? Export success :: essays research papers
1.Identify its international markets      US and North America identified o     Distribution network – 44 states. o     Size – initially estimated 20-30 thousand cartons to 100 thousand cartons, reality was 20 to 200 thousand. o     Annual sales $3 million.      UK o     Some regional supermarkets hoping to expand to majors.      Mainland Europe o     Some beginning sales. 2.Describe and analyse the reason for its international expansion      Increase sales/find new markets – domestic market oversupplied      Minimise competitive risk      Economies of scale      Cushioning economic cycle      Comparative advantage o     High cost of labour and land in US. 3.Explaing the influences on this business in the global market Political Tensions between free trade and protection      Globalisation seeing removal of barriers      Eg. Quotas, tariffs, subsidies – statistics      Exports of wine have increased from 3% of sales to 52% of sales in 2002. this equals $2.3 billion dollars or 414 million litres      US greatest source of export growth      Australia’s export policy has led to major reforms in the Australian wine industry      ‘Rationalisation of wine production’ leading to overall efficiency giving them cost advantages over their competitors and reshaping of distribution lines.      4th largest wine exported in the world with 5% of global market International organisations and treaties      1994 Uruguay multilateral agreement (WTO)      Agreement to reduce protection on agricultural products (wines/grapes) by 36% by 2000      UK has the largest export market of wine Trade agreements      US and Australia have strong trade relations and trade agreements War in the Middle East Weak economic conditions Social Consumer tastes      Global markets have been increasingly integrated      Growing demand for mass market, high quality wines and a recognisable brand      Marketing of wines ‘other benefits’ has increased consumption globally      Strong economic growth period sees wine viewed as a luxury good, something consumers buy when they feel conditions are good as their incomes are increasing. Also at this particular price range fluctuations do not vary with economic conditions      Strong market for Australian markets taking off in the US Financial      Currency fluctuations      Weak Australian dollar has helped making Yellow Tail a better taste at $7 and a lower price than its Californian counterparts which are hobbled by high cost of land and labour      Currency fluctuations would have to get way about 70 cents for Casella to be unprofitable without a price change Legal      None mentioned 4.Explain the strategies used by the business to achieve its target markets
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