Mondavi Case Analysis

Identification:

Overview of current situation:

Making wine is nothing else but a touch of passion, love and few drops of magic. From the first view, wine industry seems very artistic and secret at the same time. There is no doubt that hearing that Robert Mondavi Corporation is going to layoff 4% of its workforce ring the bell to the investors, at the same type the stock price dropping down dramatically makes an impression that the company is going through difficult period as the senior management is upon completing the reconfiguring future strategy. The big decision is whether to get back to original vision, and focus on the domestic market, which bring a 90% of revenues or continue diversification and keep on pursuing the vision of worldwide supplier of wines and continue expanding joint ventures with other global wine makers to get the bigger share of world market.

Current Strategy:

Together with world partners in Italy, Chile and domestic brands to create joint ventures and introduce the new wines to market, that would be acknowledged among professionals and wine enthusiasts. As well as putting Robert Mondavi Corporation on top of the wine makers list around the world.

Mission Statement:

Make wines that could proudly stand next to greatest brands in Europe using most advanced technologies and equipment. Make wine that would draw inspiration and attention, so the wine of America would satisfy the very pernickety customers and earn the respect and profits from the worldwide markets.

Analysis and Evaluation:

External Analysis:

There were quite a few external factors determining the ups and downs for Robert Mondavi Corporation.

Ð'* America was a new entrant to the old and traditional market. Difficult task of competing against the well know brands of Europe and other continents. The brands that already had good names and acknowledgement from experts. The export of American wines to global markets was only 4%, which shows that there is a lot more to achieve in regards to global competition.

Ð'* Global Partnerships with France, Chile, and Italy etc. let Mondavi Corporation achieve the goal to supply luxury wine to global and domestic markets. Through the same channels Mondavi Corporation managed to push the other brands it produces to the new countries and new customers.

Ð'* Going public was a big step that was not well analyzed by the management of Mondavi Corporation. A lack of information about wine industry and the future plans of the Corporation led its stocks to loose value in a very shot period of time. As wine making is a technology based business, in order to not reveal the secrets company had to stay low in transparency, and this greatly affected the stock price. Much bigger attention was required form senior management in informing investors about future plans, new joint ventures, partnerships and expansions. This would save company form great price drop in stock market.

Ð'* Global and domestic competition among not only wine makers but other alcohol makers and suppliers had a great influence on the sales of Mondavi Corporation. Only in U.S. there were around 1500 wineries from which 200 was exporting wines as well as Mondavi Corporation. As wine is produced in approximately 60 countries the huge global competition exists, which makes it even harder to push the products of Mondavi Corporation on the shelves.

Internal Analysis:

Robert Mondavi as a founder of Corporation brought tradition and history into the corporation. The family business was new as a whole American wine industry to the global markets. The vision and mission of corporation was set by the founder Mondavi. His ideal his believes that wine form California has potential got through the workers of the corporation where everyone is committed for a common goal. Introducing several brands to the market, RMC diversificated its products to fill the bigger market share with well known brands like Woodbridge, Byron etc.

Another important factor determining internal stage is 4 p's. Or other vise stated the price, place, product and promotion. The advantage of Mondavi Corporation is the price and product range. In the table below, we see the products and the price range they fell in:

Exhibit 7

Robert Mondavi's Brands

Brands Popular

premium

($3 to $7) Super-

premium

($7 to $14) Ultra-

premium

($14 to $25) Super Ultra-

premium

(over