The Robert Mondavi Corporation

The Robert Mondavi Corporation

Table of Contents

1. Organizational Mission and Vision 3

Mission 3

2. Corporate Objectives 3

A. Financial Objectives 3

B. Strategic Objectives 3

3. Corporate level Strategies 3

4. Business level Strategy 4

5. External Analyses - Opportunities and Threats 5

A. Opportunities 5

6. Competitive Analysis 6

A. New Entrants 6

B. Substitutes 7

C. Rivalry within the Industry 8

E. Customers 9

7. Industry Key Success Factors 9

Home markets.....................................................................................9

Brand name ..10

Access to Resources When Needed 10

8. Internal Analysis 10

A. Strengths 10

B. Weaknesses 11

9. Financial Analysis 11

A. Leverage 11

B. Liquidity 12

C. Activity 12

D. Profitability 13

E. Other Ratios 14

10. Major Issues Facing Corporation 14

References 16

1. Organizational Mission and Vision

Mission

The Robert Mondavi Corporation's mission is to do whatever it takes to make great wines and to put Napa Valley on the map, right alongside the great winemaking centers of Europe.

Vision

The Mondavi Corporation set out to be the first in California to produce premium wines that were intended to compete with premium European brands.

2. Corporate Objectives

A. Financial Objectives

Growth in revenue

Mondavi wants to increase the selling of its products in all its markets. The company recorded revenues of $468 million during the fiscal year ended June 2004, an increase of 3.5% over 2003. (1) Having strong financial objectives help companies can mean the difference in a successful company and an unsuccessful one. Setting obtainable goal and standards are necessary for any growing company.

Selling non profitable wines

Selling off or eliminating segments of non profitable parts of a company is a smart thing to do as long as the segment margin is negative. While profits for a particular segment may be negative, if the cost associated with the segment doesn't outweigh the loss, then losing the segment makes sense.

B. Strategic Objectives

To focus on their premium wines segment: Focusing on premium wines in the industry is something that Mondavi is starting to do. Their belief is that if they can make few fine wines then various medium grade wines, the preference for quality should take precedence. Mondavi is planning to divest one of its brand wines in order to focus on its "lifestyle" wines, generally those wines that are under $15 a bottle (2)(10). This will allow Mondavi to focus its resources on brands of wines that result in better quality. Having a higher quality in taste could lead of an increase in profits and impact market share for the company. Our combined customer base will enjoy the same quality products and services they've come to expect from both Robert Mondavi and Constellation. And the combined companies unequalled international distribution will enhance consumer access to the Robert Mondavi worldwide. (3)

To be at the top of the list in the industry: The Robert Mondavi Corporation is a leading producer and marketer of premium table wines. (1) Like a lot of other companies in other industries, The Mondavi Corporation wants to be a major competitor in the wine industry. Even thought Mondavi is doing well in the US markets, global markets are still being entered and resources are being used to create new opportunities for the company to grow worldwide.

3. Corporate Level Strategies

Market Development

The wine industry is pounded with rules and regulations on how they can sell and distribute wine. A lot of the wine producers in the industry want to insert channel to direct sell to consumers. Robert Mondavi is known for producing hand-crafted wines of distinct style. (19) This implementation could in turn increase profits by eliminating distributors and lower the cost of wine for consumers.

Market Penetration

The Mondavi Corporation is set to focus its attention on its premium and super premium wine segments. Putting an increased focus on a less broad area of concern helps to reduce risk of having "too many eggs in too many different baskets." The Robert Mondavi Corporation, the maker of Woodbridge and Opus One wines, is selling its interest in the Caliterra brand produced in Chile to a partner, Vina Errazuriz, as part of a plan to focus on more profitable lines. (5)

Product Diversification

While focusing on its premium and super-premium segments, Mondavi plans to introduce new wines within the segment. These wines are expected to compete with the wines from other countries such as France and Italy and are expected to have positive returns.

Vertical Integration

The Mondavi Corporation has over 8,000 acres of vineyards in its portfolio. This company is constantly searching for new vineyards and ways to grow the finest