Bonny Doon Analysis
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Bonny Doon
Case Analysis
Table of Contents
Introduction 1
Industry Analysis 1
Firm Analysis 2
Strategic Issues 3
Evaluation of Alternatives 4
Recommendations 5
Implementation 5
Appendix
Figure 1 - Porter’s 5 Forces Model
Figure 2 - Bonny Doon Growth & Distribution
Figure 3 - Implementation Plan
Introduction
Bonny Doon currently has an enviable position in the 1990’s Californian wine-producing industry. The company has successfully differentiated itself from its competition and achieved a first mover advantage in terms of selling “undervalued” wines. However, due to increased rivalry and a changing and increasingly challenging market, Bonny Doon must determine how it will grow its market share.
Industry Analysis
The wine making industry in California is fragmented, composing of 847 brick and mortar wineries. Approximately 88% of their production is sold domestically in the United States, which demonstrates the high level of demand for Californian wine in the U.S. Furthermore, demand for Californian wine outside of the U.S has risen “rapidly,” due to its “ripened” flavor. Historically and moving forward, the key success factor in the wine industry is the flavor of wines – or in other words, product quality.
Traditionally wine was seen as a “pretentious” product in U.S, but by the late 1990’s to early 2000’s, wine started to become a popular social drink for the masses. In addition, the market became more adventurous, demanding unusual “undervalued” wines instead of the traditional wines such as Chardonnay. The adventurousness was driven by “Generation X” and created a significant opportunity for wineries to meet this new unconventional demand. As the industry is still currently in its growth stage, the industry attractiveness is high. Wine is a relatively high margin product, and there is increasing demand domestically and internationally. Because of
Bonny Doon
Case Analysis
Table of Contents
Introduction 1
Industry Analysis 1
Firm Analysis 2
Strategic Issues 3
Evaluation of Alternatives 4
Recommendations 5
Implementation 5
Appendix
Figure 1 - Porter’s 5 Forces Model
Figure 2 - Bonny Doon Growth & Distribution
Figure 3 - Implementation Plan
Introduction
Bonny Doon currently has an enviable position in the 1990’s Californian wine-producing industry. The company has successfully differentiated itself from its competition and achieved a first mover advantage in terms of selling “undervalued” wines. However, due to increased rivalry and a changing and increasingly challenging market, Bonny Doon must determine how it will grow its market share.
Industry Analysis
The wine making industry in California is fragmented, composing of 847 brick and mortar wineries. Approximately 88% of their production is sold domestically in the United States, which demonstrates the high level of demand for Californian wine in the U.S. Furthermore, demand for Californian wine outside of the U.S has risen “rapidly,” due to its “ripened” flavor. Historically and moving forward, the key success factor in the wine industry is the flavor of wines – or in other words, product quality.
Traditionally wine was seen as a “pretentious” product in U.S, but by the late 1990’s to early 2000’s, wine started to become a popular social drink for the masses. In addition, the market became more adventurous, demanding unusual “undervalued” wines instead of the traditional wines such as Chardonnay. The adventurousness was driven by “Generation X” and created a significant opportunity for wineries to meet this new unconventional demand. As the industry is still currently in its growth stage, the industry attractiveness is high. Wine is a relatively high margin product, and there is increasing demand domestically and internationally. Because of