Global Wine War Case 2009
Global Wine War 2009 : New World versus Old
How were the French able to dominate the worldwide wine trade for centuries ? What sources of competitive advantage did they develop to support their exports ?
France and the Mediterranean region is closely tied to the Wine History. It has started since the Roman Empire, and has been fully integrated to the European culture with the Christian era : Monasteries planted vines and built wineries. The nobility started also planting vineyards as a mark of prestige. In this early market, France has been dominant thanks to key advantages :
1. Factors Conditions : First, their geographic and climatic features played significant role. As France is in the middle of Europe culture with suitable climate and soil condition for harvesting grape, had accrued first-mover advantage and established its place as the dominant competitor in the global wine industry.
2. Demand Conditions : The Distribution and Marketing made the fame of French wine. The négociants traded wine between France and other countries and this worked as word-of-mouth effect, increasing the reputation and dominance of French wine.
3. Innovation. In the late 18th century, French producers had experienced a massive innovation in the market. Mass production of glass bottles, the use of cork stoppers and the development of pasteurization revolutionized the industry. Those innovation got the distribution and Marketing easier. These innovations increased the stability and longevity of wine which allowed the transportation of wine to distant places, and birth of global wine market.
4. Government : Protection from the government. As the industry developed, the French government controlled the wine production and quality, regulations like AOC and VDQS, set detailed and quite rigid standards for vineyards and wine makers. Doing so, the local producers were protected with labels. This classification contributed to make the fame of many wine producers (Bordeaux,...)
How were the French able to dominate the worldwide wine trade for centuries ? What sources of competitive advantage did they develop to support their exports ?
France and the Mediterranean region is closely tied to the Wine History. It has started since the Roman Empire, and has been fully integrated to the European culture with the Christian era : Monasteries planted vines and built wineries. The nobility started also planting vineyards as a mark of prestige. In this early market, France has been dominant thanks to key advantages :
1. Factors Conditions : First, their geographic and climatic features played significant role. As France is in the middle of Europe culture with suitable climate and soil condition for harvesting grape, had accrued first-mover advantage and established its place as the dominant competitor in the global wine industry.
2. Demand Conditions : The Distribution and Marketing made the fame of French wine. The négociants traded wine between France and other countries and this worked as word-of-mouth effect, increasing the reputation and dominance of French wine.
3. Innovation. In the late 18th century, French producers had experienced a massive innovation in the market. Mass production of glass bottles, the use of cork stoppers and the development of pasteurization revolutionized the industry. Those innovation got the distribution and Marketing easier. These innovations increased the stability and longevity of wine which allowed the transportation of wine to distant places, and birth of global wine market.
4. Government : Protection from the government. As the industry developed, the French government controlled the wine production and quality, regulations like AOC and VDQS, set detailed and quite rigid standards for vineyards and wine makers. Doing so, the local producers were protected with labels. This classification contributed to make the fame of many wine producers (Bordeaux,...)