Global Wine Wars
ADVANCED MARKETING MANAGEMENT
CASE REPORT: Global Wine Wars: New World Challenges Old
(Harvard Business School Case # 9-303-056) NMI
1. How did the French become the dominant competitors in the increasingly global wine industry for centuries? What sources of competitive advantage were they able to develop to support their exports? Where were they vulnerable?
French wine makers also face challenges that are not internal to the industry. For instance, France lost market share in the United States due to informal boycotts in the wake of the Iraq war. The rise of the euro against other currencies, such as the 30% increase relative to the dollar in the last few years, has put French wines at a comparative cost disadvantage. But consensus among experts is that the primary threat to the French export market is internal to the industry: the inability of the appellation system to appeal to what is becoming a global way of understanding wines (Business Report, 2004).
France is the largest overall producer of wine, at 5.3 billion liters of wine in 2001, 20% of world production. France has traditionally set the standard for quality wine as well as defining these standards. French viticulture laws mandates four levels of quality as 1) Appellation d’Origine Contrôlee (AOC) 2) vins délimite qualité supérieure (VDQS) 3) vins du pays and 4) vins du table. French wine makers also face challenges that are not internal to the industry. For instance, France lost market share in the United States due to informal boycotts in the wake of the Iraq war. The rise of the euro against other currencies, such as the 30% increase relative to the dollar in the last few years, has put French wines at a comparative cost disadvantage. But consensus among experts is that the primary threat to the French export market is internal to the industry: the inability of the appellation system to appeal to what is becoming a global way of understanding wines (Business Report, 2004). Although
CASE REPORT: Global Wine Wars: New World Challenges Old
(Harvard Business School Case # 9-303-056) NMI
1. How did the French become the dominant competitors in the increasingly global wine industry for centuries? What sources of competitive advantage were they able to develop to support their exports? Where were they vulnerable?
French wine makers also face challenges that are not internal to the industry. For instance, France lost market share in the United States due to informal boycotts in the wake of the Iraq war. The rise of the euro against other currencies, such as the 30% increase relative to the dollar in the last few years, has put French wines at a comparative cost disadvantage. But consensus among experts is that the primary threat to the French export market is internal to the industry: the inability of the appellation system to appeal to what is becoming a global way of understanding wines (Business Report, 2004).
France is the largest overall producer of wine, at 5.3 billion liters of wine in 2001, 20% of world production. France has traditionally set the standard for quality wine as well as defining these standards. French viticulture laws mandates four levels of quality as 1) Appellation d’Origine Contrôlee (AOC) 2) vins délimite qualité supérieure (VDQS) 3) vins du pays and 4) vins du table. French wine makers also face challenges that are not internal to the industry. For instance, France lost market share in the United States due to informal boycotts in the wake of the Iraq war. The rise of the euro against other currencies, such as the 30% increase relative to the dollar in the last few years, has put French wines at a comparative cost disadvantage. But consensus among experts is that the primary threat to the French export market is internal to the industry: the inability of the appellation system to appeal to what is becoming a global way of understanding wines (Business Report, 2004). Although