Case Study of Hunter Wine Company, Australia (Case Study Sample)

Strategic Management: Hunters Wine Company Name: Institutional Affiliation: Strategic Management: Hunter Wine Company Introduction Various trends have occurred in the market and which have led to the creation of various business opportunities. These prospects have brought variations in the international market. Significant changes in the supply and demand of different products have also been observed. Among these products is wine. There has been an increase in the request for wine in the recent years which has led to Asian countries to be more focused on dealing with the increasing the wine supply. The result of this action is that the world economy has diverted its focus on the growth of these countries. Due to this change, there has been an increment in the demand for goods and services in the Asian countries. Wine is also the most affected product as a result of high demand in Asia. Australia has benefited mostly due to the increased export of their wine to the Asian countries. Over the years, China has been the major wine exporter, but with the expansion of Hunter Wine Company, there are prospects of beating China's market share. The aim of this paper is to highlight the vital aspects that Hunter Wine Company has incorporated in its development strategy. Some of these features will entail the company's history, the resources at its disposal, its capabilities, core competencies, and the strategic development. These will help in determining the company's sustainability, the external as well as internal environments, the wine consumption patterns, the international market entry barriers and strategies, the trading agreements, the possibility of acquisition and mergers, and the Blue Ocean strategic opportunities. Also, the report analyzes the importance of strategic leadership, entrepreneurship, the organizational structure, corporate governance and the regulatory controls. History and Strategic Development of the Company The Hunter Wine Company (HWC) is located in the Hunter Valley, in the State of New South Wales. The Smith Group founded the company in 1990 on a twenty-five hectares of vineyard. The vineyards included the Semillon, Chardonnay, Cabernet Sauvignon, and Shiraz. The firm has over the years continued to enlarge by getting new vineyards from the neighboring ranches. The company has also come up with measures that have enabled them to improve the yield and the nature of generating more grapes from other growers. These actions have brought an expansion in the procedure of winery creation. The company has become popular in Australia and has figured out how to grasp a few awards throughout the year. They have won silver, bronze, and even gold medals in various occasions. Resource Capabilities and Core Competencies The company's capabilities, as well as the essential skills, are attributed to the successful administration. The core management has enabled Hunter Wine to deliver quality products that have earned it reputation throughout the years. It can be said that one of the critical values of the Smith Family is the constant research of upgrading their facilities as well extension services to their external grapes suppliers. As a matter of fact, the family is passing down knowledge, trust, enthusiasm, and experience from generation to another. The Competitive Advantages Competitive advantage exists when a competitor cannot imitate or lacks the resources to attempt the imitation. According to Rocchi & Manuela (2013), the regional identity can be a competitive advantage to an extent where the competitor cannot produce the same wine as other competitors unless they use its lands. Also, in the case of Hunters Wine Company, the transmission of the winery from one generation is a clear indication of the sustainability of such a competitive advantage. The competitors will not have access to the company's territories as long as the knowledge is passed on in the family. The Internal and External Environment The Internal Environment These are factors from inside the company that affects its performance. These are indicated by the strengths and weaknesses of the company. Strengths * The location of the vineyard * The power of Smith family to preserve high reputation in Australia * Producing fantastic brands has given the organization a huge position in Australia Weaknesses * The firm concentrates on neighborhood showcases * Hunter Wine Company provides necessary items and has not yet figured out how to extend its creation The External Environment These are factors from outside the firm and that affect its performance. They include the potential threats and opportunities. Opportunities * Possibility to grow internationally * The increment in the quality and quantity production brought by the existence of enhanced production machines. * Incorporate more wine types in their generation line * Gaining worldwide market that will expand its reputation Threats * The wineries may be influenced by changes in climate and the frequent catastrophes like absence of rain and disasters * Variations in the financial structure can affect the estimating arrangement of the organization Economic Market Drivers and Wine Consumption Patterns Persons across the world are allowed to take alcohol when they achieve a legal age. The table below shows that wine is the most consumed drink in the Asian continent. Alcohol Consumption in Asia 2011 According to the Wine Economics Research Centre, in the period between the year 2000 and 2009, the use of grape-wine increased in Asia specifically in Singapore, India, China, Malaysia, Thailand, and Taiwan. Market Entry Strategies, Barriers, and Trade Agreements Trade barriers restrict the exportation and importation of commodities from and to a particular country. One such barrier is that many states necessitate registration of foreign wine bottles, thorough inspection of the wine, and specified labeling necessities. These are some of the obstacles that may affect the Hunter Wine Company. The entry requirements for the international market may be suppressed by some factors. For example, the Hunter Wine Company is a local Australian company and thus may lack the necessary funds for indulging in the international opportunity. The WTO provides an agreement that ensures that all the technical regulations such as packaging, labeling, and marking do not prevent international trade of wine (Foster & Spencer 2012). The Hunter Wine Company must ensure to uphold this agreement if it takes the opportunity to enter into the international wine business. Wine companies in Australia have an advantage over other firms because of their high-quality fine wine. Some of the companies have engaged in the prevalent wine business opportunities in the Asian market such as in Japan, China, and Thailand. Australia has engaged in free trade agreements with these nations. According to a report by Wine Australia (2016), the agreements have resulted in the removal of trade tariffs in the wine industry between Australia and each of these countries. These agreements have seen an increase in the value of wine export from Australia. These are some of the favorable deals that HWC can seize and reap more profits. Some of these countries such as Japan have witnessed a change in alcohol consumption with a larger population preferring quality wine. The confidence in Australian wines has increased in the Asian market, and the Hunter Wine Company may utilize such opportunities. The Potential of Mergers and Acquisitions Mergers and acquisitions occur for various strategic reasons that include increasing the capabilities of a company, developing a competitive advantage, and increasing the market share. However, these policy options also bring along with them many problems such as fear among the employees of either company being retrenched after the union. Hunter Wine Company has become a strong competitor in the Asian market and merging it with a reputable Asian company would be a big step into enlarging its market share. There have been mergers happening in other Australian wine companies, but none involves The Hunter Wine Company. The business is family-owned and is passed on from generation to another. Combining it with another company would also bring in new knowledge in the management of the enterprise. One of the strengths of the company is its a...