Wine E-Commerce (Coursework Sample)

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Instructor
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Wine E-Commerce
Operation of an online wine sale service is a revolutionary idea aimed at broadening the reach of Spanish brands across the globe. With an increased range, there also are increased challenges to the business. Among the biggest challenge to Todovino’s operation are cultural forces. The acceptance of e-commerce as a legitimate business module is still in its growth stages. This opinion is a challenge as many people prefer conducting face to face business as it is seen to create more trust in the product and the seller. The shifting of the consumers from a face to face to an online platform is a challenge as well as the sustenance of created relationships as they lack the personal connection between the seller and their buyer. Demographic forces are also a challenge to entities as they seek to identify and lock down their client bases. Spanish law prohibits the sharing of databases that make it harder for businesses to acquire customer data and make strategic marketing plans. As such, companies have to either partner with others or make their marketing plans from scratch.
In e-commerce, the main opportunity lies in the vast market coverage of e-commerce channels. The use of electronic commerce in wines sale broadens the overall market reach to beyond Spain. Further, costs such as marketing expenses are significantly marginalized through e-commerce as the business can independently develop and front their marketing strategy on the online platform. E-commerce also brings an aspect of availability and efficiency to the company. In that customers can access the entity at their convenience and make orders or interact with the enterprise on various platforms. Further, e-commerce is an efficient approach for managing and monitoring consumer data. The persistent threat in this line of business is that of new entrants. Given the reduced set-up and operation costs, it is easier for competitors to get into online selling than the actual setting up of retail or distribution points.
In their previous collaborations, Todovino partnered with entities that were not in the wines sector. The partnerships were all nonprofitable and as a marketing approach through which the company would set itself aside from other players and create a niche among wine consumers in Spain (Martnez-Jerez and Brem 79). The benefit that Todovino sought to realize from the collaborations was an increase in their customer base and creation of loyalty within their already attained clients. In the pending La Carte des Vins collaboration, Todovino come in as commercial partners who fully realize direct economic benefits from the proceeds of the online wing of La Carte des Vins (Martnez-Jerez and Brem 86). While, in all their previous relationships, the focus was solely Spanish wine, their new collaboration would see them endorse French wine. Further, past relations did not involve the creation of actual retail points for wines in the Todovino catalog. In the relation with La Carte des Vins, there are real points of sale from which customers can purchase products. With La Carte des Vins, Todovino also plays a background role as the brand name for La Carte des Vins remains for the proposed website (Martnez-Jerez and Brem 86). This scenario is unlike in previous collaborations where Todovino played a bright foreground role in sales and product support.
The primary value created by partnering with La Carte des Vins is the access to its already established market base. The enterprise has managed to create significant loyalty from their customers with over 90 percent of their clients being premium consumers. Since the two companies share a common wine philosophy, Todovino will get to expand their scope to cover French wines. They also will create a French wines club for their new market base from the 40,000 La Carte des Vins consumers (Martnez-Jerez and Brem 86). Creation of a co-branded company in this instance would also serve to provide variety to Todovino’s already existing customers. As compared to other unions, this presents a better value as there is an already established and loyal market for La Carte des Vins. The role played by Todovino is primarily increasing the scope of La Carte des Vins while also creating a club for their customers (Martnez-Jerez and Brem 81). This collaboration thus increases the customer value for Todovino (Fig 1, 2, 3, 4 and 5).
It is in the best interests for Todovino for Gonzalo Verdera to partner with La Carte des Vins. From his allusion, the competitors have the intention to venture into online marketing that is likely to happen with or without Todovino. The two entities might be in the same market segment, but their products are relatively different. While Todovino exclusively deals in Spanish wines, La Carte des Vins are into French wines (Martnez-Jerez and Brem 85). This difference significantly removes the possibility of product conflicts. Further, having a potential competitor as a partner can be viewed as a means of subduing competition. The agreement for this partnership would be structured such that the roles of the two partners are clearly outlined. Todovino would be left to deal exclusively with the club and online presence of the brand while La Carte des Vins would deal with retail and distribution of products. Further, the agreement would cover the prospects for expansion and the role to be played by each party. Each party would be compelled by the formulated accord to fulfill their obligations without compromising the existent independent brands for Todovino.
Through my recommendation, the company gets to keep all it has managed to build independently. The co-branding comes in as a new independent venture for the company bringing in a new untapped market for Todovino’s products. Thus, the existing market is not in any way affected by the co-branding collaboration. Since...