Question

Read the Closing Case "The Growing Trade in Growing Grapes" at the end of Chapter 6, in International Business perspective, respond to the following questionsstemming from the case: (Answer each questions with 800-100 words)

1. Both Old World vineyards and New World vineyards compete in the global market place. What are the competitive advantages and disadvantages of the Old World vineyards? Of the New World vineyards?

2. Should the U.S. government adopt an AOC system to ensure the quality of U.S. wines destines for export markets?

Answer 1

1.Ans: competitive advantages and disadvantages of the Old World vineyards: Old World Vineyards benefitted from centuries of tradition and their reputations for quality and sophistication. The mystique of old world vineyards was in part attributable to the belief by oenophiles (a fancy word for wine experts) that terroir and the character of the grape itself contributed to the creation of unique characteristics for each vineyard's wine. The competitive advantages of old world vineyards are the Old World producers, although dominant, were not invulnerable to global competition. They also call for a high price premium in global export of wine which helps them to attract more exporters. Judgment of Paris and changes in consumption patterns, wine production grew steadily during the 1970s, 1980s, 1990s was also a competitive advantage for Old world Vineyards. The competitive disadvantages are, consumers have a fair degree of knowledge to make wise wine purchases which raise the snob appeal of the Old World wines. Old World vintners were also limited in their ability to benefit from technological changes and economies of scale. competitive advantages and disadvantages of New World Vineyards: Now a days, French government provided a quality assurance and consumer protection program for lovers of French wine which is a competitive advantages for new world Vineyards as this will assure the consumer that he or she will get the quality product. Advancement of technology helps the new world Vineyard to gain the economies of scale which is a competitive advantage of new world Vineyards. Changes in consumption patterns are also competitive advantage for new world Vineyards. Another big competitive advantage of the New World wine makers is they relied on branding, rather than vineyard names, to market their products which simplified the purchase decision for unsophisticated buyers- remembering a brand name like Columbia Crest or Yellowtail was often easier than recalling that of an obscure, small French vineyard.