Question

case study- French winery considers Indian market

answer the following questions

1.What are the main market entry barriers that Chateau Camargue faces in entering the Indian
wine market?
2. In your opinion, what would be the best market entry strategy for Chateau Camargue to
overcome its financial difficulties? Explain your reasoning.
3. Should Chateau Camargue consider a long-term foreign direct investment strategy in India?
Explain your reasoning.

Answer 1

1) The major market entry barriers that are faced by Chateau Camargue in entering the Indian wine market are

· About three to four companies are meeting almost 90% of the demand in the Indian wine market and since only the remaining 10% are open to competition for others, the competition levels are very high

· The cultural barriers to enter the market of Indian wine industry are relatively higher compared to other nations.

· The state regulations in starting a wine industry are higher which means that it is difficult for an external industry to enter an Indian wine market

· Indian wine market is small as the preference is more for other liquor products.

· They face difficulties in target market entry and financial burdens of entering a foreign market.

2) The following market entry strategies could be adopted by Chateau Camargue while entering the Indian market

· As the Indian market are being dominated by beverages other than wine, it is essential to conduct a market study and analysis as to where the wine industry can be located so as to reach out to maximum number of people.

· Religious use of wine can be exploited so that there would be continuous demand which will never exhaust.

· It is better to conduct competitor analysis so that various market strategies to sustain could be formulated with increased profits as concerned.

· Thus, it would be recommended for the firm to enter the Indian wine market as a joint venture with existing Indian firms so that the consumer base is attained as an added advantage.

3) The following would be the advantages for Chateau Camargue if it starts a long term FDI in Indian wine market

· A long-term strategy would help the firm to establish itself in the market and hence would be able to overcome the disadvantages of a short-term market

· It would help them to establish better relationships with the existing firms so that the expansion in the wine market would be made better.

· A greater level of market influence and trust in the market could be attained for long-term FDI’s compared to short-term FDI’s as the period of stay is longer which would help in improving the reliability of the firm

Thus, from the above points it would be clear that establishing a long-term FDI in the Indian wine market could prove better for the firm in establishing a control in the Indian wine market.