Essays on Wine Industry in Australia Case Study

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The paper "Wine Industry in Australia" is an outstanding example of a business case study. The Australian wine industry, despite its current growth rates, has a wide range of challenges that if left unchecked would lead to an eventual industry failure. Therefore, this essay develops a critical focus on the various industry challenges with the aim of developing alternative solutions as well as offering strategic recommendations on approaches to overcome and mitigates them. 2.0 Problems 2.1 Weather Changes One of the challenges affecting the Australian wine industry is drastic weather changes in the market of late.

In this case, the challenge mainly targets and implicates the industry farmers thus reducing the overall supply reliability, For instance, in 2014, a hail affected the Queensland farmers when the grapes were nearing their maturity. Consequently, this led to low grapes supply, a virtue that fluctuates the demand and acquisition costs for thus fluctuating the Australian wine industry production costs (Onselen, 2010). Thus, this exposes the industry wine to increased competition from the Italian and French wine industries that have relatively stable production costs and raw products supply bases.

As such, this challenge exposes the Australian wine industry to collapse and competitive edge failure in the global market into the future in the event that the challenge remains un-mitigated. 2.2 Declining Market Supply Besides the weather-related supply implications on the Australian market, statistics as Jones (2013) noted indicates that the wine industry supply base is declining by the year. In this regard, as of 2014, the industry supply farmers’ base had a $ 108 million a rapid decline from the 2004 vintage value of $ 224 million. As such, this illustrates a decreasing stimulation for suppliers to invest in the industry, exposing the wine manufacturers to the risk of a local raw materials supply challenge and the consequential global sourcing of such grapes, a move that could unnecessarily raise the already rising industry production costs.

It is imperative that this declining supply base motivation and drive is addressed to overcome a likely supply base total collapse into the future. 2.3 Appreciating Australian Dollar Most of the wine manufacturers in Australia are multinational corporations in that the produced wine exceeds the Australian domestic wine market demands.

Therefore, the majority of them targets the international market platform. However, a stabilizing and appreciating dollar is derailing the industry development and success rates. As Choi and Papaioannou (2009, p. 307) noted, unlike other developed nations whose currencies were greatly impacted in the post-2008 global financial crisis, the Australian dollar remained relatively stable, appreciating over the years since then. Consequently, this has increased the overall global prices for Australian wine products. Therefore, this has led to high wine product costs against those of competitor industries such as France, Italy, and Russia.

Therefore, this essay establishes that unless the current market situation is corrected through strategic measures to reduce the market price for Australian wine products, the industry risks losing its market base to the competitor industries as mentioned above. 2.4 Changing Market Preferences Despite the traditional market dominance and influence imposed by the Australian wine industry in the traditional global wine market; this influence is waning with time. In this regard, the emergence of the new generation X and Y with diversified preferences in the market. As such, this has led to a preference and taste change in the favor of new wine manufacturers and sources such as Russia, whose wine industry is registered as one of the most highly growing economies (Rahman and Azhar, 2011, p. 93).

Therefore, in order to change the current mismatch between the Australian wine industry and market needs drastic changes should be developed and effected by the respective stakeholders.

References

Benckendorff, P., Moscardo, G., & Pendergast, D., 2010, Tourism and generation Y, CAB International, Cambridge, MA

Choi, J. J., & Papaioannou, M. G., 2009, Credit, currency, or derivatives: Instruments of global financial stability or crisis?, Emerald, Bingley.

Fischer, C., & Hartmann, M., 2010, Agri-food chain relationships. Wallingford, Oxfordshire, UK: CABI.

Hoskisson, R. E., & Hoskisson, R. E., 2008, Competing for advantage, Thomson/South-Western, Mason, OH.

Jones, N., 2013, World of Wines: A few issues facing the Australian wine industry this year, Ruidiso News. [Online] Available at < http://www.ruidosonews.com/ruidoso-news/ci_25340699/world-wines-few-issues-facing-australian-wine-industry> [Accessed December 11, 2014].

Onselen, P., 2010, Wine Industry Losing Ground. [Online] Available at < http://www.theaustralian.com.au/business/if-wine-industrs-a-loser-sour-grapers-wont-help/story-e6frg8zx-1225940911501?nk=a47c088cc38fab02350a14bfa766bf7a> [Accessed December 11, 2014].

Rahman, S. & Azhar, S. 2011, "Xpressions of generation Y: perceptions of the mobile phone service industry in Pakistan", Asia Pacific Journal of Marketing and Logistics, vol. 23, no. 1, pp. 91-107.

Sands, M. 2003, "Integrating the Web and e-mail into a push-pull strategy", Qualitative Market Research, vol. 6, no. 1, pp. 27-37

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