Strengths
- The length of expertise and experience producing quality wines. The company had existed since 1855 from the original owner and the new owners have maintained high quality first growth wines until contemporary times;
- The products were aptly described as “brilliantly consistent wine of stunning grace, richness and complexity” making it difficult to imitate;
- The strategic location of the land from which the grapes were planted and harvested; as stressed: “terroir was the principle that led the French to name wines after the place they came fromBordeaux wines, especially the great ones, improved with age, sometimes for several decades” ;
- Exemplary competence exhibited by higher management who oversee its governance and administration;
- Expertise in maintaining and sustaining a good harvest through the fortunate good weather, developed technical skills in preventing crop diseases, and affording the use of appropriate equipment;
- Financial success which enabled the organization to invest in updated equipment that worked efficiently and effectively.
Weaknesses
- Overreliance on negociants or merchants as sole distributors of their products;
- Restrictive perspectives on innovation despite evident thrusts of changing tastes and preferences of New World consumers;
- No knowledge on the customers, since all marketing efforts were left to merchants;
- Complete absence of marketing efforts; therefore, they have no historical marketing experiences on developing appropriate strategies for the 4Ps: product, price, place and promotions on a more global sphere;
- Reliance to merchants and the distribution system as the organization’s marketing tool;
- Lack of skills in marketing, distribution, and space for inventories of different wines. As indicated: “the merchants do a lot of hard work: storage, transportation, temperature control, customer relations, delivery everywhere in the world. We’d have neither the skills nor the means to do that for our 150,000 bottles” .
Opportunities
- Continued preference and increasing demand for first-growth Bordeaux wines despite increasing prices;
- Seeking other modes of distribution other than relying on merchants; say, through online applications and direct selling; as disclosed, “if we put on our website that we are selling direct, I am sure it would run very well” ;
- Being able to develop pricing strategies according to demand and supply of products being offered;
- There could be potential markets for low-priced wines coming from their organization. Since they have the skills, competencies and expertise at producing high quality wines, consumers would also prefer buying some products from them if they could offer lower-priced wines in the emerging markets.
Threats
- Emergence of New World producers of wines, especially identified in the United States, which became the organization’s stiff competitors in the global market;
- Prices depending on different external factors and on the en primeur system;
- Growing markets were regarded as risks in terms of increasing the need to balance distribution of wine products to all customers alike, across geographic locations, and to take into account changes in tastes and preferences of varied consumers;
- Preferences for heavier, darker wines could be potential threats and problems since the organization wanted to continue their strategic focus on their first growth Bordeaux wines.
Reference
Deighton, J., Dessain, V., Pitt, L., Beyersdorfer, D., & Sjoman, A. (2007). Marketing Chateau Margaux. Harvard Business School, 1-15.
