Case: Crafting Winning Strategies in a Mature Market: The U.S. Wine Industry in 2001

After reading the case, one might conclude the five forces framework for the U.S. Wine industry (in 2001) to be: Budget Barriers to Entry B Substitutes High Buyer Power High Supplier Power Relatively high Relatively low Competitive Rivalry High Premium Low Relatively low Hight Not relevant High As a whole, the industry is unattractive. When comparing the two segments head-to-head, however, the premium category (higher margins and growing sales) is more attractive with greater latitude for actors to play than the budget category (low margins with declining sales), where there is little room to play. Now that you see the industry from a competitive strategy viewpoint, answer the following questions: 1. What would you do if you were an incumbent in the industry applying competitive strategy thinking? Use the Porter analysis to guide your recommendations. Remember, you are an incumbent in the industry. Your current strategy (budget or premium) is not important. Advance the most effective strategy for the industry you see in the case. 2. What would you do as a new entrant in the industry?