The case study discusses the growth of icewine and follows Vincor International, which creates an international market for its Inniskillin Icewine. Follow Roger Provost, an HBS graduate, who is the CMO of Vincor, as he develops the marketing strategy. The case analysis deals with various issues related to brand management, product development, and international marketing.
Geoffrey G. Jones; Jillian Hirasawa
Harvard Business Review (805129-PDF-ENG)
May 12, 2005
Case questions answered:
Case study questions answered in the first solution:
- Identify the main strengths and weaknesses of Inniskillin.
- Identify the existing problems hindering the development of the company.
- Choose a new company development strategy.
- Determine the results and effects of the implementation of the new strategy.
Case study questions answered in the second solution:
- The case mentions that the firm is part of “the ongoing consolidation in the wine industry.” Based on what we have discussed all semester, why do you feel there is so much consolidation in the wine industry, and why would this firm be a target?
- We have discussed the role of the middlemen, the distributors, in the system. The case provides two reasons for the existence of the middlemen. Do you feel that the middlemen benefit or harm the brands? What are the advantages of having middlemen, and what are the disadvantages?
- Once again, in this case, industry regulation plays a key role. Using your text discussion of converging markets, how did regulation impact the Canadian wine industry?
- What factors do you feel make the market for Icewine unique?
- Discuss Inniskillin’s pricing and distribution strategies. How did the choice of distribution influence the price point?
- Being a first-mover in a market often requires a radical adjustment in strategy as other competitors move into the market. How did Inniskillin first establish the market for icewine, and now how are they defending their position in it?
- What expansion route would you recommend that Inniskillin take?
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Inniskillin and the Globalization of Icewine Case Answers
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PEST analysis – Inniskillin
There are several factors that can affect the success or failure of the introduction of Icewine by Inniskillin. These factors include the political, economic, social, and technological aspects.
Political factors
- Strict control by the regulatory authorities of Canada, Austria, and Germany over the production of ice wine (due to the threat of synthetic production).
- Strict licensing requirements for alcoholic beverages in the USA.
- Opening of the EU market for ice wine (there was a ban on the import of sweet wines in the EU with a volume of more than 1000 hl.) (2001).
- The presence of countries with a lack of standards and legislation regulating alcoholic beverages.
- Government interference in the production of alcoholic beverages.
Economic factors
- Consolidation of the alcoholic beverages industry (mergers of leading companies in the industry in order to quickly enter the stock exchange and create an industry leader). To a greater extent, the industry is related to beer but also to wine.
- High margin requirement of duty-free trade operators.
- Barriers to entry into production for operating wineries in Canada have decreased, and prices have increased, hence an increase in the number of players in the market.
- Currency exchange rate changes.
- Price fluctuations in both local and international markets.
- Inflation. Destroys the purchasing power of the consumer, and the buyer damages the cost of raw materials and other resources that are used by Inniskillin.
Social factors
- Changing consumer tastes.
- The growth of consumer incomes and the subsequent increase in the popularity of “premium” wine brands.
- Publication of studies on the health benefits of wine (prevention of aging and cardiovascular diseases).
- Increased intolerance to drunk driving (ice wine has a lower alcohol content).
- The high popularity of ice wine among the Japanese population.
- There is a high level of temptation among consumers to buy fake Icewine Inniscillin because of the low price.
Technological factors
- The emergence of technologies that improve the consistency of wines and reduce operating costs.
- The emergence of the Internet and online commerce (led to the rejection of many intermediaries. Inniskillin can now…
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