Kraft Foods Group

1.0        Introduction

I am drafting this report as a consultant of a consulting company. We are approached by Kraft Foods Group looking for business opportunities into Australia wine industry.

Below is our research analysis, which involves an overall competitiveness and investment attractiveness of the wine industry in Australia:-

Australia is the one of the biggest wine producers, standing at number 6 in the world ranking, and is the 4th biggest wine exporting country, providing wine for more than 120 countries (Wikipedia, 2010). It has also the biggest domestic demand in wine, with wine consumption standing at a level of 22.4 liters per person per year in 2006, just right behind France (Australia Wine and Brandy Corporation, 2009), Southern and Western part of Australia, each of which produce varieties of wines because of the climate change, topography and soil types (Department of Foreign Affairs and Trade, 2008). They are mostly located in the southern area of Australia, and are cooler, therefore are regarded as the main regions in Australia for wine.

2.0        Part 1- Porter’s National Diamond Model (Figure 1)

This report will make use of Porter's National Diamond model to analyze the attractiveness of Australian wine industry. Wine market is regarded as main industry of Australia that generates economic growth and brings lots of business and job opportunities. Wine grapes grow well in their natural weather condition, and the high quality level is guaranteed by their skilled personnel.

In this report, Porter's national diamond would analyze the current condition of Australian wine industry, and to provide pro and cons which the Australian market will bring to the wine industry. Market Entry strategy and conclusions are given at the end of this report as future references on how to move on further.

2.1        Factor Conditions

Australia is the 5th largest economy in the Asian region, and has GDP of US$1.3 TRILLION (IMD World Economic Outlook, October 2015 Nominal 2015E).

According to Deloitte Access Economics report (2013), agribusiness is said to be the next upcoming trend of economic growth, so Australia meets the opportunity to attract major investment. It provides a stable and reliable supply of fresh grapes.

The country’s four season climate conditions, ranging from tropical to cooling environments, allow for varieties type of production from small specialist farms for “specific one of it own” products to large-scale grazing and cropping. Australia has advantageous in geographical location and sunshine conditions which is proper for agriculture, and as there is lesser contamination in Australia due to its big area land and few people, so vineyard are free from contaminations (Wikipedia, 2010). Australia has stable economic, able extend business and to recover back business fast if setback, Australia is a low-risk environment when come to doing business, therefore is a attractive point to new investors.