Robert Mondavi Corporation Case Study

1.0 Abstract

An interesting topic of analyzing the Robert Mondavi Corporation – applied Porter's five forces to examine their internal and external forces that greatly affected them and the US wine industry. The fundamental of key success factors reflected in the past experience of RMC in US. It may not sufficient for future strategies, but it is essential to understand how's the RMC survive in the "great" environment. Finally, recommendations are provided for RMC for its future expansion's strategies.

2.0 Introduction

Robert Mondavi Corporation, with its family of Robert Mondavi wineries, is one of the United States' premier winemakers and has done much to bring the Napa Valley region to the forefront of international winemaking. Robert Mondavi a son of a poor Italian migrant started his dream of making good wine since 1960s. His intelligence and passion in wine lead him to be a legend in Californian premium wine industry and owned brands like Robert Mondavi Napa Valley, Robert Mondavi Coastal, Woodbridge, Vichon Mediterranean, La Famiglia di Robert Mondavi, Byron, Opus One, Caliterra and Lucente.

Question 1. Using Porter's Five Forces Model, analyze the competitive pressures that Robert

Mondavi faces in the U.S. domestic wine industry

3.0 Competitive Forces in Wine Industry

The graph (Figure 1) below demonstrates Porter's five-force model is used to analyze the competitive pressures of Robert Mondavi Corporation in the market and assessing how strong and important each one is (Thompson & Strickland 2003), risk of entry and the potential competitors, bargaining power of buyers, bargaining of suppliers, closeness of substitutes as industry's products and intensity of rivalry among established companies.

Figure 1: Michael Porter's 5 Forces

3.1. The Potential Entry of New Entrants

Usually, the wine industry has high barriers of entry, such as sales needed to justify the enormous legal cost associated with producing industries, high investment in building facilities, farmland, advertisement and marketing activities. Moreover, the established companies like E & J Gallo Winery, Canandaigua Wine, The Wine Group, Beringer Wine Estates, Robert Mondavi Corporation etc. had usually gained the core competencies are other substantial barriers to entry in these