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Global Wine Industry – Porter’s Five Forces Strategy Analysis

  • June 2015
  • -
  • Aruvian's R'search
  • -
  • 30 pages

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Wine is an alcoholic beverage made from the fermentation of grape juice. The natural chemical balance of grapes is such that they can ferment without the addition of sugars, acids, enzymes or other nutrients. Wine is produced by fermenting crushed grapes using various types of yeast which consume the sugars found in the grapes and convert them into alcohol. Various varieties of grapes and strains of yeasts are used depending on the types of wine produced.

The wine industry can be defined by establishments primarily engaged in manufacturing wines, brandy, and brandy spirits. This business also includes bonded wine cellars which are engaged in blending wines.

Wine has a rich history dating back to around 6000 BC and is thought to have originated in areas now within the borders of Georgia and Iran. Wine probably appeared in Europe at about 4500 BC in what is now Bulgaria and Greece, and was very common in ancient Greece, Thrace and Rome. Wine has also played an important role in religion throughout history. The Greek god Dionysos and the Roman god Bacchus represented wine, and the drink is also used in Christian and Jewish ceremonies such as the Eucharist and Kiddush.

Aruvian's R'search analyzes the Global Wine Industry in Michael Porter’s Five Forces Analysis. It uses concepts developed in Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Porter referred to these forces as the microenvironment, to contrast it with the more general term macro-environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the marketplace.

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