The global wine industry is composed of a large amount of companies all around the world. The market size is big, with high revenues, and estimated 6.8 billion gallons total volume. Exports have being increasing in this industry, representing a fast growth of the market. The market is concentrated in some countries around the world; production is very complex requiring the best and qualified raw materials. There is a mix of channels and distribution strategies depending on the marketing and price/taste/quality/ that the brands are positioned. The amount of capital required to start a winery is high and depends on the scale of production. For example, to start a small winery it is required around $1 million sourcing grapes from outside growers. The products and services are differentiated and factors like quality, well known brands, are the key for the success in this industry.

The impact of wine in different cultures around the world has been growing increasing the wine industry in the last decade in a fast rate. The industry is composed by two categories: Old World and New World

The global wine industry is changing due to the fact that is growing and new entries offer new innovations for the market. New cultures and tastes have to be explored.

Distribution related Value Chains: Wholesalers, gift shops placed in premises, agent brokers, distribution importer, and joint ventures.

Company Value Chain: preparation of land in order to grow grapes, drying process, extraction of juice, aging, and labeling.

Countries that are well known on the market like Italy and France have a strong position on global market making it difficult for small and new competitors to enter in the global market. Distributors will be more willing to do business with a better known brand than a new small one that just entered in the global market. As a result, it creates a challenge for those who want to compete abroad and increase their image. Another challenge is the fact that some governments will input high tariffs on wine imports, in order to protect local producers and sometimes to discourage consumption of foreign products.

The rivalry among competing sellers has a great effect on industry attractiveness because it is an industry that is growing and demand of product is growing as well. The greater the quality of service or product the greater will be the benefits, like higher profit. The number of buyers in increasing with the market growth; consequently, it will attract new entries with a great opportunity to grow. Another force to have a great effect is competitive pressure stemming from buyer bargaining. The consumers of wine are known by their taste and loyalty to the product. The bargaining power of buyer is low due to the fact that they are interest in quality and not price. If you offer a good product they will buy it for whatever price. If they want a lower quality they will pay a lower price. This attracts more business to the market knowing that if you price high and offer good quality, buyers will buy your product over others no matter what.

Supplier- Related Value Chains: Makers of wine bottles, label, equipment, and grape’s growers.

Another key factor is the ability of responding to different markets around the world. The ability to respond to local needs will increase you success in the market. A favorable image and good reputation with buyers is an important key to succeed in the wine business.

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