Case study Essay Example | Topics and Well Written Essays - 1000 words - 1

Case study - Essay Example Also, the tradition associated with a wine being a family wine with 238 years of history and being the third oldest wine maker in Germany brings charm to the product which could be its advantage over its competitors in the market. Johann is capitalizing on this by holding events in their estate to ensure customer retention. b. Weakness – expensive. Quality comes at a price and this makes the company hesitate to expand its reach in the market because of the cost associated not only in producing the wine, but also in marketing it (a tour in US costs EUR 5,000). c. Opportunities – the liberalization of the wine market provides an opportunity for Fitz-Ritter to expand to other markets abroad that would widen its market and customer base. d. Threat – new entrants in the market from the New World offering comparable taste at a lower price serves as a very potent threat to Fitz-Ritter. PESTEL a. Political – EU is protective of the German wine manufacturer where i t subsidizes the industry. The residue of the George Marshall fund serves as financing assistance to wine manufacturers such as Fitz-Ritter which could help ease the financing of its expansion should the company decide to expand its operation. b. Economic – competitors are flooding the EU market with comparable wines at a lower price which is devastating to the industry. c. Social – there is growing market for the Fitz-Ritter’s wines especially for middle class who would like to partake the wine to have the feeling of being in the upper class. d. Technological – Johann is embarking on the training of his employees to upgrade their technological capability to further improve their wine making. e. Environmental – acreage for growing grapes in Germany has already been allocated. Its implication makes the wine industry less competitive because it meant they have to squeeze more wine from the grape to lower the price which has a devastating effect on qu ality. f. Legal – EU government is on Germany’s wine makers side being protective of the industry from the foreign competition. Fitz-Ritter’s strategy is basically to promote the quality of the product by stressing its history and tradition; that it is a product of craftsmanship not by industrial process. This way, Johann is able to have a niche in the market. 2) What is Fitz- Ritter’s competitive advantage? How did the company manage to survive in a highly competitive wine business? To better determine Fitz-Ritter’s competitive advantage, it would be helpful to consider Porter’s Five Forces of competition to see how it fared in the highly competitive wine business. a. Threat of New Entrants – players from the New World are indeed a threat. They have comparable wines with lower prices. b. Determinants of Supplier Power – Fitz-Ritter grows their own grape and makes their own wine and such, suppliers has very little leverage on t he company. c. Rivalry Among Existing Firms – there may be rivalry among the old wine makers in Germany and EU but the rivalry is not considered to be disastrous to the industry. The threat of rivalry is being brought by new players from the New World instead of the old wine makers. d. Determinants of Buyer Power – Fitz-Ritter use exclusive distributor in the United States whom they can trust and Johann’s mother help in the promotional aspect of the product by giving the product’s comparative advantage which is tradition, quality and history a face whom the customers can