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Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
Willamette valley vineyards final
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Willamette valley vineyards final

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Strategic Management Capstone Project - WVV

Strategic Management Capstone Project - WVV

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  • 1. Willamette Valley Vineyards Business Strategy Capstone Spring 2011
  • 2. Mission/ Strategic Intent <ul><li>Mission ( www.wvv.com) </li></ul><ul><ul><li>“ Our mission is to create elegant, classic Oregon wines from the Willamette Valley Appellation while serving as stewards of the land.” </li></ul></ul><ul><ul><li>-Jim Bernau, Founder/President </li></ul></ul><ul><li>Strategic Intent </li></ul><ul><ul><li>High quality grapes </li></ul></ul><ul><ul><li>Premium, super premium and ultra premium wines </li></ul></ul><ul><ul><li>Oregon, National and International growth </li></ul></ul><ul><ul><li>Strong distribution Channel </li></ul></ul>
  • 3. External Environment <ul><li>Economic </li></ul><ul><ul><li>Dollar weakening against Euro </li></ul></ul><ul><ul><li>Domestic consumption growth </li></ul></ul><ul><li>Socio-cultural </li></ul><ul><ul><li>2004 movie “Sideways” </li></ul></ul><ul><li>Global </li></ul><ul><ul><li>Oregon Exports </li></ul></ul><ul><ul><ul><li>Current </li></ul></ul></ul><ul><ul><ul><ul><li>Canada </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Japan </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Asia outside Japan and South Korea </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Others </li></ul></ul></ul></ul><ul><ul><ul><li>Opportunity: China </li></ul></ul></ul>
  • 4. External Environment <ul><li>Demographic </li></ul><ul><ul><li>Gen X and Boomers </li></ul></ul><ul><ul><li>Millennials </li></ul></ul><ul><ul><li>Hispanics </li></ul></ul><ul><li>Political/Legal </li></ul><ul><ul><li>US history of regulation </li></ul></ul><ul><ul><li>Significant tax increases under consideration </li></ul></ul><ul><ul><li>Effect on Oregon’s wine industry </li></ul></ul><ul><li>Agriculture focus </li></ul><ul><ul><li>Rainfall patterns </li></ul></ul><ul><ul><li>Phylloxera </li></ul></ul>
  • 5. External Environment <ul><li>Industry </li></ul><ul><ul><li>Unfavorable </li></ul></ul><ul><ul><ul><li>Threat of Entrants </li></ul></ul></ul><ul><ul><ul><li>Substitutes </li></ul></ul></ul><ul><ul><ul><li>Intensity of Rivalry </li></ul></ul></ul><ul><ul><li>Favorable </li></ul></ul><ul><ul><ul><li>Supplier Power </li></ul></ul></ul><ul><ul><ul><li>Buyer Power </li></ul></ul></ul><ul><li>Competitors </li></ul><ul><ul><li>International </li></ul></ul><ul><ul><li>Domestic outside Oregon </li></ul></ul><ul><ul><li>Oregon </li></ul></ul><ul><ul><li>Status as a publicly traded company </li></ul></ul>
  • 6. External Environment Conclusions <ul><li>Threats </li></ul><ul><ul><li>Competition </li></ul></ul><ul><li>Opportunities </li></ul><ul><ul><li>International </li></ul></ul><ul><ul><ul><li>Asia </li></ul></ul></ul><ul><ul><ul><li>Northern Europe </li></ul></ul></ul><ul><ul><li>Demographic </li></ul></ul><ul><ul><ul><li>Hispanics </li></ul></ul></ul><ul><ul><ul><li>Millenials </li></ul></ul></ul>
  • 7. Internal Environment <ul><li>Vineyard acreage </li></ul><ul><ul><li>Leased </li></ul></ul><ul><ul><li>Owned </li></ul></ul><ul><li>Contracts </li></ul><ul><li>Location </li></ul><ul><ul><li>Quality of wine </li></ul></ul><ul><ul><li>Direct to consumer sales </li></ul></ul><ul><li>Labels </li></ul><ul><ul><li>Willamette Valley Vineyards </li></ul></ul><ul><ul><li>Made in Oregon Cellars </li></ul></ul><ul><ul><li>Tualatin Estates Vineyards </li></ul></ul><ul><ul><li>Griffin Creek </li></ul></ul><ul><li>Distinct mission for each label </li></ul>
  • 8. Internal Environment Conclusions <ul><li>Strengths </li></ul><ul><ul><li>Location </li></ul></ul><ul><ul><li>Distribution </li></ul></ul><ul><li>Weaknesses </li></ul><ul><ul><li>Core Competencies </li></ul></ul>
  • 9. Strategy Formulation <ul><li>Business Level Strategy </li></ul><ul><ul><li>Distinct mission for each label </li></ul></ul><ul><ul><li>Brand building </li></ul></ul><ul><ul><ul><li>Wine competitions </li></ul></ul></ul><ul><ul><ul><li>Ratings </li></ul></ul></ul><ul><ul><ul><li>Premium to ultra-premium pricing </li></ul></ul></ul>
  • 10. Strategy Formulation <ul><li>Competitive Rivalry and Dynamics </li></ul><ul><ul><li>Scope can include non-alcoholics </li></ul></ul><ul><ul><li>California dominance </li></ul></ul><ul><ul><li>Lack of dominance in Oregon </li></ul></ul><ul><ul><li>Competitive Factors </li></ul></ul><ul><ul><ul><li>Quality </li></ul></ul></ul><ul><ul><ul><li>Price </li></ul></ul></ul><ul><ul><ul><li>Label recognition </li></ul></ul></ul><ul><ul><ul><li>Supply </li></ul></ul></ul>
  • 11. Strategy Formulation <ul><li>Corporate Level Strategy </li></ul><ul><ul><li>Multi-channel sales </li></ul></ul><ul><ul><li>I-5 Corridor Location </li></ul></ul><ul><ul><li>Constant effort to expand – seeking economies of scale </li></ul></ul><ul><ul><li>Consumer ownership </li></ul></ul><ul><li>Acquisition and Restructuring </li></ul><ul><ul><li>Inventory shortages spurring need for growth </li></ul></ul><ul><ul><li>Loans to growers </li></ul></ul><ul><ul><li>Elton vineyards lease </li></ul></ul>
  • 12. Strategy Formulation <ul><li>International Strategy </li></ul><ul><ul><li>No presence </li></ul></ul><ul><ul><li>Plans to eventually compete internationally </li></ul></ul><ul><li>Cooperative Strategy </li></ul><ul><ul><li>Distribution partnerships </li></ul></ul><ul><ul><ul><li>Where direct sales are too costly </li></ul></ul></ul><ul><ul><li>Local vineyard cooperation </li></ul></ul><ul><ul><ul><li>Loans </li></ul></ul></ul><ul><ul><ul><li>Leases </li></ul></ul></ul><ul><ul><ul><li>Partnerships </li></ul></ul></ul>
  • 13. Strategy Formulation Conclusions <ul><li>Strategy has yielded significant market share </li></ul><ul><li>Opportunities exist as demonstrated by </li></ul><ul><ul><li>Distribution </li></ul></ul><ul><ul><li>Education of Wine Consumers </li></ul></ul><ul><ul><li>Leveraging Location and Political Prestige </li></ul></ul><ul><ul><li>Inventory Shortage </li></ul></ul><ul><ul><li>Strategy Outside Oregon </li></ul></ul>
  • 14. Strategy Implementation <ul><li>Corporate Governance </li></ul><ul><ul><li>Board insiders (3) </li></ul></ul><ul><ul><li>Shareholder makeup </li></ul></ul><ul><ul><ul><li>24% insiders </li></ul></ul></ul><ul><ul><ul><li>5% owners </li></ul></ul></ul><ul><ul><ul><li>10% institutional/mutual fund </li></ul></ul></ul><ul><ul><li>CEO compensation </li></ul></ul><ul><ul><ul><li>Low </li></ul></ul></ul>
  • 15. Strategy Implementation <ul><li>Organizational Structure/Controls </li></ul><ul><ul><li>Diversification through labels and price </li></ul></ul><ul><ul><li>9 executives, 75 FTEs </li></ul></ul><ul><ul><li>Multi-divisional structure </li></ul></ul><ul><ul><ul><li>Label independence </li></ul></ul></ul><ul><ul><ul><li>Encouragement of entrepreneurial approach </li></ul></ul></ul><ul><ul><li>Focus on sustainability and stewardship </li></ul></ul>
  • 16. Strategy Implementation Conclusions <ul><li>Balanced and stable </li></ul><ul><ul><li>Publicly traded vs. centrally controlled </li></ul></ul><ul><ul><li>Delegation vs. central resources </li></ul></ul><ul><ul><li>Label independence facilitates acquisitions </li></ul></ul>
  • 17. Competitive Analysis <ul><li>Advantages </li></ul><ul><ul><li>Quality pinot noir focus </li></ul></ul><ul><ul><ul><li>Size advantage </li></ul></ul></ul><ul><ul><li>Endorsements </li></ul></ul><ul><li>Challenges </li></ul><ul><ul><li>Differentiation </li></ul></ul><ul><ul><li>National and International boundaries </li></ul></ul><ul><ul><li>Growth within Oregon </li></ul></ul><ul><li>Distinguishing Tactics </li></ul><ul><ul><li>Truffles </li></ul></ul><ul><ul><li>Keg wines </li></ul></ul>
  • 18. Above Average Returns?
  • 19. Recommendation <ul><li>Focus on Oregon market share </li></ul><ul><ul><li>Growth with existing resources </li></ul></ul><ul><ul><li>Strategic acquisitions </li></ul></ul><ul><ul><li>Continue shaping policies favorable to Oregon wines </li></ul></ul><ul><li>Communication to prospective segments </li></ul><ul><ul><li>Millennials </li></ul></ul><ul><li>Expanded Marketing </li></ul><ul><ul><li>Restructure to further centralize </li></ul></ul><ul><li>Restaurant sales </li></ul>
  • 20.  

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