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Willamette Valley Vineyards Business Strategy Capstone Spring 2011
Mission/ Strategic Intent <ul><li>Mission  ( www.wvv.com) </li></ul><ul><ul><li>“ Our mission is to create elegant, classi...
External Environment <ul><li>Economic  </li></ul><ul><ul><li>Dollar weakening against Euro </li></ul></ul><ul><ul><li>Dome...
External Environment <ul><li>Demographic </li></ul><ul><ul><li>Gen X and Boomers </li></ul></ul><ul><ul><li>Millennials </...
External Environment <ul><li>Industry </li></ul><ul><ul><li>Unfavorable </li></ul></ul><ul><ul><ul><li>Threat of Entrants ...
External Environment Conclusions <ul><li>Threats </li></ul><ul><ul><li>Competition </li></ul></ul><ul><li>Opportunities </...
Internal Environment <ul><li>Vineyard acreage </li></ul><ul><ul><li>Leased </li></ul></ul><ul><ul><li>Owned </li></ul></ul...
Internal Environment Conclusions <ul><li>Strengths </li></ul><ul><ul><li>Location </li></ul></ul><ul><ul><li>Distribution ...
Strategy Formulation <ul><li>Business Level Strategy </li></ul><ul><ul><li>Distinct mission for each label </li></ul></ul>...
Strategy Formulation <ul><li>Competitive Rivalry and Dynamics  </li></ul><ul><ul><li>Scope can include non-alcoholics </li...
Strategy Formulation <ul><li>Corporate Level Strategy </li></ul><ul><ul><li>Multi-channel sales </li></ul></ul><ul><ul><li...
Strategy Formulation <ul><li>International Strategy </li></ul><ul><ul><li>No presence </li></ul></ul><ul><ul><li>Plans to ...
Strategy Formulation Conclusions <ul><li>Strategy has yielded significant market share </li></ul><ul><li>Opportunities exi...
Strategy Implementation <ul><li>Corporate Governance </li></ul><ul><ul><li>Board insiders (3) </li></ul></ul><ul><ul><li>S...
Strategy Implementation <ul><li>Organizational Structure/Controls </li></ul><ul><ul><li>Diversification through labels and...
Strategy Implementation Conclusions <ul><li>Balanced and stable </li></ul><ul><ul><li>Publicly traded vs. centrally contro...
Competitive Analysis <ul><li>Advantages  </li></ul><ul><ul><li>Quality pinot noir focus </li></ul></ul><ul><ul><ul><li>Siz...
Above Average Returns?
Recommendation <ul><li>Focus on Oregon market share </li></ul><ul><ul><li>Growth with existing resources </li></ul></ul><u...
 
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Willamette valley vineyards final

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Strategic Management Capstone Project - WVV

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Willamette valley vineyards final

  1. 1. Willamette Valley Vineyards Business Strategy Capstone Spring 2011
  2. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 18. Above Average Returns?
  19. 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>

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