The Champagne industry faces challenges from economic uncertainty in Europe and currency issues in emerging markets that are impacting sales. However, the report outlines opportunities for future growth in new markets like China, India, and Nigeria over the next 10 years as wealth increases in these regions. The supply chain and emerging markets will play a large role in the future success of the Champagne industry.
Argentine economic depression was a major downturn in Argentina's economy. It began in 1999 with a decrease of real Gross Domestic Product (GDP). The crisis caused the fall of the government, default on the country's foreign debt, widespread unemployment, riots, the rise of alternative currencies and the end of the peso's fixed exchange rate to the US dollar.
By 2002 GDP growth had returned, surprising economists and the business media.
The Mexican Tequila Crisis of 1994 was triggered by a combination of economic and political factors that undermined confidence in the peso. Rising inflation, a growing current account deficit, and high levels of short-term foreign investment made Mexico's economy vulnerable. Political instability in 1994, including assassinations, further shook confidence. As investors withdrew funds from Mexico that year, the peso was devalued and interest rates rose, causing a recession. The crisis was resolved through IMF and US bailouts totaling $50 billion and Mexico's adoption of austerity measures.
The document provides background information on Greece's economic crisis. It discusses how Greece accumulated large amounts of debt over time due to high government spending, a large public sector workforce, complex taxation systems that encouraged widespread tax evasion, and a culture where citizens did not feel obligated to pay high taxes due to inefficient public services. Entering the EU and adopting the euro exacerbated economic issues, as Greece could no longer use currency devaluation to promote competitiveness. Austerity measures imposed in response to debt crisis further worsened the economy.
Pakistan's exchange rate volatility.../Arshad Ahmed SaeedArshad Ahmed Saeed
The document analyzes the 20-year exchange rate trend of the Pakistani rupee from 1994 to 2013. It finds that the rupee depreciated over 700% against the US dollar over this period, continuously losing value. The exchange rate rose from 1994 to 2001, then declined until mid-2007 before dramatically increasing thereafter due to rising oil prices and political instability. This collapse of the rupee led to a 59.5 billion rupee increase in external debt due to unfavorable exchange rate movements since 2007-2008. A $6.6 billion IMF loan provides some relief but will increase costs for the private sector through higher interest rates required by IMF conditions.
This document provides an economic analysis and overview of Mexico presented by Group 8. It discusses Mexico's economic timeline from the 1930s to present, highlighting periods of growth and crisis. It also covers Mexico's country overview, impact of NAFTA, key macroeconomic indicators like GDP, and current challenges facing Mexico's economy like corruption and slow reform. The analysis aims to present Mexico's economic development and performance over time as well as ongoing issues.
The document provides an overview of the Argentine economic crisis from 1999-2002. It discusses key factors that contributed to the crisis, including high government debt levels, tax increases that reduced business confidence, and a decline in exports following the devaluation of Brazil's currency. During this period, Argentina experienced a recession with GDP falling significantly each year, high inflation, increasing unemployment, and a "run on the banks" as people lost confidence. The crisis peaked in 2002 with inflation reaching 41% and poverty rates rising to 58%. To recover, Argentina abandoned its currency peg and let the peso float, boosting exports and reducing imports.
The document summarizes the Eurozone crisis, including its causes and potential outcomes and solutions. It discusses how countries like Greece, Portugal and Ireland accumulated large fiscal and trade deficits within the Eurozone, unable to devalue their currencies. This led to a sovereign debt crisis threatening the entire Eurozone. Proposed solutions included bailouts with austerity measures, new stabilization funds, and moves toward greater fiscal and political integration among Eurozone members.
Argentine economic depression was a major downturn in Argentina's economy. It began in 1999 with a decrease of real Gross Domestic Product (GDP). The crisis caused the fall of the government, default on the country's foreign debt, widespread unemployment, riots, the rise of alternative currencies and the end of the peso's fixed exchange rate to the US dollar.
By 2002 GDP growth had returned, surprising economists and the business media.
The Mexican Tequila Crisis of 1994 was triggered by a combination of economic and political factors that undermined confidence in the peso. Rising inflation, a growing current account deficit, and high levels of short-term foreign investment made Mexico's economy vulnerable. Political instability in 1994, including assassinations, further shook confidence. As investors withdrew funds from Mexico that year, the peso was devalued and interest rates rose, causing a recession. The crisis was resolved through IMF and US bailouts totaling $50 billion and Mexico's adoption of austerity measures.
The document provides background information on Greece's economic crisis. It discusses how Greece accumulated large amounts of debt over time due to high government spending, a large public sector workforce, complex taxation systems that encouraged widespread tax evasion, and a culture where citizens did not feel obligated to pay high taxes due to inefficient public services. Entering the EU and adopting the euro exacerbated economic issues, as Greece could no longer use currency devaluation to promote competitiveness. Austerity measures imposed in response to debt crisis further worsened the economy.
Pakistan's exchange rate volatility.../Arshad Ahmed SaeedArshad Ahmed Saeed
The document analyzes the 20-year exchange rate trend of the Pakistani rupee from 1994 to 2013. It finds that the rupee depreciated over 700% against the US dollar over this period, continuously losing value. The exchange rate rose from 1994 to 2001, then declined until mid-2007 before dramatically increasing thereafter due to rising oil prices and political instability. This collapse of the rupee led to a 59.5 billion rupee increase in external debt due to unfavorable exchange rate movements since 2007-2008. A $6.6 billion IMF loan provides some relief but will increase costs for the private sector through higher interest rates required by IMF conditions.
This document provides an economic analysis and overview of Mexico presented by Group 8. It discusses Mexico's economic timeline from the 1930s to present, highlighting periods of growth and crisis. It also covers Mexico's country overview, impact of NAFTA, key macroeconomic indicators like GDP, and current challenges facing Mexico's economy like corruption and slow reform. The analysis aims to present Mexico's economic development and performance over time as well as ongoing issues.
The document provides an overview of the Argentine economic crisis from 1999-2002. It discusses key factors that contributed to the crisis, including high government debt levels, tax increases that reduced business confidence, and a decline in exports following the devaluation of Brazil's currency. During this period, Argentina experienced a recession with GDP falling significantly each year, high inflation, increasing unemployment, and a "run on the banks" as people lost confidence. The crisis peaked in 2002 with inflation reaching 41% and poverty rates rising to 58%. To recover, Argentina abandoned its currency peg and let the peso float, boosting exports and reducing imports.
The document summarizes the Eurozone crisis, including its causes and potential outcomes and solutions. It discusses how countries like Greece, Portugal and Ireland accumulated large fiscal and trade deficits within the Eurozone, unable to devalue their currencies. This led to a sovereign debt crisis threatening the entire Eurozone. Proposed solutions included bailouts with austerity measures, new stabilization funds, and moves toward greater fiscal and political integration among Eurozone members.
The document discusses the impact of the global financial crisis on Japan's economy from 2007-2009. It led to rising inflation, bankruptcies, and unemployment. GDP declined sharply and the trade balance shifted to a deficit. The Bank of Japan adopted negative interest rates and bond purchases to stimulate lending and growth, while the government implemented large stimulus packages. By late 2009, exports and production began increasing again, aided by economic recovery overseas and public investments from stimulus funds.
The issue of Foreign Direct Investment (FDI) has been receiving phenomenal attention from many governments. Bangladesh is not lagging behind from it. Economic development for the developing countries like Bangladesh is largely dependent on FDI. The major challenges for the host country are to ensure an eye-catching and conducive investment climate to foreign investors for FDI inflow. In recent years, Bangladesh has been devoting efforts for attracting FDI offering a lot of lucrative incentives and benefits. Though attempts taken to increase FDI inflow, the result achieved is not appreciable enough for Bangladesh. This term paper will portray the FDI inflow since 1995 and finds out causes and reasons of low-inflow based on data available in web. Here different indices have been shown graphically which have substantial impact on investment decision of foreign investors. Recent indices are illustrated and briefly analyzed here collected from Doing Business Report 2011, Human Development Report 2010, Bangladesh Economic Review 2011, Major economic indicators: monthly update (volume 06/2010), Bangladesh Bank and Global Competitiveness Report by Center for Policy Dialogue. Export data and information on EPZs have also been stated here importantly. Incentives for foreign investors offered by Bangladesh Government and competitive advantages of doing business in Bangladesh are two very important parts stated in this paper. It also finds out the impediments and highlighted prospects for FDI in Bangladesh and provides some recommendations for its enhancements.
The document provides a detailed timeline of major financial crises from the 3rd century to the 21st century. It then discusses the causes and impacts of the late 2000s Global Financial Crisis, including the subprime mortgage crisis in the United States, the plummeting of stock markets and housing prices globally, and increased unemployment and poverty worldwide. Key factors that contributed to the crisis are identified as deregulation of financial markets, complex financial innovations, low interest rates, and risky lending practices like subprime mortgages.
The document compares Coke and Pepsi from 2000 to 2005. It discusses key facts about each company's management, sales, mistakes made, focus on carbonated vs. non-carbonated drinks, and marketing campaigns during this period. Pepsi focused on acquiring brands like Tropicana and Gatorade under CEO Roger Enrico, while Coke struggled after raising syrup prices and focusing only on carbonated drinks until a new CEO shifted strategy in 2000.
France has a long history with the franc currency. The franc was introduced in 1795 to replace unstable currencies during the French Revolution. It later became adopted by other countries. France has a population of 65.1 million with Paris as its capital. It has a mixed economy that is the 5th largest in the world. Key sectors include services, industry, and agriculture.
Oil prices are measured in US Dollars. As USA is the biggest importer of oil, Saudi Arabia agreed to sell all of their oil in US Dollars only because if USA stopped importing oil, oil prices would crash, thus slashing a huge source of Saudi Arabia’s income.
The 1994 Mexican Peso crisis occurred when the Mexican peso devalued by 14% against the US dollar. This was caused by Mexico's lax monetary policy, overvalued exchange rate, large current account deficit of 8% GDP, high proportion of short-term government debt held by non-residents, and political issues. The peso devaluation spread to other Latin American and Asian markets as fund managers liquidated investments due to fears of losses. Mexico received a $50 billion financial bailout package from the US, IMF, and other countries to restore stability and regain investor confidence. The crisis showed the need for multinational safety nets and that excessive reliance on foreign capital to finance development can have downsides.
This document provides an overview of Argentina's economic crisis from 1998-2002 in 3 pages. It discusses the causes of the crisis, including Argentina's fixed exchange rate regime pegged to the US dollar which led to an overvalued currency. This overvaluation hurt exports and increased imports and the current account deficit. The document also notes Argentina's reliance on IMF support and how the crisis manifested as an economic recession, external sovereign debt crisis, and domestic banking crisis. Key decisions by the government to seek IMF assistance and later restructure debts exacerbated the crisis.
International accounting development and classification (ch2)Mohammed Alashi
This document discusses factors that influence accounting development and classifications of accounting approaches. It identifies eight factors that influence accounting development: sources of finance, legal system, taxation, political/economic ties, inflation, economic development level, education level, and culture. It also describes four approaches to accounting development found in Western market economies: the macroeconomic approach, microeconomic approach, independent discipline approach, and uniform approach. Finally, it explains the differences between fair presentation and legal compliance orientations of accounting.
This document discusses factors that influence international trade flows. It begins by outlining the key components of the balance of payments and objectives of the chapter. It then explains the balance of payments statement in detail, including the current account, financial account, and capital account. It also discusses the growth of international trade over time due to events reducing trade barriers. Finally, it outlines several factors that can influence trade flows, such as cost of labor, inflation, government policies, and exchange rates.
The Mexican peso crisis of 1994 resulted from a sudden devaluation of the peso by 50% in December 1994, triggering a severe recession. Mexico had pursued economic reforms and joined NAFTA but still had a fixed exchange rate, large current account deficit, and government debt denominated in dollars rather than pesos. When political assassinations increased uncertainty, investors fled Mexico rapidly, depleting reserves and forcing further peso devaluations that caused a financial crisis and economic contraction. The U.S. intervened with a $50 billion bailout package that restored stability.
The Pakistani rupee has significantly devalued against the US dollar in recent years, reaching its lowest point historically in May 2019. This devaluation is worsening Pakistan's already struggling economy by increasing the cost of imports and debt repayments. Multiple domestic economic issues are contributing to the rupee's decline, including large trade deficits, over-reliance on foreign aid, and political/security instability. While devaluation could boost exports in the long run, it is increasing inflation in the short term and hurting Pakistan's import-focused economy. The government and IMF are implementing measures to stabilize the currency, but Pakistan faces a difficult economic situation without long-term reforms.
This document provides background information on Mexico's economy from 1940-1994. It discusses Mexico's period of strong growth from 1940-1970 known as the "Mexican Miracle" driven by policies like education investment and import substitution. However, the economy slowed in the 1970s and faced a debt crisis in the 1980s as oil prices fell and interest rates rose globally. In 1994, Mexico had a currency crisis as the peso was devalued against the dollar, plunging the economy into recession. The document analyzes factors like overvaluation of the peso and high interest rates that contributed to Mexico's economic struggles.
Este documento consolida o contrato social de uma empresa com três sócios. O documento define o nome da empresa, seu objeto social (comércio de cereais e alimentos), capital social dividido em cotas, responsabilidade limitada dos sócios, gestão conjunta pelos três sócios, duração indeterminada da sociedade, distribuição de lucros, e dissolução apenas após o falecimento de todos os sócios.
Solution to problems on page 175 of multinational financial management by sha...GAURAV SHARMA
The document contains solutions to 5 questions regarding international finance concepts like purchasing power parity, interest rate parity, and the Fisher effect.
Question 1 involves using PPP to calculate the expected exchange rate between the dollar and yen given price level data from 2000 to 2003, with the actual 2003 rate higher possibly due to differences in price indices or investor preferences.
Question 2 uses interest rate parity to find the spot $:£ exchange rate balancing wheat prices in the US and UK, and then calculates the 1-year forward rate based on expected future prices.
Question 3 applies the Fisher effect formula to find the nominal interest rate given expected inflation of 100% and a real rate of 5%.
Questions 4 and
Foreign exchange reserves are foreign currency deposits held by central banks. They allow countries to maintain exchange rates and stabilize currencies. Historically, the Bretton Woods system tied currencies to gold and foreign exchange reserves, but this collapsed. Now, central banks use reserves to influence currency values and support domestic monetary policies. The top reserve currencies are the US dollar, euro, yen, and pound sterling. Foreign exchange reserves boost investor confidence and help countries manage debt and economic crises. China has the largest reserves at over $3 trillion. Pakistan currently holds $8.4 billion in reserves.
Chapter2 International Finance ManagementPiyush Gaur
1. The document provides answers and explanations to questions about international monetary systems, including Gresham's Law, the gold standard, the Bretton Woods system, and exchange rate regimes.
2. It also answers questions about the European Monetary System, special drawing rights, criteria for a good international monetary system, and the prospects of the euro becoming a global reserve currency.
3. The final part presents a mini case about the potential for the United Kingdom to adopt the euro.
A pénz időértéke
- A pénz jövőértékét befolyásoló tényezők
- Jövőbeli bevétel mai értékének meghatározói
- Jelen és jövőérték számítás
- Speciális pénzáramok és számításuk
Every month, Atradius brings you an up to the minute snapshot report on a range of export markets and key trade sectors. Our underwriters have a specialist view of the world economy – and the
industries that make that economy tick - that you won’t find in the general press coverage of events.
Even more importantly, our underwriters use their expertise and experience to look to the future. In each edition of Atradius Market Monitor you’ll find our outlook for a number of key market economies.
In this issue…
…we feature the following markets:
The United Kingdom – with a spotlight on the metals and automotive sectors
Mexico – with a spotlight on manufacturing, construction and retail
Germany
Spain
Denmark
Greece
Portugal
South Africa
The document provides an overview of the state of the global economy, discussing challenges facing major economies like the US, Japan, China, Eurozone countries, and others. It notes that 75% of global economies are still contracting, and recovery is uncertain and uneven. Several countries like Greece, Spain, and Dubai are facing severe debt crises that could further impact the fragile global economic recovery. It also discusses issues of poverty, inequality, and uneven development within large emerging economies like India.
The document discusses the impact of the global financial crisis on Japan's economy from 2007-2009. It led to rising inflation, bankruptcies, and unemployment. GDP declined sharply and the trade balance shifted to a deficit. The Bank of Japan adopted negative interest rates and bond purchases to stimulate lending and growth, while the government implemented large stimulus packages. By late 2009, exports and production began increasing again, aided by economic recovery overseas and public investments from stimulus funds.
The issue of Foreign Direct Investment (FDI) has been receiving phenomenal attention from many governments. Bangladesh is not lagging behind from it. Economic development for the developing countries like Bangladesh is largely dependent on FDI. The major challenges for the host country are to ensure an eye-catching and conducive investment climate to foreign investors for FDI inflow. In recent years, Bangladesh has been devoting efforts for attracting FDI offering a lot of lucrative incentives and benefits. Though attempts taken to increase FDI inflow, the result achieved is not appreciable enough for Bangladesh. This term paper will portray the FDI inflow since 1995 and finds out causes and reasons of low-inflow based on data available in web. Here different indices have been shown graphically which have substantial impact on investment decision of foreign investors. Recent indices are illustrated and briefly analyzed here collected from Doing Business Report 2011, Human Development Report 2010, Bangladesh Economic Review 2011, Major economic indicators: monthly update (volume 06/2010), Bangladesh Bank and Global Competitiveness Report by Center for Policy Dialogue. Export data and information on EPZs have also been stated here importantly. Incentives for foreign investors offered by Bangladesh Government and competitive advantages of doing business in Bangladesh are two very important parts stated in this paper. It also finds out the impediments and highlighted prospects for FDI in Bangladesh and provides some recommendations for its enhancements.
The document provides a detailed timeline of major financial crises from the 3rd century to the 21st century. It then discusses the causes and impacts of the late 2000s Global Financial Crisis, including the subprime mortgage crisis in the United States, the plummeting of stock markets and housing prices globally, and increased unemployment and poverty worldwide. Key factors that contributed to the crisis are identified as deregulation of financial markets, complex financial innovations, low interest rates, and risky lending practices like subprime mortgages.
The document compares Coke and Pepsi from 2000 to 2005. It discusses key facts about each company's management, sales, mistakes made, focus on carbonated vs. non-carbonated drinks, and marketing campaigns during this period. Pepsi focused on acquiring brands like Tropicana and Gatorade under CEO Roger Enrico, while Coke struggled after raising syrup prices and focusing only on carbonated drinks until a new CEO shifted strategy in 2000.
France has a long history with the franc currency. The franc was introduced in 1795 to replace unstable currencies during the French Revolution. It later became adopted by other countries. France has a population of 65.1 million with Paris as its capital. It has a mixed economy that is the 5th largest in the world. Key sectors include services, industry, and agriculture.
Oil prices are measured in US Dollars. As USA is the biggest importer of oil, Saudi Arabia agreed to sell all of their oil in US Dollars only because if USA stopped importing oil, oil prices would crash, thus slashing a huge source of Saudi Arabia’s income.
The 1994 Mexican Peso crisis occurred when the Mexican peso devalued by 14% against the US dollar. This was caused by Mexico's lax monetary policy, overvalued exchange rate, large current account deficit of 8% GDP, high proportion of short-term government debt held by non-residents, and political issues. The peso devaluation spread to other Latin American and Asian markets as fund managers liquidated investments due to fears of losses. Mexico received a $50 billion financial bailout package from the US, IMF, and other countries to restore stability and regain investor confidence. The crisis showed the need for multinational safety nets and that excessive reliance on foreign capital to finance development can have downsides.
This document provides an overview of Argentina's economic crisis from 1998-2002 in 3 pages. It discusses the causes of the crisis, including Argentina's fixed exchange rate regime pegged to the US dollar which led to an overvalued currency. This overvaluation hurt exports and increased imports and the current account deficit. The document also notes Argentina's reliance on IMF support and how the crisis manifested as an economic recession, external sovereign debt crisis, and domestic banking crisis. Key decisions by the government to seek IMF assistance and later restructure debts exacerbated the crisis.
International accounting development and classification (ch2)Mohammed Alashi
This document discusses factors that influence accounting development and classifications of accounting approaches. It identifies eight factors that influence accounting development: sources of finance, legal system, taxation, political/economic ties, inflation, economic development level, education level, and culture. It also describes four approaches to accounting development found in Western market economies: the macroeconomic approach, microeconomic approach, independent discipline approach, and uniform approach. Finally, it explains the differences between fair presentation and legal compliance orientations of accounting.
This document discusses factors that influence international trade flows. It begins by outlining the key components of the balance of payments and objectives of the chapter. It then explains the balance of payments statement in detail, including the current account, financial account, and capital account. It also discusses the growth of international trade over time due to events reducing trade barriers. Finally, it outlines several factors that can influence trade flows, such as cost of labor, inflation, government policies, and exchange rates.
The Mexican peso crisis of 1994 resulted from a sudden devaluation of the peso by 50% in December 1994, triggering a severe recession. Mexico had pursued economic reforms and joined NAFTA but still had a fixed exchange rate, large current account deficit, and government debt denominated in dollars rather than pesos. When political assassinations increased uncertainty, investors fled Mexico rapidly, depleting reserves and forcing further peso devaluations that caused a financial crisis and economic contraction. The U.S. intervened with a $50 billion bailout package that restored stability.
The Pakistani rupee has significantly devalued against the US dollar in recent years, reaching its lowest point historically in May 2019. This devaluation is worsening Pakistan's already struggling economy by increasing the cost of imports and debt repayments. Multiple domestic economic issues are contributing to the rupee's decline, including large trade deficits, over-reliance on foreign aid, and political/security instability. While devaluation could boost exports in the long run, it is increasing inflation in the short term and hurting Pakistan's import-focused economy. The government and IMF are implementing measures to stabilize the currency, but Pakistan faces a difficult economic situation without long-term reforms.
This document provides background information on Mexico's economy from 1940-1994. It discusses Mexico's period of strong growth from 1940-1970 known as the "Mexican Miracle" driven by policies like education investment and import substitution. However, the economy slowed in the 1970s and faced a debt crisis in the 1980s as oil prices fell and interest rates rose globally. In 1994, Mexico had a currency crisis as the peso was devalued against the dollar, plunging the economy into recession. The document analyzes factors like overvaluation of the peso and high interest rates that contributed to Mexico's economic struggles.
Este documento consolida o contrato social de uma empresa com três sócios. O documento define o nome da empresa, seu objeto social (comércio de cereais e alimentos), capital social dividido em cotas, responsabilidade limitada dos sócios, gestão conjunta pelos três sócios, duração indeterminada da sociedade, distribuição de lucros, e dissolução apenas após o falecimento de todos os sócios.
Solution to problems on page 175 of multinational financial management by sha...GAURAV SHARMA
The document contains solutions to 5 questions regarding international finance concepts like purchasing power parity, interest rate parity, and the Fisher effect.
Question 1 involves using PPP to calculate the expected exchange rate between the dollar and yen given price level data from 2000 to 2003, with the actual 2003 rate higher possibly due to differences in price indices or investor preferences.
Question 2 uses interest rate parity to find the spot $:£ exchange rate balancing wheat prices in the US and UK, and then calculates the 1-year forward rate based on expected future prices.
Question 3 applies the Fisher effect formula to find the nominal interest rate given expected inflation of 100% and a real rate of 5%.
Questions 4 and
Foreign exchange reserves are foreign currency deposits held by central banks. They allow countries to maintain exchange rates and stabilize currencies. Historically, the Bretton Woods system tied currencies to gold and foreign exchange reserves, but this collapsed. Now, central banks use reserves to influence currency values and support domestic monetary policies. The top reserve currencies are the US dollar, euro, yen, and pound sterling. Foreign exchange reserves boost investor confidence and help countries manage debt and economic crises. China has the largest reserves at over $3 trillion. Pakistan currently holds $8.4 billion in reserves.
Chapter2 International Finance ManagementPiyush Gaur
1. The document provides answers and explanations to questions about international monetary systems, including Gresham's Law, the gold standard, the Bretton Woods system, and exchange rate regimes.
2. It also answers questions about the European Monetary System, special drawing rights, criteria for a good international monetary system, and the prospects of the euro becoming a global reserve currency.
3. The final part presents a mini case about the potential for the United Kingdom to adopt the euro.
A pénz időértéke
- A pénz jövőértékét befolyásoló tényezők
- Jövőbeli bevétel mai értékének meghatározói
- Jelen és jövőérték számítás
- Speciális pénzáramok és számításuk
Every month, Atradius brings you an up to the minute snapshot report on a range of export markets and key trade sectors. Our underwriters have a specialist view of the world economy – and the
industries that make that economy tick - that you won’t find in the general press coverage of events.
Even more importantly, our underwriters use their expertise and experience to look to the future. In each edition of Atradius Market Monitor you’ll find our outlook for a number of key market economies.
In this issue…
…we feature the following markets:
The United Kingdom – with a spotlight on the metals and automotive sectors
Mexico – with a spotlight on manufacturing, construction and retail
Germany
Spain
Denmark
Greece
Portugal
South Africa
The document provides an overview of the state of the global economy, discussing challenges facing major economies like the US, Japan, China, Eurozone countries, and others. It notes that 75% of global economies are still contracting, and recovery is uncertain and uneven. Several countries like Greece, Spain, and Dubai are facing severe debt crises that could further impact the fragile global economic recovery. It also discusses issues of poverty, inequality, and uneven development within large emerging economies like India.
The document discusses the state of European economies in January 2009 and August 2010. It summarizes that the European Commission raised its 2010 GDP growth forecasts for the EU and eurozone to 1.8% and 1.7% respectively, driven by strong export growth in Germany. However, growth is expected to slow in the second half of the year as the global economy hits a soft patch. Unemployment rates remain elevated across Europe.
The document summarizes the global economic crisis, providing details on what an economic crisis is, the history of past crises like the Great Depression, common causes of crises, and the overall effects on countries. Specific countries that were heavily impacted by the crisis are discussed, such as Argentina, Australia, Thailand, and conclusions call for reforms to the international financial system to prevent future crises.
Getting back to growth: Global powers of the consumer products industry 2011Alfred_angst
The document provides an economic outlook for 2011 for major global consumer markets and issues affecting the consumer products industry. It predicts strong overall global growth led by emerging markets. The US economy is expected to improve in 2011 due to tax cuts and monetary stimulus, but consumer spending will likely remain cautious. Growth in Western Europe will be slow due to fiscal austerity. China is expected to have a soft economic landing with steady consumer spending growth. Commodity prices and currency volatility pose challenges for global consumer companies.
The document provides an economic outlook for 2011 and discusses challenges facing the consumer products industry. It predicts stronger global growth led by emerging markets. The US economy is expected to improve due to tax cuts and monetary stimulus, but housing and debt deleveraging may constrain growth. European growth will be slow and uneven across northern and southern countries dealing with austerity measures. The consumer products industry faces a frugal "new normal" consumer and changing spending patterns across markets.
Latin america in 2015. manufacturing aces, commodity bases and basket cases ...Rishabh Tah
Latin American countries witnessed a boom in the economy between 2001 to 2011, primly because of increasing prices of commodities. However, due to recession of 2008-09 and steady fall in the prices of commodities has resulted in low to negative growth of the region. The presentation deals with the reasons behind the fall of Latin America's economy and
This document provides an economic overview and outlook for sub-Saharan Africa in three parts:
1) Economic growth has slowed in 2015-2016 due to falling commodity prices, though growth remains higher than other regions. There are large disparities between commodity exporters and importers.
2) New challenges to growth include lower commodity prices, deteriorating global financial conditions, and long-term challenges of climate change and rapid population growth.
3) Growth prospects are examined for select oil exporters, frontier economies, and individual countries like Cote d'Ivoire and Ghana, which are expected to continue robust growth despite challenges.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Signature content of MTBiz is its Article of the Month (AoM), as depicted on Cover Page of each issue, with featured focus on different issues that fall into the wide definition of Market, Business, Organization and Leadership. The AoM also covers areas on Innovation, Central Banking, Monetary Policy, National Budget, Economic Depression or Growth and Capital Market. Scale of coverage of the AoM both, global and local subject to each issue.
MTBiz is a monthly Market Review produced and distributed by Group R&D, MTB since 2009.
The document analyzes the bottled water industry in Argentina. It finds that Argentina has a growing bottled water market, dominated by large European brands. The market is concentrated among a few major players and local/regional companies. Bottled water consumption has increased significantly in recent years in Argentina. However, most production is consumed domestically as export volumes remain relatively low. The industry faces competition from substitute drinks but opportunities exist to expand in Argentina and abroad given the country's favorable economic and industry conditions.
Jameson whiskey wants to launch its brand in China. China represents a huge market opportunity due to its large and growing population and economy. While facing competition from domestic baijiu brands, the popularity of foreign spirits is increasing among younger Chinese consumers who see them as a luxury. The distribution of spirits is dominated by retail outlets like supermarkets. Jameson will need to build brand awareness through marketing and build relationships with distributors to succeed in the Chinese market.
Deloitte Report "Global Powers of Retail 2013"Oliver Grave
This document provides an economic outlook for global retailers in 2013. It discusses the challenges facing Western Europe due to the ongoing sovereign debt crisis and recession in many countries. It notes that a failure to further integrate the Eurozone economically and politically could lead to more sovereign defaults and a deeper recession. The document also summarizes the economic situation and outlook in China and the United States. For China, it describes the government's stimulus efforts to counter slowing growth and discusses longer-term challenges. For the US, it expects the economy to avoid falling off the "fiscal cliff" and to see modestly faster growth in 2013, supported by an improving housing market and consumer spending.
Shippers Warehouse, Inc. is a provider of supply chain services (3rd party logistics or 3PL). The Company operates over 4.5 million square feet in 8 facilities in the Dallas/Ft. Worth area and 500,000 square feet in Atlanta, Georgia.
The Georgia facility packaging operations ships out over 3 billion bags per year. Shippers Warehouse is one of the largest co-packers in the Southeast. Shippers operate 9 packaging lines with a ready room that is a showcase for reducing any type of foreign matter. The facility handles a variety of food products, is a leader in recycling, & distribution of products.
Shippers Warehouse, Inc. also has the distinction of having all of its locations ISO 9001:2008 certified. (ISO 9001:2008 certified by Management Certification of North America, an ANAB-accredited certification body.)
Regards,
Bill Stankiewicz
Vice President & General Manager
Shippers Warehouse
Office: 678.364.3475
williams@shipperswarehouse.com
www.shipperswarehouse.com
1) Private banking assets under management in Western Europe grew 8% in 2012, driven by a 6% gain in capital markets and 2% net inflows.
2) However, profit and revenue margins declined for the first time since 2010 amid low interest rates and increasing regulation.
3) There is growing polarization between leading and lagging private banks, with only 24% regaining pre-crisis profitability above 35 basis points.
This document describes a study that analyzed changes in wine preferences among consumers in Catalonia, Spain before and during an economic crisis. Two surveys were conducted in 2008 and 2010 using discrete choice experiments to understand preferences regarding wine attributes like origin. The results showed consumers' preferences changed during the crisis, with less heterogeneous responses. Generalized multinomial logit models were used to decompose preferences into taste and scale heterogeneity. The study aimed to provide insight into how economic and political changes impacted wine consumption in Catalonia.
Whitepaper: Latin America: Room for growthDubaiChamber
Latin America: Room for growth is an Economist Intelligence Unit (EIU) report, commissioned by Dubai Chamber. The report discusses the current economic and political climate in Latin America and explores sectors that present opportunities for economic growth—particularly trade-related infrastructure and the services sector. The findings are based on desk research and interviews with experts in the topic.
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1. The future market of Champagne for the next ten years
Abstract
This report highlights the current issues and pressures that the Champagne industry is facing. It highlights the supply chain,
independent review s, trendsand analyses and how they are linked to economic grow th and emerging markets. As a result, it
has been established that the supply chain and new emerging markets w illplay a large role in the future of Champagne.
Porter’s five forcesand the SWOT analysis technique w ere used as a test.
Introduction
Champagne w as created by French monks, w ho were the first to bottle this sparkling formof w ine. The method of making
"mousse" (another name for bubbles) in a bottle w as invented by the efforts of Frère Jean Oudart (1654 – 1742) and Dom
Pierre Pérignon (1639 – 1715), Benedictine monks and cellar masters at the respective abbeys of Saint-Pierre aux Monts de
Châlons and Saint-Pierre d’Hautvillers (Bellis, 2014).
Champagne is a sparkling w ine produced fromgrapes grown in the Champagne region of France. All sparkling w ine needs to
be produced/manufactured fromthe region follow ing specificrules and demands of the Comité Interprofessionneldu Vin de
Champagne (CIVC) w hich includes a second fermentation of the w ine in the bottle to create carbonation. The term Champagne
is used under the rules of appellation. Champagne is traditionally made fromthree types of grape; Pinot Noir, Pinot Meunier &
Chardonnay.
Champagne appellation law s only allow grapesgrownin specifically designated plots to be used in the production of
Champagne (CIVC).
The Comité Interprofessionneldu Vin de Champagne (CIVC) is a semi-public body set up under the aegis of the French
Government to co-ordinate the common interests of wine growers and producers in Champagne (the region in France). Among
its key duties are the promotion and protection of the Champagne appellation around the w orld.
The report highlights the challenges the industry faces and potentialoutcome for the next ten years.
Current Challenges
Economy
Champagne has experienced rapid industrialisation since the 1840s w ith over 21 million bottles sold, 80% of w hich have been
sold abroad (Jones 2013). How ever, 2011 saw a decline in sales of Champagne in Western Europe, and a further drop from
1% total volume decline to 2% in 2012. This dow nturn is due to the financialcarnage of the recession, despite other sparkling
w ines such as Cava and Prosecco experiencing an increased market share of 2% total value grow th forWestern Europe in
2012 and more than 6% in North America (Malandrakis, 2012).
Prosecco had been the drink of choice during times of financialausterity, but w as overtaken by Champagne for the latter half of
2013. The United Kingdom has traditionally been one of the highest importers of Champagne and 2014 is set to see a return to
form. Jean Francois Clouet, a French Champagne producer, said: “A combination of a high quality w ine with an exceptionally
high yield in 2010/2011, coupled w ith the UK economy gaining more strength means Champagne producers are forecasting a
UK export grow thof 36% in the coming year” (Stamford, 2014).
Euromonitor state that the latest research points out that the industry’s optimising for growth is unfounded and that global
Champagne volumes have actually declined by 0.4%. This serves as the first of the w arningssigns for the state of the economy
in Europe and America w here the problemlies (Malandrakis, 2013).
The Eurozone crisis has significantly impacted the Champagne market, w hich saw worldwide year on year shipments slump to
6.5% in the first half of 2012. How ever there is no forecasted economic rebound for the Champagne market before 2014 or
2015. Champagne is a reliable indication of the economy as changes in consumption are a direct measure of the economic
crisis (as seen in the Eurozone). The question of how long the crisis w illlast is therefore important - the 2008 recession was
reasonably short due to Asia propping up the w orld economy. The long term prospects of Champagne w illdepend on its ability
to adapt to future crises (Charters 2013).
The recovery since 2012 in the US has been a surprise to the Champenois, as a rise in shipments w as not predicted due to the
economic crisis. The surprise w asdue to ongoing economic challenges in the country, providing hope for Western Europe.
There is a feeling that that consumers are fed up w ith austerity, and therefore, based on these challenges, the question over
w hether brands are changing their global strategy due to new markets, both general (such as Asia) and specific (such as China
and Australia), remains potent (Woodard, 2012).
2. Uncertainty means that global investors may become pickier due to seeing emerging markets as a cluster rather than a single
asset class. The investments w illonly be made in countries that adopt reform, dismantle state monopolies and oligopolies,
boost corporate governance and allow the private sector to flourish - countries such as Mexico have proven this already. JP
Morgan’s Aserkoff advised that countries where the states actively interveneon how businessis controlled w illhave an impact
on investment. An example of this is Brazil, a country w here private enterprise is being hindered, a trait w hich can be identified
in a lot of Latin American countries in the emerging markets.
Countries are stifled by bureaucracy, with countries like India that have a paralysed government, looming elections, and an
oftentimes hostile attitude to foreign business. When comparing this to China, w here Premier Li Keqiang insists on greater
economic diversification and more consumption, less state-led investment is a positive sign. How ever, this raises alarmbells
w hen considering the city of Beijing, w here the recent mini-stimulus plan handed a capital boost to export-geared state firms.
China is actively seeking further stimulus, yet investment has only been made due to emerging markets showing good signs of
grow th. Asa result, can emerging markets process the reformneeded to sustain this trend? (Wilson, 2013)
Emerging markets, fromfrontier African states to the largest and most pow erfulof the Brics’(Brazil, Russia, India, China, and
South Africa) grouping of nations, have flourished in post-communismtimes. Despite this, no real action has been taken to
assist business growth over state interests by slashing bureaucracy and corruption or resolving currency crises. Now that
recovery is taking place in the US and Western Europe, emerging markets w illneed to address the political contentions or
global funds w illcease the developments (Wilson, 2013).
How ever, investments in these emerging markets have seen currencies increase, but this is now changing due to the recovery
of economic crises in the US according to Brazilian Finance Minister Guido Mantega, w ho assertsthat there is a currency war
taking place. “This means investors are selling emerging market currencies. Rising currencies were making these new markets
uncompetive” (Walker, 2014). This has to be balanced w ith countries that have inflation problems w hich willbe aggravated by a
falling currency, because it makes imported goods more expensive.
The effects on currency on these markets w illleave a large numbers of borrowersinsolvent if their incomes and assets are in
local currency. More generally, emerging countries are thought to be more economically resilient than they used to be. Many
w eathered the global financialcrisis relatively w ell (Walker, 2014). “Despite the currency issuescountries like Brazil, despite the
high taxes of around 150% the economic boom and inherent culture of w ine drinking and appreciation has not slow ed markets
dow n,” according to Deutz’s Export Director Philippe Rivet. “Other areas such as Colombia, Indonesia, Vietnam, Egypt and
Turkey, have had exceptionalgrow th - South Korea in particular is booming.” according to Chairman of Laurent-Perrier Michel
Boulaire (Schmitt, 2013).
The countries w here we willsee continued grow thover the coming years w illbe the US, Japan and Australia. How ever, the
grow th drivesthe future as well, especially in China, India, Russia, South America and severalAfrican countries. The conquest
of these markets w illtake time and effort to position the Champagne and attract consumers. Japan and Australia have driven
grow th in 2012 for a third consecutive year (13.8 % in Japan to 9.1 million bottles and 11.2 % in Australia to 5.4 million bottles)
a cumulative gain of 1.6 million bottles (CIVC, Appendix 3). The global landscape is changing, w ith surging growthin the Middle
East & Africa and ‘surprising’markets emerging. A direct correlation exists between Champagne sales grow th and realGDP –
in fact, Champagne is predicting real GDP. Assuming that things do not take a turn for the w orst, the highest growth markets
are as follow s:
1. France
2. Nigeria
3. UK
4. China
5. Australia
6. Sw itzerland
7. Italy
8. Argentina
9. USA
10. Brazil (Jones, Malandrakis, Fallow field & Peretti, 2012).
One of the countries that should be a focus is Nigeria, based on emerging w ealth fromoil. Asia Pacific is of course a major
target for the future as w ell, comparing Fig 1 & Fig 2 on the reality of grow th.
There is a clear message that to grow and maintain market share in the Champagne industry, suppliers and retailers need to
move to emerging markets w ith consumers with disposal income, credit availability and improving living standards (Moran,
2013). How ever, that does not give Champagne suppliers and retailers the guarantee, as despite the Japanese economy
returning to positive grow th in 2012 w ith GDP going up 2%, setting the ideal market backdrop for luxury goods like Champagne,
consumers remain price conscious on luxury good spending (2013).
3. Future
Global Warming
Global w arming is seen as a positive in the industry by CIVC’S Environmental Manager Arnaud Descotes, w ith the CIVC having
identified a continued frequency of vintage Champagne (a Champagne harvest producing high quality Champagne). The
average temperature is projected to climb 1.5 to 2.5 degrees celsius over the next 50 years — tw o of the region’s main grape
varieties may produce entirely different wines in coming years. This could change the game significantly due to grape types and
narrow temperature band for idealgrow th and fullbodied taste. This may also affect also the ability of vines to produce
acceptable grapes (Donner, 2011).
Marketand Growth
Exports have tripled in the past 20 years w hich posesa problemfor northern France, w here the bubbly hails fromnot enough
grapes (Gumbel, 2008). The Champagne market is almost at its planting limit and the plan to extend the region w illtake several
years before harvests can make Champagne. The extension of boundaries is seen as a necessity for “value growth”. The
maximising of value (value perceived in high quality Champagne) is a focus over the production quantity as grape costs are
becoming more significant proportion of the cost per bottle according to L’Anson. The focus willbe to position the quality in
prestigious markets. It still needs to be developed due to some believing that it has reached its production ceiling (Britner,
2013).
The grape price has given grow ersmore bargaining pow er due to the supply chain w holesales (retailers, Champagne glass
suppliers). Given the retail price, and the actualgrow ing costs, if the price of grapes is high, the grow ersget a large part of the
profits (Flanders & Thiry, 2006). What has increased the concerns is that exports have tripled in the past 20 years and this
poses a problem for northern France, w here the bubbly hails from not enough grapes (Gumbel 2008).
Despite its challenges the CIVC is forbidden under EUlaw to fix grape prices and now that Champagne appellation is
now fullyplanted to vines, prices will continue to creep up (Richard Woodard 2012). The cost of a bottle of
Champagne due to the high grape costs per kilo having an impact on profitabilityfor those engaged with low prices
competitive retailersin the UK, French and German market in particular. Thissituation is not like to improve until at
least 2020 or even possibly2025. This is due to the first wines from the Champagnes revised and expanded
appellation which will come on stream. The has caused uncertaintybut there is talk of further consolidationas the
cost of buying grapes and financing stock will continue to increase without necessary equivalent price rises to
consumer market. This willbe most apparent in the Christmasseason with painful discountsto consumers. The
champenois would like to change this perception bysoftening the Champagnes seasonalitybyspreading the
Champagnes geographic reach acrossdifferent countriesand culturesthat don’t buyso seasonal (Woodard, 2012).
New Markets
There is a new focusto safeguard the uniqueness of Champagne and improve the average quality of production stated by the
managing director of Mum Perrier-Jouët (Woodard, 2012). These changes need to take place to compete against other
sparkling w ines. Champagne has seen losses over the last couple of years due to the financialcrisis, but in spite of this other
sparkling w ines continue advancing, proving that they are evolutionary, adaptable and hence perfectly positioned to take
advantage of the financial situation.
Other sparkling w ines posted more than 2% total volume grow th in Western Europe in 2012 and more than 6% in North
America - affordable and casual Cavas and Prosecco and Champagne (Malandrakis, 2013). Champagne Houses are looking to
break aw ay fromtraditionalmarkets and some are already reaping the rew ards with the opening of w ineries in Nigeria and
China, as w ellas India. Moet Hennessy is already targeting young, urban and aspirational drinkers exciting them w ith local
produce sparkling w ine w ith the intention that that they w illmigrate to Champagne w hile maintaining loyalty to an umbrella
brand.
A renew ed focuson the drinking ritual and the ceremony around the serve, a re-discoveryof half-forgotten and rather theatrical
Champagne protocols like the ‘art of sabrage’is now becoming a focus, a daring experimentation w ith sweeterstylesor special
servings like the proposed addition of citrus zest for Lanson’s White Label are only some of the key initiatives that w illinform
the category’s future direction. Untraditionalmarket for Champagne like African markets such as Nigeria - highlighted by
Euromonitor International years ago - are on their w ay to becoming a priority target as the European economy’s disposition
remains uncertain. Traditional Champagne w illremain the category’s key attributes but adding a bit of playfulness,
experimentation and innovation to the mix w illbe vital for retaining its relevance.
There are still challenges ahead, but Champagne can navigate them provided it diversifies both its offerings and regionalfocus
(Malandrakis, 2013). The industry has already seen new markets developing w ith Brazilannouncing its registering and
recognition of the trademark of Champagne. This registration w illallow the regionaltrademark of Champagne to benefit from
full protection on Brazilian territory fromall unauthorized use of the name, label, or other derived terms (Lechevalier, 2012).
Brazil thus joins a number of countries like China, India, Australia, or South Africa, who now recognize and protect the
4. Champagne regional trademark (Lechevalier, 2012). These areas are classified as new found spending powersand upmarket
Champagne goes hand in hand w ith consumption (2012).
There are more dynamic sales trends w ith US resurgent and Japan w ith Australia becoming the new rising stars. The
economies of Asia and greater China (w ith a small base of Champagne customers) are exciting markets w hich are currently
offsetting declines in other developed markets. The recovery and growth willcome in 2015 w here shipments could break
through the Euro billion revenue barrier for the first time (Woodard, 2012). The idea to develop these markets w ill to be to
innovate by bringing ideas like low er ABV (alcoholstrength)seasonalflavours, varying bottle pressure and smaller formats.
This w illallow different needs of globalmarkets to be addressed. Non-vintage Champagne w illprobably remain the focus of
shipments, how ever Champagne Houses w illlisten carefully over the next 200 years to understand national differences but
keep authenticity and craftsmanship to the same high standards (Jones, Malandrakis, Fallow field & Peretti, 2012).
Figure 1 results suggest that the greatest grow th is likely to come from India and China. These tw o countries show the lowest
alcohol market share for Champagne and sparkling w ine of the 17 territories surveyed, at 0.4 and 0.7 per cent. Researchers
have pointed out that these markets could possibly quadruple to a possible 2.3/3.2 percent if there w ere no barriers to market.
The US and UK markets could also double to 9.1 and 6.5 percent respectively as these markets are now seeing Champagne
as a non-celebratory drinkand more a lifestyle drink. This research is based on TNS’ conversionalmodel tool - it evaluates the
tw o criticalfactors affecting brand choice: powerin the mind - w hich is how people feelabout a brand, and pow er in the market
- w hich is influenced by factorslike price and availability (Chahal, 2012).
Champagne Houses are luring more drinkers by using endorsements fromlocalcelebrities, sponsorship of exclusive parties,
and even iPhone apps to educate consumers on w hat some vintners callthe "protocols of Champagne." Mumm, ow ned by
Pernod, holds tastings w here consumers learn how to choose and serve Champagne (Fletcher & Lin, 2013). The huge grow th
in the emerging markets can be linked to the economic grow th of those regions and the taste for brands that might not have
been available. Hugues Le Marié, Americas and Western Europe regional director of Champagnes at Pernod Ricard, explains
how Champagne is seen as an aspirationalproduct and is associated w ith success (Chahal, 2012).
Five Forces
Based on the information and evidence above, the biggest impact on the five forces over the last tw o years is as follows;
Existing competitive rivalry betweensuppliers
Farmers are now becoming more efficient in supplying Champagne directly to retailers. We also see Champagne Houses
targeting new markets and the same countries.
Threat of newmarketentrants
Prosecco and other sparkling w ines like Cava have entered the Champagne market w hen countries sufferfromrecessions.
Evidence has show n that this is very short lived as once economies recover consumersrevertbackto Champagne. Market
entrance is hard due to the high appellation standards fromthe CIVC and having to ow n a Champagne house in the region.
Bargaining power of buyers
Retail stores and supply chains have been selling Champagne as a lost leader to bring customers into store. This has affected
Champagne brand for exclusivity.
5. Power of suppliers
As the market is expanding, the appellation of Champagne is limited to the region, Grape grow ersare demanding more for the
price of grapes. This is affecting the ability of Champagne houses to maintain profits. Long term issues around future profits are
concerning if the new markets (consumers) don’t adopt the Champagne taste or exclusivity.
Threat of substitute products (includingtechnology change)
Due to climate change, the taste of Champagne may change in the years ahead. This may move consumers to sparkling w ine
or Cavas w hich taste similar. Alternative products like Cava and Prosecco may have been seen by consumers as suitable
products, but evidence has shown when economies are on the up, so are Champagne sales.
Methodology
Research has been carried out both fromthe CIVC w ho facilitate and protect the Champagne industry, professionals fromthe
drinks industry, suppliers, critics and economic specialists. Data has been captured and compared to provide a balanced view .
The reason for the review wasbased on presentations fromCIVC, Louie Roder, Tatinger, and Nicholas Fuette about the new
revised areas for growing Champagne due to shortage demands. I w anted to investigate w hat wasdriving this demand, and
therefore Michael Porter’s 1979 Five Forces tool w as used to investigate the pressuresof the market. Due to the CIVC
involvement, political and economic review shad to be taken into account. I w anted to understand the rationale for entering new
markets, as w ellas w hat evidence this wasbased on. Porter’s tool w as used, as this is based on a more deliberate strategy
compared to Henry Mintzberg’s, w hich looks at a more changing market. As the new markets are unpredictable at this stage
and there is no pattern set as yet, in my opinion Michaels Porter’s tool seemed more relevant.
Results
The Champagne market and its customers are evolving w ith new continentstaking to the exclusivity and luxury of Champagne.
There is overwhelming pressure on producersto make higher quality and quantities of Champagne. New market segments are
a must to protect future revenues for producers as it can be identified that existing markets are slow ing down and the
dependency on these markets is too high. How ever, economics and politics play a large part of the developing of these
markets. Below in the SWOT analysis outlines the landscape of the current market and some of the current challenges;
6. Discussion
It is apparent that the future of Champagne is evolving, despite the loss of 2% market share to other substitutes like Cava and
Prosecco in Western Europe and 6% in North America (Woodard, 2012). It highlights that consumers are still w illing to drink
bubbly w ine but are happy to change, subject to their budget and the state of the economy around them. Now that an economic
recovery is starting to take place in 2014, the question that w ould need to be asked is w hether consumersare happy to change
back to Champagne after tasting Cava and Prosecco despite the forecast of sales increasing this year (Stamford, 2014).
The optimism fromChampagne Houses may be too high, but leaves doubt over w hat the repercussionsmay be. There is still
clarity needed around this optimism, as this may be speculation to keep confidence high in the market. It is also apparent that
the economic recovery willtake time (Charters, 2013) and that this confidence is unsupported. A feeling that consumers are fed
up w ith austerity (Woodard, 2012) does not support the recoveryof growth forecasted for Western Europe. Therefore, based on
economic recovery, is investment into new markets justified?
There is definitely evidence to support this w ith growth in countries like Brazil, despite the 150% tax on imports, show ing that
w ine drinking and appreciation has not slow ed markets dow n (Schmitt, 2013). Equally, exports have tripled in the past 20 years
(Gumbel, 2008). The question over how Champagne Houses can deal w ith such pressure with planting limits and the plan to
extend the region means that it w illtake severalyears before harvestscan make Champagne (Britner, 2013).
Global w arming may help w ith making better quality Champagne (Donner, 2011), yet the yield w illremain the same. It is
unclear how these markets w illbe sustainable and w ho is best to invest in w ith so much uncertainty w hen investments from
financialinstitutes w illonly be made in emerging market countries that adopt reform(Wilson, 2013) - and even so, this may be
limited subject to the economic crisis in the US and Western Europe continuing (Walker, 2014).
The focus should be more on the price of grapes, w hich is impacting the w holesale price, and how to reduce the cost of
grow ing the grapes (Gumbel, 2008). As w ellas this, attention should be paid as to how to manage the grow ing demand, as this
controls the pow er of the grape growers. The future price of grapes is likely to continue increasing, and if focus is not made in
this area the price of grapes w illcontinue to ascend, as price fixing of grapes is prohibited by the European Commission
(Woodard, 2012). This w ill affect the long term profitability of Champagne Houses and therefore asks the question: are price
rises for consumers likely to increase?
The outcome of the analyses may have been different if consumers were surveyed on their thoughts, and raises the possibility
of a further investigation into economic environment, and w hether there is evidence for any association with luxury spending
and Champagne being linked. By using a resource-based view, it becomes prudent to question w hether the outcome may have
been different, despite perhaps not being sustainable (Barney, 1991).
Conclusion
The future for the Champagne industry is facing uncertainty with pressure to keep quality high w ith the ever-growing demand of
countries w ith economic growth looking for luxury and exclusivity. Asmuch as the industry has gone through saturation in
current markets over the last year, and the economic crises in the United States and Western Europe are ongoing, Champagne
w illstill remain in high demand.
What is evident is that Champagne prices w illincrease over the next 10 years, and as emerging markets mature, the need for
higher quality Champagne w illincrease putting more pressure on the price of grapes and driving the price higher despite the
new appellation area to expand grow ing regions. The analysis states that emerging markets w illbe invested in by Champagne
Houses, even though there is an element of riskin terms of w hich countries willdo so. This points to a need for more analysis
on the economic state of countries over the next 10 years so that a long term strategy in terms of entrance to market and
sustained presence can be formed.
Not only is an economic analysis needed, but a political analysis as w ell, particularly in regard to currency fluctuation and
barriers to entry. Over the next 10 years the Champagne industry needs to plan to protect against the effectsof an economic
crisis in order to protect its future revenues, as wellas w orking with the CIVC to develop a more balanced approach in
conjunction w ith w ine growers who willcontinue to increase their pow er as a supplier due to the price of grapes. Further
investigation is needed to develop how more higher quality grapes can be produced w ithin the region.
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Appendices
Appendix 1
Drinks.com ranking 2012 future growth.