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Montgrass Case

Current Position
▪ Financial Overview
▪ Proposed Strategy
▪ Marketing
▪ Competition
▪ Risks and Contingencies

MontGras, a medium-size Chilean winery, has to formulate an export strategy. It has to decide whether to emphasize the U.S. or U.K. markets, which also offer different positioning and pricing proposals. It has twice failed to penetrate the U.S. market, because distributor relationships fell through, and is deciding between two new potential partners. In the United Kingdom, it is offered participation in a supermarket promotion that will boost volumes but at the expense of price maintenance.

Current market situation

▪ Wine market is shifting from old-world wine to new-world wine
▪ New world wine exports is expected growth at 18.3% per year
▪ Increasing consumption per capita consumption in UK and US
▪ Level of consumption of wine below $5 is on the decline
World wine business is uncounted $150 billion in consumer value and $60 Billion in wholesale value.
Chile 10th wine producer country due to climate enjoys more regular harvest then the Old World countries, but its wine is perceived as the low quality, because country of origin determines quality.
In the New World wine industry, main player is Californian E&J Callo, with the 1.5 % world wide market share.
Chile as a low developed countries group member is an agrarian country tries to penetrate markets in developed countries where there is a shift to service from the industry.

The export for Chile was survival not only because of overproduction in the country of the origin, I think one more aspect is population characteristics-as main major dimension in economic forces, their income and purchasing power creates market more attractive, as we know
Asia, Europe are big emerging markets. (BEM)

We see from the case government’s role is promotional. Montgras and in general, medium †sized and small companies needs assistance in...