Sulas Wines Essay Example for Free

Sulas Wines EssayQuestion 1 The Indian wine industry presents or so interesting characteristics that empennage be analysed using the Porters five forces framework to understand to what intent it is a bankable one, and why it is attractive or not. Let us get started with Rivalry here(predicate) it is important to differentiate between the Indian and the global market. In fact, at the time the shield was written, the Indian market was expanding so rapidly (25/30% per year) that barter opportunities were flourishing and all the existing participants could easily transfer their products without the need to attack others customer base. However, if we broaden our point of view to the global industry, rivalry is way fiercer and exports atomic number 18 likely to be a less profitable chore than the domestic one. Overall, LOW/MODERATE. Buyers power in this industry, it is incredibly difficult to lock in a significant customer base made of man-to-man consumers that face virtual ly zero switching costs and have different tastes for wine. Additionally, wholesalers and retailers can exert solid pressure on wine producers for what concerns shelf space and wine selection. Therefore, it witnessms that buyers power is HIGH compared to producers, thus sound profitability.Suppliers power if we think in terms of the raw materials needed to produce wine, i. e. grapes and juice, we can state that, beingness them commodities, these are subject to the seasonal fluctuations in price, quantity and availability typical of agricultural products. In periods of unnecessary supply, high quality grapes could be purchased for lower prices and vice versa. Also, regulatory changes in 2001 reduced both gross revenue taxes and the costs of imported bottling items, thus increasing profitability.However, India has a major issue that turns out to be of authoritative importance to farmers and producers, i. e.the lack of stable electricity supply this could in principle give some talk terms power to suppliers of diesel and generators. Thus, suppliers power is LOW/MODERATE.Threat of substitutes although the Indian government has recently granted some(prenominal) concessions and liberalizations for both sale and consumption of wine, the threat of substitutes is still HIGH, especially for cultural reasons whereby whiskey, for instance, is traditionally preferred by the majority of Indians to wine. However, given the rapid expansion of the industry, there seems to be more than a hope that this outlook will change in the near future.Barriers to entry wine is definitely no easy business to start. There are several reasons to justify this point first of all, as Sulas case clearly shows, it takes time to obtain the various licenses to a fault, the knowledge and know-how required are extremely sophisticated and precise additionally, wineries are capital intensive businesses and the initial investment to set them up is substantial. However, as we can see from the c ase, the Indian wine industry has benefited from governmental liberalizations that have encouraged many an(prenominal) new wineries to enter the business.We can conclude that BTE are MODERATE/HIGH. The Porter analysis provides us with a moderately profitable scenario, in which it is not easy to start a successful business unless the exact skills and capabilities needed are present. In the following answer, these resources will be analysed in the context of Sulas activity. Question 2 The biggest altercate that Samant faced when he returned to India to produce wine was that of changing the alcoholic tastes of consumers. To do so, he had to rely upon a strategy that would leverage on the core resources and competencies he had brought back from California.Also helped by a vary consultant friend, Samant meticulously configured his piece if land in order to exploit the good potential drop of its location additionally, he successfully realized that an unconventional growing/harvesting s chedule had to be espouse if they wanted to take advantage of the seasonal characteristics of the weather, much(prenominal) as monsoons. He managed to earn a solid and valuable reputation, refusing to bribe officers to obtain the necessary licenses and took care of promoting its products, through marketing campaigns and wine tasting events, in the attempt of changing Indians culture towards wine.For what concerns the type of wines to start production with, Samant successfully identified those that could best construe with the spicy flavours of the Indian cuisine and, subsequently, he diversified the firms portfolio by introducing more varieties of whiteness and red wines. Finally, he has secured the unique and valuable expertise of some of the b dutyest players in the financial sector, who have sky-high joined him in the firms activities. This combination of factors have allowed Samant to put Sulas.Vineyards in a very comfortable position to exploit the huge growth that everyone expects from the Indian wine market by rights now, the firm seems to have a competitive advantage to further develop in the near future, if the right strategy will be pursued. Question 3 Looking at the numbers, Sula has been extremely profitable in 2007, with net profits that increased more than six fold since the year before also, sticking to market forecasts, it seems that an explosive growth has just begun in India, an opportunity that should definitely be exploited.Now that the business is well established and generates a steady stream of revenues, Samant may consider to raise additional debt to finance the long-term challenge of producing premium red wines in a separate winery, something that, if successful, would give Sulas business a major boost both in sales and in reputation. In the meantime, revenues from content sales would provide the capital necessary to feed the already existing business.Moreover, it could also be worth(predicate) it to attack the global market wit h initially lower prices to gain some market share also in Europe and in the U. S. at first, relationships with touristic targets such as hotels and restaurants would be established and, if this strategy worked out, thus Sula would face an ever-growing demand for its products, at least for the next 10 years, that could be met by running(a) together with other local producers of premium wine.The idea of a consortium of Maharashtra firms could be attractive for many reasons, among which a significant increase in bargaining power towards the government when it comes to requesting the necessary improvements of regional infrastructures, such as roads, electricity supplies, etc.