MGT301: The Hunter Valley Wine Company- Strategic Management Report Assignment Solution

Report Writing Assignment

Case Study – The Hunter Valley Wine Company (a fictitious wine company) Australia has enjoyed a significant increase in wine exports to Asia – particularly in the higher quality and higher value segments – and looks set to continue to benefit from this increased demand. China will continue to dominate this emergence in demand along with Japan, Singapore and South Korea and also, India, Thailand and Vietnam. The potential of these markets offers significant opportunities to Australian wine exporters whilst also presenting substantial barriers to success. History The Hunter Valley Wine Company (HVWC), located in the picturesque Hunter Valley of New South Wales (NSW), was founded by the Smith family in 1990 with a vineyard of 25 hectares comprised of mostly Semillon, Chardonnay, Shiraz and Cabernet Sauvignon Vines. Since that time they have expanded their winery through the acquisition of a neighbouring vineyard, which has not only increased their grape production potential, but also provided additional wine-making equipment resources that have significantly increased their wine production capacity. Further, they have developed strong relationships with other Hunter Valley grape producers that now supply additional grape resources to the winery. Production Initial vintages where modest and in both quality and quantity however, a determination to improve both viticulture and viniculture techniques payed off and saw a marked improvement in both the yield and quality of grape production by 2000. Since that time HVWC has further improved yield and quality outcomes and incorporated high quality grape production from other producers that have further increased the winery’s production capacity and quality. They are now recognised as an established producer of medium to high quality wines. The winery has the capacity to produce 10,000 cases annually for each of its four main varieties of Semillon, Chardonnay, Shiraz and Cabernet Sauvignon. Awards Since 2000 HVWC wines have been exhibited successfully in all major Australian wine shows annually and have won an impressive array of gold, silver and bronze medals for all four varieties that they produce. Recognition for the quality of HVWC wines has steadily improved over the last 15 years and increased demand in the Australian domestic market has followed. Sales and Distribution For the first decade sales were initially made through the cellar door directly to winery visitors and then through independent liquor outlets predominantly located in NSW. However, following exhibition successes at major Australian wine shows since 2000, domestic demand has increased to the extent that HVWC now has an exclusive agreement in place with Dan Murphy’s to distribute their full range of wine products through 174 nationwide stores. This relationship is supported through national marketing in traditional media and through the Dan Murphy’s website. HSVC sells its wines to Dan Murphy’s at AUD$8.00 per bottle (AUD$96.00 per case) and Dan Murphy’s retails them for AUD$13.99 per bottle. Current production costs for HVWC across its range of wine products, including delivery to Dan Murphy’s, are AUD$5.00 per bottle AUD$60.00 per case). You report must help HVWC management answer the following question: Given the most recent success of HVWC in growing its business and the increased demand that now exists for quality Australian wine in Asia, what strategic plan should the next generation of the Smith family develop for HVWC? Your report will typically be structured as follows:

1. 1. Executive summary (one page maximum);
   2. Introduction;
   3. Presentation of data collected + method. This section will be the largest of the report, since it must discuss topics like:
      • The resources, capabilities and core competencies of the HVWC,
      • Competitive advantages and their sustainability,
      • The internal and external environments of HVWC
      • Relevant economic market drivers and wine consumption patterns,
      • International market entry strategies, entry barriers and Trade Agreements,
      • The potential for mergers and acquisitions
      • Organisational structure, controls and corporate governance;
   4. Interpretation of data and main findings;
   5. Recommendations (one page maximum).
   6. References.

Importantly, the report should include sources beyond the course readings and differentiate strategically between short-term opportunistic wine trading opportunities and longer-term substantive wine market development outcomes. As this is a fictitious case, there is a degree of leeway when presenting the organisation (make sure you remain consistent, however) but industry data must be accurate and up-to-date. Do not use the modal verb ‘may’ in your report (as in ‘doing this may result in that’) as it makes your sentence tautological, that is, always true by definition. Please do not write ‘we’ or ‘the writer’ when talking about your findings and recommendations; simply say ‘I’ (if you worked alone) or ‘we’ (if you worked as a group). Format The report is a group work; it must be of 5,000 words or less (not including appendixes and reference list) and must comply with the AIPE style guide. You are advised to familiarise yourselves with the marking grid (next page) that will be used to mark your work; reading page 5 below is also recommended. Type your report with a 12-point font, use double-line spacing and margins of at least 4 cm on each side to allow for easy marking. Submit your work in class and via Moodle (Plagiarism links). Marks will be deducted if these guidelines are not respected.

Executive Summary

Globalization and technological breakthrough in the business segment is a consistent activity. Global transactions in currency, international trade, foreign portfolio and direct investments are augmenting over time. This paradigm is being experienced by all industries across diverse nations. The same globalization has also taken place in the wine industry and has helped to reshape the global landscape of the industry. However, there has been an increase focus on the regional responses to international pressures that has led to intense competition among wine producers. Especially the development of the New World Countries has helped in revolutionizing the industry. Demand and supply patterns of wine have changed and traditional markets dominated in the past by few players in Western Europe have been dimming. Hence, in order to establish a global foothold it is essential to clearly investigate current market situations and accordingly develop a comprehensive strategy for entering the global wine market. The study will conduct a detailed analysis on the current global marketing environments by investigating the trade barriers, pacts and talks going on between nations. It will also find out the opportunities and issues faced by wine producers in Australia. At the same time it will investigate the main competencies and resources available with the Australian wine industry. At the same time it will clearly investigate the environments, corporate governance and other factors that influence the opportunities to establish a foothold in the international wine market by Hunter Valley Wine Corporation.

Introduction

The global wine market has been dominated mainly by the Western European nations and has witnessed phenomenal changes over the past one and a half decades. The evolution of the New World nations producing and exporting wine in the global market has helped in the symbolization of the wine revolution. Australia has emerged as one of the most successful players in the global wine market. Furthermore, the Australian government is trying its best to ensure that key wine players have a firm foothold in the international market by launching ambitious plans, entering into negotiations and talks with the reduction and removal of tariffs and the formation of several pacts that help in the export of Australian wine products (Montaigne & Coelho 2012). In this context, the paper will explore the position of Hunter Valley Wine Corporation and explore the opportunities it stands and the limitations it faces in order to establish a global footing. Depending on the external and internal environmental analysis, several recommendations will be presented that may help the wine company to strategies a global marketing and promotion plan so as to emerge as an international player. The resources, capabilities and core competencies of Hunter Valley Wine Corporation Hunter Valley Wine Corporation’s largest strength is its product. It has excellent quality of wine that is highly successful over Australia. Furthermore clients savor this product and hence its demand has increased. Its acquisition of strategic vineyards has led to its production of Cabernet Sauvignon, Chardonnay, Semillon and Shiraz Vines. Furthermore, its long term relationship with neighboring producers of grape vines has also made it possible to acquire bulk quantity of the vines required for the production of wine. The company has participated in wine conferences and has also won awards and accolades in the Australian wine market. This has helped the company to exclusively partner with Dan Murphy to distribute its wine products over the nation. This has helped in the increase of the sale of its products as well as enhancing its popularity in the domestic market.However, Hunter Valley Wine Corporation is a domestic player and it needs to widen its base by foraging into the global market. It needs to develop a comprehensive marketing strategy. The company has a lot of technical expertise having several years of indirect and direct sales experience. Its core competencies lie in successfully marketing its impeccable product and developing a brand name across Australia. Competitive advantages and their sustainability Hunter Valley Wine Corporation is a domestic player and in comparison with large producers of wine it may find difficulty in competing. This is mainly because large wine producers have increased economies of scale that allows them to get more profit margins towards the sale of products. At the same time, the company cannot afford spending huge amount on its marketing and promotion activities. This is one of the fundamental challenges that this firm will face if it intends to foray into the global market for wine. However, the company can select and enter niche markets in some nations in Europe as well as China. In Europe, however, Hunter Valley Wine Corporation has larger chances of finding success. This is mainly due to the fact that the whole region has a rich tradition of small wine bars and the wine product of HVWC will have a place in this market. However, it needs to consider the fact that China is a price sensitive market and foraging into China means that it will need to keep the cost of its product to be highly competitive. However, the Chinese government is offering subsidies for players to enter into the local market and this means that HVWC will have an opportunity to export its products in China. The Chinese government is also offering assistance to companies that plan to export its commodities as well as set up their outlets for processing wine in China. HVWC can take this opportunity to enter China and then sell its wine products across the nation as well as export its commodities from China to other neighboring countries in Asia. In fact, the Chinese government is taking a keen interest in promoting the wine industry and the growing wine market in China will help the company to establish its base and continue its business for a long term basis (Doloreux, 2015). However, the company finds its challenge in retaining its market in the home country. This is mainly because the Australian government is trying to consolidate the domestic wine segment to comprise of lesser but large multinational giants. However, this can be a competitive edge for HVWC mainly because of the fact that this organization has grown over the years and has entered into exclusive partnership for selling its wine across Australia. Furthermore its acquisition of grape vines from neighboring vineyards have also made it easy for the firm to increase supply of wine and associated commodities. Coupled with this is the accelerated global competition that has threatened the expensive wine products of this firm. This is mainly because cheaper wine products from the United States of America and Europe are quickly making their ways into the Australian market. Furthermore, Australian wine producers are facing stiff global competition from France and New Zealand especially in exporting its products to the Chinese market. The internal and external environments of Hunter Valley Wine Corporation The internal and external environments of the organization include factors that influence its decision for marketing. Some of the issues faced by the Australian wine market stems from the fact that it is extremely fragmented with the price of grapes being highly volatile. Despite this, the Australian government is trying its best to stabilize the grape prices. The domestic market for wine is also increasing with a fall in the consumption of beer and an increase in the consumption of wine. Furthermore, Australian wine producers are plagued due to the import of premium and high quality wine as well as cheap wine from countries like France, America and Great Britain. The Australian wine consumption market has registered an increase in the import of wine that is mainly targeted to mid and high range customers. Furthermore, the Australian export of wine in the past ten years have registered a decline due to a weak Australian dollar, heightened global competitiveness and a lesser demand for domestic wine consumption (Winemakers Federation, 2013). Coupled with this is the problem experienced by global economic downturn. The financial crisis has led to a worldwide slackening of demand for wine. Furthermore, Australia is currently experiencing an oversupply of wine leading to several unsold bottles. Some external factors that influence the marketing and export of wine across the globe are regulations and policies levied by the government. Especially in Australia, the country is current discouraging foreign wine companies to establish their base in the nation. At the same time, it is strategically heading towards concentrating on a fewer large multinationals to capture the domestic wine market. Hunter Valley Wine Corporation has an advantage that its wine is hugely popular across the continent and hence it holds a firm foothold in the domestic market (Taylor, 2014). Furthermore technological growth and breakthrough by means of the Internet has helped in revolutionizing the Australian wine market. Hunter Valley Wine Corporation needs to widen its base in the domestic market by means of the Internet. It has currently tied up with a firm to sell its products across the nation. However, technology has made it possible for the wine producers to directly contact potential customers rather than relying upon distributors and retailers for selling their products. This will help in lowering the cost per commodity. On the other hand, the firm also needs to decide on potential partnerships with logistic firms so that they deliver bulk products of the company to potential clients. This will help in overall cost effectiveness thereby helping the company to direct the extra revenue earned towards marketing and promotion (Jordan, Zidda&Lockshin, 2006). Also the Australian wine market is highly proactive and ambitious. This can be seen by the efforts taken by the Australian government is establishing several wine collaborations including the Australian Wine & Brandy Corporation and Winemakers Federation of Australia. Hunter Valley Wine Corporation has associated itself with both these government bodies for the promotion of its products. Moreover, these bodies encourage wine producers by designing and implementing programs that help in exporting and promoting the Australian wine commodities. Furthermore these government bodies help domestic wine producers to enter into strategic collaboration for export of their products. Hunter Valley Wine Corporation needs to establish talks with these bodies to find potential firms that will help in exporting its commodities abroad. Another factor is the extremely competitive global wine market. It has a plethora of players hailing from the New World Nations like Argentina, Chile, South Africa and New Zealand as well as stiff competition from Europe and the United States of America. Furthermore the twenty-first century has witnessed considerable changes in the international market for wine (Wittwer, 2007). The globalization has led players to freely enter as well as exit from a market thereby leading to huge competition. This has led firms to rethink their marketing strategies to focus on innovation, pricing, diversification of products and cost effective production strategies. The association between nations as a result of globalisation has led to an open and a borderless market of wine to potential consumers. It is essential for Hunter Valley Wine Corporation to consider the tastes, preferences and aspirations of the consumers while marketing its products. Despite this, the Australian wine industry has reported acceleration in its volume of wine exports to 3.6 percent in the year 2014. Previously, the wine market was reeling due to the biggest boom in Chinese wine market, heightened competition from the United Kingdom and the United States of America and a weak Australian currency. However, the recent trade agreements of Australia with potential wine exporting natiins have helped the industry to look forward for a boom in wine exports. Relevant economic market drivers and wine consumption patterns The international wine market has gone through a drastic change in its supply and demand patterns and this has reflected on the price of wine. The residents of the BRIC nations including Brazil, Russia, India and China have increased demand for wine and its associated products. This has led to an increase in prices of wine. Especially these countries are now demanding for premier wine products to be exported from France. This translates to the fact, that Hunter Valley Wine Corporation from Australia can stand a chance to market its premium wine products in the BRIC nations. This is mainly because the Australian wine products are equally impeccable in taste and has a large market (Business Time, 2012). Furthermore, a survey conducted by International Wine & Spirit Research (IWSR), based in London, United Kingdom found that 3.2 billion wine cases were produced across the world in the year 2013. The majority of the production was attributed to that of red wine (54%). The rest of the produce was that of white wine and rose wine with 37% and 9% respectively. Despite this, the largest consumer market for wine still rests with the United States of America. The consumption patterns of wine in the year 2013, has shown a total consumption of 339 million cases by United States of America, closely followed by France at 296 million cases. Despite this, China registered a consumption of 144 million cases of wine in the year 2013. The International Wine & Spirit Research (IWSR) has predicted that by the year 2018, the two largest consumer markets for wine will be those of the United Kingdom and the United States of America. Another trend is that the Chinese market has registered acceleration in growth of 69% in the consumption of wine from 2009 to the year 2013. It is forecasted that the Chinese market will grow by another 25% by the year 2018 (Lyons, 2015). Table 1: Top 10 world wine production countries (* new world) The above table shows the top ten wine producing nations in the world. The countries marked with an * sign denote those belonging to the New World. Out of this, Australia ranks fourth by its volume of exports and shares 5.1 percent of the global wine production (Gallus, 2010). In Australia, however the past five years have witnessed intense competition in the domestic market for wine. The demand from significant export markets comprising of China and Europe has been volatile. This, plagued with an increase in the currency of Australia, low cost producers of wine abroad including France and the United States of America as well as intense competition both on the domestic market as well as global market have negatively impacted the export of wine and its associated products. It was been witnessed that the Chinese market is more tilted towards the consumption of exported premium quality wine from France (Lyons, 2015). However, Hunter Valley Wine Corporation has vertically integrated by growing grapes and employing these for producing wine. Furthermore, by offering a variety of wine products have also helped the firm to remain in business as well as acquire a premium position in the domestic wine market. The above graph shows the consumption of wine. According to this graph, the Americans are the greatest consumer of wine. However, the consumption of wine in China has increased up to 20 percent in 2011 as compared with 2010 (The Economist Online, 2012). Despite this, the past ten years have been unfavorably impacted by an excess of wine supply in the global market. This coupled with consumer taste change towards either premium wine consisting of wine flavors from France or preference for inexpensive wine products has revolutionized the market. Coupled with this is the competition from unscrupulous producers of wine. These producers imitate the packaging of premium bottles of wine and instead sell these to consumers at very low prices by filling in cheap wine products (Business Time, 2012). Furthermore, foraying into the global market is highly challenging because low cost wine from significant markets in the United Kingdom and the United States of America is being dominated by the global wine market (Ibisworld, 2015). International market entry strategies, entry barriers and Trade Agreements Australia faces a lot of impediments to export of wine in the form of trade barriers, entry strategies and agreements. The Winemakers Federation of Australia works in order to promote free trade by removing non-tariff and tariff barriers for the export of wine in the global market. Australia has signed a pact with the European Community on Trade in Wine in the year 2008 for regulating wine trading between Australia and Europe. The agreement came into effect from the year 2010 thereby aiding Australian wine producers. This agreement accepts the sale of wine from Australia into Europe by accepting all forms of winemaking mechanisms. Furthermore this agreement has helped in simplifying all needs with respect to blending and labeling regulations to the levels of alcohol. Hence, for Australian wine producers this has been a blessing as lesser concessions and changes needs to be made in order to export wine in Europe (Wine Australia, 2016). Furthermore, Australia has signed a free trade agreement with Japan and Korea in the year 2015 and 2014 respectively. This has permitted Australia to trade wine with reduced tariff in Japan as well as the capability to self-certify wine products and commodities exported in Japan. On the other hand, Australia has managed to remove all tariff applied for selling wine in Korea (Wine Australia, 2016). The export of Australian wine products into China still attracts trade restrictions. Despite this, Australian exports of wine and associated products accelerated up to 58 percent in China from the year 2001 – 02 till 2010 – 11. Despite the global recession, Australian wine and associated commodities managed to maintain its market share in China (Wine Australia, 2012). Previously the taxes and custom duties on general Australian wine products into China came up to a total of 48.2 percent (Australian Trade Commission, 2014). However, the China Australia Free Trade Agreement (ChAFTA) will help in removing trade barriers. It has finally come into effect from December 20, 2015 and has helped both nations. China will be removing tariff on Australian farm products including wine, dairy, sheep and beef if the trade agreement comes through. Hence, wine producers are hopeful of being able to trade wine and associated products at concession if trade restrictions are removed (Department of Foreign Affairs and Trade, 2016). The potential for mergers and acquisitions The Australian wine market has recently seen a boost in trade as the government’s efforts has led to the removal and control of several trade barriers. The Australian government is now trying to hold talks with the Canadian government to remove trade barriers to the export of its wine products into Canada. The recent trade agreements signed with Japan, Korea and China has helped the Australian wine producers. This is mainly because of the removal of several entry and tariff barriers. This has furthermore facilitated the opportunities to enter into partnerships, merge or acquire significant wine supplying and producing organizations in these nations. Furthermore, the Australian wine market being highly fragmented, most wine organizations are operating on a domestic scale. It is essential for Hunter Valley Wine Corporation to enter into significant partnerships with strategic wine producing and supplying entities so that it can enter into the global market for wine. Also, the producers of wine in Europe are still suffering from the loss of it traditional wine export markets due to the aggressive New World nations. The production and the quality of wine exported from Australia is highly competitive in the global market. Furthermore, several strategic firms in Australia are striving to enter into partnerships with American wine producers so as to ensure a wide coverage of target markets. Hunter Valley Wine Corporation can enter into significant partnerships or acquire strategic wine producing firms in China. Its establishment of a winery in China will help the company to increase its sale of wine in Asia and will also establish its footprint into the global wine market. At the same time, the company can enter into partnership with a European wine player so as to export and sell wine and associated commodities into the Europe market. The free trade agreements between Europe and Australia has helped the producers of wine to freely enter the European nations to sell its products and acquiring strategic wine producers in Europe will help Hunter Valley Wine Corporation to establish its base across Europe (The Economist, 2003). Organisational structure, controls and corporate governance The Australian wine market is highly fragmented and has over 2500 producers of wine. This requires long term relationships between parties. Scholars maintain that long term relationships help in developing obstacles to competition, lessen the price competition and garner optimum revenue. They have also maintained that these relationships evolve by means of several discussion and dialogues prior to being considered for the long term. Especially the development of mutual commitment and trust between parties help in the development of long term relationships (Somogyi et al. 2010). It is essential for Hunter Valley Wine Corporation to strategically focus on producing quality wine and regionally branding its commodities. It is essential to engage in significant communication by employing only the most relevant modes of communication. Scholars have witnessed that Australian wine producers have used excessive channels of communication and transmission of information. This has led to a decline in trust and the creation of confusion. This furthermore warrants wineries to provide enhanced focus to provide relevant and high quality information that should be sent out in a streamlined manner by providing appropriate time gaps. This may be conducted by means of conferences, newsletters and journals that are organized at particular intervals of time periods so as to provide new data related to the production of wine to those growing grapes. This may be conducted by individual winery establishments or wine industry associations. Moreover, it is essential to streamline the dyadic communication levels between the wine players so that other irrelevant winery office bearers would not be required. This would also lead to clear communication patters by the diminishing of confusion and errors in message transmission thereby leading to the possibility for the establishment of long term contracts for the sale of wine products. Despite this, several regulations relating to tariff barriers and export rules require technical data that can only be provided by the appropriate technical authority on wine and this requires the government intervention and stricter rules for corporate governance. At the same time, wine producers should mitigate these issues by hiring liaison employees having the required contacts and technical expertise to permit the streamlining for a frequency or a communication medium and the consistent diffusion of technical information related to grape and wine. Another study conducted explored the procurement relationship between winemakers and grape growers. It has been observed that most transactions between nations involve the use of contracts. The use of contract for producing as well as marketing and selling wine products across nations found trust as a major determinant in the possibility of ensuring long term contracts and business relationships in the wine industry. The study conducted an empirical analysis to find out the influence of trust especially on the selection of a governance methodology (Wilson, MacDonald & Monnane 2015). This is significant because trust and contracts have been observed to enhance commitment levels as it plays a significant role in the determination of having long term contracts between relevant parties in the wine business. However several false notions related to the production of wine impacts the contract terms. One such idea is that wine quality is based on the grapes and hence in order to garner higher quality there must be the establishment of higher commitment level. These ideas are further exacerbated by the current oversupply of grapes in Australian wine sector (Banks et al. 2007). Furthermore, it is significant that parties develop a relationship based on trust that may include the promotion and encouragement of optimal cooperation levels. This is especially significant due to the production of conspicuous wines. Hence, the government, as well as individual wine producers, needs to be more alert. The government should impose stricter corporate governance policies that penalize those indulging in the production of spurious wines. Individual wine producers should be watchful and curb any activity that may lead to the production of duplicate wine commodities (Overton & Banks 2015). At the same time, significant parties should aim for having compatible objectives. These objectives are related to cooperation as both parties need to work together so as to achieve the predetermined objectives. Associated with the ideas of objective compatibility and cooperation, rests that fact that the quality of producing regionally and locally branded wine and grape commodities stimulates cooperation especially due to the construct of region. Depending on the region, it is important for wine producers to contact the grape growers so as to garner excellent quality wine products. It is important for the wine industry to understand that it should use sustainable and environmentally safe technologies for the production of wine. The Australian wine industry requires a lot of water and hence it is essential to ensure that it effectively uses water by enforcing long term strategies for effective water management (Jackson, 2015). Furthermore it is essential for wine producers in Australia to effectively employ resources in an environmentally friendly and sustainable manner. They should ensure recycling of waste materials and should strive to mitigate the ill-effects of winery operations on the environment.

Interpretation of data and main findings

The past decade has been highly challenging for the Australian as well as the global wine industry. Some of the common contributors include an oversupply of wine grapes across Europe and concentration of retail supermarkets. These supermarkets purchased wine in bulk quantity and expanded supplies in China. Coupled with this was the global recession that furthermore led to a slackened demand for wine. Especially Australian producers were plagued by a high valued Australian dollar that furthermore decreased their competition in the global market for wine. Moreover, the expansion of vineyards led to an oversupply of wine. Furthermore, countries like China demanded premium quality wine coming from France and other European countries. Also, Asian nations being price sensitive demanded cheap wine coming from Great Britain and the United States of America. Despite this, Australian wine producers have a lot to look up to. The infrastructural growth and reforms in irrigation by introducing innovative technologies have helped the wine industry in Australia to flourish. Furthermore, the Australian government has entered into trade agreements that have helped in quashing global taxes and in some nations led to a zero trade barrier for exporting wine and associated commodities. Furthermore, the global market is on its way to recover from the financial slowdown especially in the United States and some parts of Europe. Especially after signing the ChAFTA agreement, wine producers will be able to export wine and associated commodities in China. Also, it has become easier to export wine into Japan and Korea.

Recommendations

The quality of wine exported by Hunter Valley Wine Corporation is premium white wine. Especially after the ChAFTA agreement, it will be easier to market and sell premium wine products in China. However, there will be stiff competition from premium wines being exported from France and New Zealand. Especially for Hunter Valley Wine Corporation, entering into the global market can help the company to grow. This is because the company manufactures white wine that has great demand in China and Europe. Furthermore, the government has made it easier for those to export wine in Europe by lessening restrictions on labeling and blending of wine. Hunter Valley Wine Corporation can set up a base in China mainly because of the removal of trade barriers for export of Australian wine in China. Furthermore, it can sell its products to nearby nations including Korea and Japan that has entered into lessened trade restriction with Australia. This will help the organization to widen its market in the international arena and ensure that its wine is sold in the Asian nations. The company also needs to enter into partnerships with potential retail and wholesale companies located in the Europe and the United States of America. This is mainly to ensure that it commences selling its products across the European nations and the United States of America.However, the organization needs to set up an advisory body consisting of members who can liaise with potential government members having technical expertise so as to engage in corporate governance solutions. They will not only guide on the technical expertise required but will extend their advise in making decisions with reference to partnering with potential global organizations who can sell the products of Hunter Valley Wine Corporation. Despite the pitfalls, foraying into the global market at this period can be highly profitable to Hunter Valley Wine Corporation.

Conclusion

Hunter Valley Wine Corporation is one of the leading wine producers of Australia. The firm has received several awards and accolades and is currently deciding to foray into the global market. Despite challenges, the global market has opened several opportunities for Australian wine producers due to the intervention of the Australian government in removing significant barriers to trade by engaging into agreements and pacts with diverse nations. The country is currently trying to enter into an agreement with Canada for the removal of trade restrictions for the export of Australian wine in Canada. All these, coupled with viticulture and viniculture mechanisms has helped the organization to maintain a steady supply of grapevines thereby helping in producing bulk commodities of wine. This is a very opportune moment for the company to foray into the global market and thereby further its business establishment.