Economic Conditions Strong Market For Australian Markets example essay topic
493 words
1. Identify its international markets US and North America identified o Distribution network - 44 states. o Size - initially estimated 20-30 thousand cartons to 100 thousand cartons, reality was 20 to 200 thousand. o Annual sales $3 million. Uk Some regional supermarkets hoping to expand to majors. Mainland Europeo Some beginning sales. 2. Describe and analyse the reason for its international expansion Increase sales / find new markets - domestic market oversupplied Minimise competitive risk Economies of scale Cushioning economic cycle Comparative advantage High cost of labour and land in US.
3. Explain the influences on this business in the global marketPoliticalTensions between free trade and protection Globalisation seeing removal of barriers e.g. Quotas, tariffs, subsidies - statistics Exports of wine have increased from 3% of sales to 52% of sales in 2002. this equals $2.3 billion dollars or 414 million livres US greatest source of export growth Australia's export policy has led to major reforms in the Australian wine industry 'Rationalisation of wine production' leading to overall efficiency giving them cost advantages over their competitors and reshaping of distribution lines. 4th largest wine exported in the world with 5% of global market International organisations and treaties 1994 Uruguay multilateral agreement (WTO) Agreement to reduce protection on agricultural products (wines / grapes ) by 36% by 2000 UK has the largest export market of wine Trade agreements US and Australia have strong trade relations and trade agreements War in the Middle East Weak economic conditionsSocialConsumer tastes Global markets have been increasingly integrated Growing demand for mass market, high quality wines and a recognisable brand Marketing of wines 'other benefits' has increased consumption globally Strong economic growth period sees wine viewed as a luxury good, something consumers buy when they feel conditions are good as their incomes are increasing. Also at this particular price range fluctuations do not vary with economic conditions Strong market for Australian markets taking off in the US Financial Currency fluctuations Weak Australian dollar has helped making Yellow Tail a better taste at $7 and a lower price than its Californian counterparts which are hobbled by high cost of land and labour Currency fluctuations would have to get way about 70 cents for Casella to be unprofitable without a price change Legal None mentioned 4. Explain the strategies used by the business to achieve its target markets Marketing Niche market Distinctive Australian product - market for Australian wines - packaging iconic for Australia, yellow wallaby franchise for the taste and style of wine.
Yellow tail reserve wines at different price points and several wine styles to be developed Competitive price point between 6 and 7 dollars, five varieties of Yellow tail Fruit forte wine which doesn't lend itself to ageing Export manager was hired - John SoutterIndirect exporting strategy W.J. Deutsch & Sons, a big importer is used; 50% equity in on Yellow tail brand in North America.
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