Yellow Tail Case Paper

Andrea Howell

MBA 815

Professor Fuller

March 6 2016

Yellow Tail Wines

Yellow Tail wines came about when Bill Deutsch and Casella had a meeting in White Plains New York. Both parties were seeking ways to expand their business. Casella needed to find a United States distributor for his wines and Deutsch wanted to add a low price line of wines from Australia to compete with wines from Chile, California, and Italy in the same category. The United States wine industry at the time was a very slow growing market and highly competitive.

In order for any company to be successful in the American Wine Industry as a new entrant it is best for the company to analyze the industry using Porters five forces. Below I will attempt to analyze the wine industry as if I was a new company trying to enter the American Market to gain a part of the market share in that particular industry.

Treat of new entrants: With the American wine industry growth being rather slow, new entries in the wine industry would be a moderate. Companies are not looking to enter the market as much. Companies would have to convince beer drinkers that wine is better or try to convert the older wine drinkers that they have a better product. I do not believe a lot of companies are willing to take the rest; therefore not much new products are being introduced.

Treat of Substitute: Other sprits pose a threat to the wine industry. Individuals can afford to buy other sprits at a cheaper price; therefore they are willing to substitute beer and other sprints for wine. Economic factors often play an important role in an individual’s decision whether to purchase wine or other sprits. While everyone in each social class drinks wine it is cheaper for a middle class family to pick up a six pack of beer than a bottle of wine.

Bargaining power of suppliers and buyers: the suppliers in the American wine industry are more than the buyers, therefore suppliers little to no bargaining power. With a surge of...