Vincor International Memo

GROUP 1

Group Memo

Vincor International Inc.

Submitted to

Professor M. J. Kelly, Ph.D.

and

Professor T. B. Kulka, Ph.D.

For the course

The World of the General Manager and Strategic Management

(ADX 5260)

University of Ottawa

September 17th, 2011

MEMORANDUM – FOR APPROVAL

January 10, 1996

Mr. Donald Triggs, CEO

Vincor International Inc.

Subject: RECOMMENDATIONS FOR VINCOR’S GROWTH STRATEGY

Problem

Vincor has become Canada’s largest wine producer by combining effective leadership, aggressive acquisitions and operational efficiencies. Looking forward, the question before us is which growth strategy captivates customers, suppliers, employees, and shareholders? Given the current growth opportunities this issue is viewed as time sensitive.

Strategy Development: Environmental Scan

The current Canadian wine market has plateaued (Figure 1) and tastes are shifting toward premium reds, varietal wines and the grey market (Figure 2). Government de-regulation, limited domestic grape supply, and growing competition, both domestically and internationally, add to the need for Vincor to re-confirm its corporate strategy.

Financial

Vincor’s market share has declined 3.38% over the past five years. Without future growth our strong relationships with bottle and grape suppliers could be compromised. To date, our growth has been debt financed leaving the company severely leveraged and with limited liquidity. Furthermore, our two primary shareholders would like to realize on their investment.

Recommended Strategy

Upon consultation with stakeholders, I recommend pursuing the vision of being Canada’s leading wine producer. This would align with a revised growth strategy that addresses the limitations of current demand through targeted acquisitions, both domestically and internationally.

The establishment of VQA standards and the unmet demand for ice wine internationally presents a point of entry abroad and an exit strategy from the zero sum...