Global Wine Wars: New World Challenges Old

Assigned Case – Global Wine Wars: New World Challenges Old

1. Introduction

As a result of globalization, a revolution was developed in the global wine market and the competition between the “Old World” and the “New World” has increased dramatically.

The objective of this case is, to explain how the changing industry conditions have provided opportunities to “New World” producers such as Australia, New Zealand and the United States, while simultaneously presenting threats to the traditional wine producers from countries such as Spain, Germany, France and Italy, which are called the “Old World” producers. The analysis also includes the identification of various resources and capabilities of “New World” producers, which allowed them to capitalize on the opportunities and changes in the global wine industry. Moreover the impact of the informal and formal institutions environment will be considered on the contrasting fortunes of “New World” and “Old World” producers and especially, the value of their respective resources and capabilities.

2. Resources-based view of strategy

2.1 Theory explanation of the resources-based view of strategy

There are various illustrations from different people regarding the resources of a company. For example, according to Daft´s description, companies´ resources include all assets, capabilities, organizational processes, company attributes, company´s business information and all other things that is owned and controlled by the company (Daft, 1983). According to Barney a resource is among other things human resources, equipments, capitals and brand. However, regardless which definition of a resource of a company is chosen in the resources-based view of strategy, fact is, that the specific resources and capabilities are a source of competitive advantage.

2.2 Comparison of the resources-based view of strategy in the “New World” and the “Old World” of the wine industry

In order to obtain the competitive advantage in the...