Situation Analysis

SOUTHCORP LIMITED:

Winemaker’s winding road

SITUATION ANALYSIS

Macro-environment

Global Environment

This is the growing integration of economies and societies around the world. Competition begins to shift from primarily region, national focus on an international or global focus when industry members begin seeking out customers in foreign markets.

Political Environment

This includes government regulations and legal issues, formal and informal rules under which a firm must operate such as trade restriction and tariffs, environment regulations, tax policy, and political stability. Southcorp Limited in terms of trade restrictions whereby the government are encouraging globalization and reductions of protectionist tariffs and entry barriers.

Increasing Ethnic Diversity

Overseas immigration has led to an increase in not only population but also the ethnic diversity of Australia. This has influenced the wine industry with immigrants brining with them new tastes, ideas, skills and technologies that are utilized and capitalized upon wine makers.

Natural Environment

Natural resources that are needed as inputs by marketers or that are affected by marketing activities. Winemaking is an agricultural activity, therefore depend on natural environment. Unpredictability of the weather and rainfall patterns has forced winemakers to carefully plan and monitor the progress of their crops.

Demographic environment

It is the study of human populations in terms of size, density, location, age, sex, race, occupation and other activities. Wine is enjoyed by a greater demographic and is no longer the drink of choice for the upper class only. This and the greater amounts of disposable income consumers are spending on alcohol have had a marked on the industry and has been reflected in sales figures.

Five Forces of Competition

Bargaining Power of Suppliers

Lack of reliance on suppliers

Barriers to Entry

The wine industry has high barriers for new entrants....