Current Market Conditions Competitive Analysis

Week 3 Learning Team Paper

Current Market Conditions Competitive Analysis

Team D: Viviana Flores, Michael Harvey, Suzanne Lang, Denny Morelock, Sarah Westbury

ECO/365

March 12, 2013

Thomas Westover

Current Market Conditions Competitive Analysis

As a part of a strategic planning group at a large corporation that is considering developing a new product, the competitive organization selected is Young’s Market Company (YMC), located in Tustin, California. The product is alcoholic beverages. A competitive market analysis was performed to determine the potential success of an expansion opportunity including both goods and services.

Young’s Market Company was founded in 1888, by John G. Young. Originally, the company sold sausage, corn beef, fish, vegetables and produce, bread, mayonnaise and salad dressings. In 1933, Prohibition ended, and in 1934, the company shifted gears and started to sell beer, wine and liquor. Today, Young’s Market Inc. is one of the largest wholesalers and distributors of beer, wine and liquor brands in the United States with 3,000 employees across 12 states, generating $3 billion in sales, servicing 45,000 customers, and delivering 25 million cases. They have branches in Los Angeles, San Diego, Stockton, Santa Rosa, Eureka, Bakersfield, Fresno and Hawaii.

Young’s Market Inc. is considered to be an oligopoly due to the fact that they hold exclusive rights to different alcohol brands. They created alliances with some independent distilleries and acquired the exclusive rights to their products, thus having product differentiation. Among some of their exclusive brands are Bacardi rum, Christian Brothers brandy and Jose Cuervo tequila. Freedom to enter this market is difficult, and impossible to sell these three brands of products to restaurants and businesses.

The government does offer them exclusivity on products because of their distribution rights. In 1997, Young’s Market entered into a strategic alliance with Sunbelt...