Steve will be a definite strength to WE along with the inherited birthrights of its parent-companies reputation bequeathing WE with a good foundation. Among the inherited strengths of their parent-companies WEs strengths are inclusive of; brand loyalty, absolute cost advantages, an established high quality product, good stewardship and social responsibility, good financial positioning, and strong buying power reputable for their ability to offer the highest quality product at the lowest cost. However, WE has yet to establish their footprint in the marketplace by developing stable customer loyalty in this new initiative to corner the market on hotel and restaurant sales, etc In order to become the leading premium wine distributor for the hotel/restaurant markets WE must establish a stable customer base. Another argument that Steve most defend is preventing managements further consideration of offering high-end spirits under the WE division. Though management may see this as complimentary to its customer base, Steve sees it as a threat to the uniqueness of his division. He also questions the knowledge and ability of the wine salespeople to accurately market spirits.
Nature of the External Environment
The wine industry in the U.S. had done well by 2002, having obtained the position of second largest market for exports. By the mid-to-late 90s with the emergence
of globalization and the disappearance of international trade barriers that once affected this market significantly, new takeover targets have become accessible and consolidation trends became evident. This change in tide had it pros and cons. Globalization allowed for growing markets and access to premium brands that may not have been previously accessible, but it simultaneously created a potential threat to market share by increasing the risk of entry by potential competitors. There was definitely a market for premium wine and statistical data showed that consumers were willing to trad View More »