Bonny DoonWineyard Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Bonny DoonWineyard Case Solution

Alternative Analysis

In the year 2000, when the company was established well and had obtained sufficient popularity in the industry, Bonny Doon Vineyards was contemplating with three possible venture options that were available then and under consideration. These diversified alternatives and options were likely to take the company in different directions. Hence Grahm needed to do the tradeoff between these diverse alternatives based on their financial feasibilities, their integration with the core competencies of the company and most importantly, their fit with the core philosophy of the company’s president. Whatever the direction is chosen by the president, must fit well with the mentioned considerations. These options under considerations are described as following.

1- Expansion of ‘EuroDoon’

2- Retail branching

3- And expanding the sales network

Expansion of the EuroDoon

The first option that was available to Bonny Doon was expanding its EuroDoon in order to import more of the Wines from Europe. According to Grahm, European wines were likely to have exponential value. Since its label named as “Domaine des Blagueurs” which also includes the Heart of Darkness Madiran, and the Syrah/Sirrah was doing really very well as in the year 1999, about 50000 cases were produced. So because of this reason, Grahm was pondering to use this model in various other areas as well. Grahm had also been discussing and made promise with the Italian winery makers in Puglia, Rome’s due east. As per Grahm’s considerations, they also had made the high quality aglianico, uva di troia, montepulciano and primativo varietals.

Pros:

The Puglia vinery makers made promise to the company to produce and deliver high value aglianico, uva di troia, montepulciano and primativo varietals to the company which could contribute to the value creation competencies of the company.

According to Grahm, following this option he could make a virtual partnership with Puglia where he could provide technological assistance to the vinery and in return he would get the wines produced in the vinery as per his specifications.

Given the considerations, this option would be a good fit with his “following value.” Philosophy as he discovered value in the making of the varietals that were undervalue in California like Grenache.

Then he had also been able to pursue the Riesling in the State of Washington, Syrah in the France and following this option would additionally enable him to pursue various kinds of vines in the Puglia as well. In each of the circumstances, he could achieve a good sales volume with the smart packaging and a good quality winemaking.

Both of the Heart of Darkness and the Syrah/Sirrah were doing well in terms of sales volume and contributing good margins of profits to the company.

In terms of its financing, this alternative do not require that much of the capital from the Bonny Doon as it will only pay for the wine whenever it is finished rather paying for the costs of grapes as in the case of local productions.

Also, with this option the company could avail the cheaper options of storage as in the United States, it would require the company to pay for higher costs of wine storages plus the taxes, but in the Belgium, it required lower costs and making it free of taxes until the wines is delivered to the California.

Cons

As per Grahms expectations he could have pursue with a good sales volume by intelligent packaging and good winemaking with the access to the production of variety of wine in Puglia, but unlike to his expectations, things did not go as he expected.

Bonny Doon would have to compete with their own distributors, many of whom were also importers, as a result of importing European wines under the Bonny Doon brand. More time restrictions would result from expanding EuroDoon. As according to Grahm, Sage companions are fantastic, but he don't want them to be so shrewd that they steal his girl.

It would take a lot of supervision to produce wines of acceptable grade. Grahm was already overburdened, and economics would require a relatively high volume to justification for paying a worker

Retail branching

Starting a store was the second choice Grahm was thinking about. Encouraged Grahm believed that "high value" wines could fill a void left by Best sellars in New York. This choice appeared to him to be manipulative. Bonny Doon's winery's and his winemaker's integrity are two major assets.

Following principles would form the foundation of this project:

1) Grahm noticed a store with excellent wine and no "clunkers."

2) The wines offered would be like that consumers couldn't get elsewhere, and would be in the store's distinctive and diversified selection.

3) The shopping experience would involve multiple senses, with a strong emphasis on sight.as well as hearing.

Pros

This option would enable the company to sell the very unusual wine in the market which would ultimately create value to its business. Hence a good fit to the Grahms philosophy.

Following the basic considerations of this project if the company effectively become able to offer the wines that would be like, that consumers couldn't get elsewhere, and this would increase the core competencies of the company.

Cons

The option would require the company to invest a lot of Capital to avail this opportunity.

Expanding the sales network

Finally, Bonny Doon is thinking about growing the D.E.W.N. network, which Grahm called the "really cool one." The Bonny Doon mailing list at this time contains more than 35,000 names. 4,000 of them are D.E.W.N. members. When Bonny Doon was able to gently introduce them to the concept that a D.E.W.N. can originate.

Pros

This could increase their sales without taking them outside of Bonny Doon. Increasing their output. In an ideal scenario, Grahm may be physically although being widespread and providing wines under the Bonny Doon label, California needs them.

Expanding D.E.W.N. would allow for European wines could maximize the potential of Grahm's extensive network of friends and contacts in Europe.

For Grahm, personally, choosing this course would provide him the chance to revitalize his inventiveness. He believes that encouraging people to be more creative is beneficial for the entire globe.

Cons

Due to government regulations that only allow certain kinds to be cultivated on certain types of land and only certain varietals to be commercialized, winemakers in Europe are frequently more constrained.

Recommendations and Conclusion

Although from the Alternatives analysis it could be seen that every alternate is fitting well Grahms considerations, and each alternative has its cons as well as pros. It could be analyzed that the first alternative i.e. ‘Expansion of EuroDoon is fitting well with the core considerations of Grahm that includes their financial feasibilities, their integration with the core competencies of the company and most importantly, their fit with the core philosophy of the company’s president.. It also has a lot more benefits as compared to other alternatives, hence it could be recommended that the company should go with this option because it fit well with the key considerations as well as it has several more benefits comparative to other options.......................

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Bonny DoonWineyard Harvard Case Solution & Analysis