Strategizing at Monarchia Matt International (MMI) Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Strategizing At Monarchia Matt International

External Analysis

PEST Analysis

Applying the PEST analysis will highlight the major external factors that will for sure have an effect on Monarchia Matt International operations in the country, which comes under the political (legal), economical, social and technological domains.

Political (legal)

The US system is highly multifaceted. Each and every state has been governed by its own laws regarding the distribution pattern of the alcohol. Some viewers say that there are 50 different states in US when it comes to legislation by each separate state. States are allowed to ban the alcohol that can also have the state run distribution network; moreover, some have banned the direct shipping between the states. These legislation issues create a serious amount of troubles for the wine industry in United States.

Economic

The icon wines and the upper end of the ultra premium segment posses the reasonably high economic returns. There are hundreds of players available in United States wine industry but E & J Gallo, constellation and the wine group has the maximum share of 29.1%, 15.8% and 12.5% respectively. In recent years, the major US wine companies are acquiring the midsized companies. The analyst says that either the company has to be very big or it has to be very small, but there is no space for the proper existence of a middle sized company. In addition, the economic conditions of United States support the wine industry.

Social

In the United States, pappy boomers having an age over the 50 years fall into primary segment that prefer old world wines in the super and ultra premium category. The generation X having age bracket of 20-30 years of age are likely to go for only new world wines and the echo boomers who are likely to fall in age bracket in between teen to 25 years of age will be attracted towards the less expensive brands and sometimes preferred the Eastern Europe and South America wines as well.

Technological

Since they are planning to target the niche market, and this the reason why they are not worried about the technological aspects because there is no need to have a separate winery. Although, the production cost is also low due to advancement of the technology but that does not mean that wineries start producing access product. Technological aspects have no major role to play at the current situation for Monarchia Matt International.

Internal Analysis

Over all industry has been found quiet attractive for wines. People in United States approximately from all age brackets like to have wine. The industry is flourishing in a rapid manner and addition of Hungarian wines will offer a change to consumer but they need to overcome the image issue of Hungarian wines in the potential market of United States.

VRINE

Value:

The addition of the Hungarian wines will add value to Monarchia Matt International’s over all brand portfolios. This value addition will offer customers to adopt the change and taste these popular Hungarian wines, which will introduce them to the new and best available international taste.

Rare

The idea of introducing and targeting the crowd with Hungarian wines not had been brought up by any other company in such a massive manner. It can be stated that Monarchia Matt International can have the first mover advantage in this regard with such a massive merger by introducing the Hungarian wines in the country.

Inimitable

In United States, majority of states has its own rules and regulation which they follow. By having the massive first mover advantage, then Monarchia Matt International can ask the different state governments to make the distribution rights exclusive for their company.

Non-Substitutable

There are many substitutes for these wines. Juices and carbonated drinks can be playing a vital role in substituting the wines. Since, wines are used for entertaining purposes so these soft drinks and beverages can play an optimistic role.

Exploitable

Monarchia Matt International must look for new opportunities and must target those areas that are not yet been exploited.

Issue Identification

In highly fragmented and complex US market, CEO of the Monarchia Matt International is looking to obtain maximum advantage by introducing Hungarian wines. He is looking forward to take revenues from $6 million in 2004 to $50 million by 2010 but the CEO is also aware of the current market reputation of Hungarian wines in the United States that may not go in their favor initially.

Alternatives

There are two alternates out of which one can be selected by Joern Tittel, CEO of Monarchia Matt International.

1) Establish a new Distribution Network

Monarchia Matt International can come up with the new distribution network to take their product reach at new higher level. They must out source this new distribution network to avoid distribution cost. Furthermore, they must keep the Hungarian wines separate from the existing product portfolio so that the current sales figure of the existing ............................

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At the end of 2004, chief executive officer (CEO) in New York wine distributor Monarchia Matt International (MMI) is looking at its portfolio of wines and wondering what the advantage of Hungarian wine may provide a powerful niche player in the highly fragmented and complex wine industry USA. The Director-General is aware of the reputation of Hungarian wine in the United States as a low-cost, mass production and low quality of the drink. At the same time, CEO known rich wine making tradition in Hungary and is confident that the country's wine varieties can be a key factor, and helps it to grow revenues from $ 6 million in 2004 to $ 50 million in 2010. "Hide

by Michael Rose, Jordan Mitchell Source: Richard Ivey School of Business Foundation 24 pages. Publication Date: March 16, 2007. Prod. #: 907M14-PDF-ENG