Sandlands vineyards case chegg

😀 The case name is "Sandlands Vineyards", more information about the case is in pdf attached.

You will use a number of case analysis tools such as Five Forces, Strategic Fit analysis, Diamond, Value Chain Analysis, Balanced Scorecard, VRIO, etc. when appropriate. You may use outside resources, only to give an update on the company; please make sure you cite your references and clearly give credit to the author(s). Each written case analysis should be not more than 8 single spaced pages (font size 10 or 11). You may want to include graphs, tables and other figures (maximum 6 pages) to support your analyses.

more information is in attached.More recently, a second outbreak during the 1980s forced Californian growers to replant their vineyards. By grafting different kinds of grape vines onto naturally immune rootstocks, growers could avoid phylloxera damage even though the process came with unavoidable cost: it changed the taste of the resulting wine according to some people. Others argued the change was so minor compared to the winemaking process that it was undetectable. Interestingly, phylloxera had less impact on vines grown in sandy soils because they were inhospitable to the insect. As a result, vineyards with sandy soils tended to have a higher fraction of “own-rooted” rather than grafted vines. As of 2016, there were 5,900 wine grape growers in California who farmed just over 600,000 acres. 14 The largest grower, Bronco Wine Company, had 40,000 acres and revenues of $182 million. 15 In contrast, 90% of the growers had fewer than 100 acres and 50% had fewer than 5 acres. 16 These smaller vineyards provided grapes used to make premium wines. Vines became productive three years after planting, remained productive for 20 to 40 years, and then were replaced as output fell. An acre of land produced from 2 to 10 tons of grapes, with high-quality wines at the lower end and low-quality wines at the upper end. Each ton of grapes produced roughly 65 cases of wine. The challenge for all growers was the high and rising cost of land: vineyards ranged from $20,000 to $40,000 per acre in San Joaquin Valley and from $50,000 to $370,000 per acre in Napa Valley. 17 Restrictive zoning and strict environmental regulations meant new land was difficult and costly to acquire. Rising land prices, however, helped offset the low operating margins most growers earned on their grapes—averaging 9% despite considerable variation over time and across growers. Growers with the most prized 4 This document is authorized for use only by zheyuan li in Spring 2020 44285 Aaron Kropko taught by ILGAZ ARIKAN, The Ohio State University from Jan 2020 to Jul 2020. For the exclusive use of z. li, 2020. Sandlands Vineyards 718-438 vineyards, which produced the most expensive wines, could earn higher operating margins, perhaps 20 to 40% or more, but they were relatively rare and few growers disclosed their profitability. 18 In addition to grapes, the other major inputs needed to make wine were equipment (processing, pressing, and bottling machines); labor particularly the services of a skilled winemaker b; barrels to store and age the wine; packaging which consisted of bottles, labels, closures (corks or screw caps), boxes for shipping; and buildings to house the equipment and store the wine. With the exception of skilled winemakers, all of these inputs were readily available from multiple suppliers at competitive prices. Making Wine Most wineries had a head winemaker who ran the process of transforming grapes into wine, a process that involved four key steps: 1) pressing the grapes, 2) fermenting the juice, 3) aging the wine, and 4) bottling the wine for distribution. Each step in the process could be done in multiple ways and required the winemaker’s judgement to achieve a desired taste. For example, in the pressing stage, you could destem the grapes or press full clusters; in the fermenting stage, you could do one or two fermentations; and in the aging stage, you could store the wine in oak barrels which affected the taste or stainless steel containers which did not. For wines in the value segment, the challenge was to blend grapes from multiple vineyards to produce a consistent taste year after year. One of the most important decisions was how much to intervene in the process. The choice was between letting the wine become what it was destined to become—fermentation was after all a natural process that would occur on its own—or manipulating the wine by adding sugar, acid, enzymes, or water. While making wine depended in part on the science of chemistry and growing depended in part on the luck of nature, winemaking ultimately depended on the winemaker’s skill, knowledge, and accumulated experience. As of 2017, there were more than 9,000 wineries in the U.S., and more than 4,000 in California alone. Exhibit 6a shows the distribution of wineries based on size. Most wineries were very small: 80% of the wineries produced fewer than 5,000 cases per year. At the top end, the three largest firms (E&J Gallo, The Wine Group, and Constellation Brands) controlled 60% of total wine production. 19 Gallo, in particular, produced 75 million cases across 90 brands and generated sales of $4.7 billion. 20 Consolidation at the top end had occurred steadily over the past 20 years and was likely to continue in the coming years. The largest firms produced wine in the value segment, yet some of them also produced a few premium wines. For example, Constellation Brands produced Opus One, a “Bordeaux style” cabernet sauvignon that sold for up to $ ...