Economic Analysis Of Schoolhouse Lane Estates Winery.

Thus, the case study opens with Jane (Jan) Thaw having considerable difficulty responding to information she had just received from her cousin, Stan White pertaining to the state of affairs in the wine industry which had begun to decline owing to reduced demand of wines selling above $25 per bottle at retail price. This is against the background of Thaw’s intended plan to expand her Schoolhouse Lane Estates winery located in Cutchogue on the North Fork of Long Island. This brings uncertainty to her business strategy following a negative development in the wine industry.

The level of analysis of Schoolhouse Lane Estates winery is Level 1 since it is related to industrial issues. Of great concern is the fact that the wine industry is mature where there are many competitors ranging from vineyards owners as well wineries. This shows that this is a lucrative industry in which competition exists as illustrated by Porter’s analysis in (Appendix 1).

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The problem to be overcome by Schoolhouse Lane Estates winery is that of competition where there has been a decline in the demand for wine seen as expensive owing to large supply on the market. (Porter’s analysis in Appendix 1 illustrates this).

The wine industry is characterized by strong competition. In 2004, it can be noted that there were 56 Vineyards and 30 wineries and 20 largest firms produced approximately 90 % of all American wine. During the same period, it can be noted that imports were also gaining popularity on the market which further shows that there are many actors in the market.

It can be noted that during the late 90s, white and blush/rose wine sales declined to about 40% and 21% respectively where red wine considerably gained an increase in its sales. It is important for the marketers to be aware of the consumer needs and wants so as to be better positioned to satisfy them profitably.

It can be noted that the market is dynamic and is susceptible to inevitable changes such as the macro environment. Consumers’ spending is also greatly influenced by monetary factors as well as the nature of products available in the market.

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