Delamere Vineyards

Group 11

1) What are Delamere's strengths and weaknesses? What does it deliver to the customer
that other Vineyards do not? What does it take to be outstanding in the Wine
business?
Strength:
• Personal attention to quality by Richardson
• Location and grape varieties
• Concentrated plantation resulting in strong taste
• Ultra-premium segment of customers
• Experience in field of wine making
Weakness:
• Increasing wine quality demand and High competition in target segment and
• Weather dependency of the crop and threat of pests
• Capital intensive industry
• High lead time and low returns
• Manual operations
Deliverables to the customer that other Vineyards do not provide:
• Customers of Delamere get to visit the winery and test the process on their own before
buying
• Best quality wine only, personally chosen by Richardson
• Considers the feedback of customers to improvise the process of wine making and wine
quality as per need
Things required to be outstanding in the wine business:
• Risk Appetite: Uncertainty is high in this business. Though the returns are high if
successful, the investor should be ready to lose everything invested
• Capital: A person starting this business should have sufficient and certain sources of
funding
• Passion: A good wine is like a personality and an expression. Without passion, it’s very
difficult to shape the personality of wine which is a very risky process
 • Knowledge: This includes awareness about process of wine making, latest research
findings, climate changes and effect of process variation on wine including prevention
measures

2) What types of uncertainty does Richardson face?

The grape productivity is dependent on climate and the process used by Richardson is quite
vulnerable. The wine made by him is also inconsistent in taste and other aesthetics.
Moreover, there is a gap between demand and supply for the whole industry. The
wholesalers want a more consistent product both in terms of taste and other aesthetics. In
such a situation, he is not sure of what to choose between
(1) Prevention of oxidation to bring consistency in taste
(2) Deepen the color of wine to increase the likability and
(3) Determine the best mix in the crush to improve the aesthetics. He is not confident to
dedicate resources to more than one project and is in a dilemma of what to do?

4) What principles and concepts should one apply to improving a production system
such as winemaking?
To improve the production system of wine making following approaches can be taken:
 Standardizing the process: It involves deciding upon criteria’s such as amount of
oxidization, color of the wine and amount and intensity of the color, proportion of
ingredients.
 Keep the consistency: The taste and quality need to be consistent. The standard
process which is pre decided needs to be followed to maintain the same quality in
each and every production run.
 Automating process: Human effort can be different at different times. In order to keep
consistency human intervention, need to be removed from core processes and
processes need to be automated.
 Continuous improvement: Continuous improvement is required in terms of process
improvement, quality improvement etc.

5) What should Richarson do? How will his personality and experience shape his
decision?
Option A:
Pros:
 It prevents oxidation and improve consistency and fruitiness.
 Capital expenditure will be nil.
Cons:
 It decreases complexity and disruption estimate will be higher
Option 2:
Pros:
  Improve customer reception and there will be 10% price increase
 And, production disruption estimate will be lower
Cons:
 Taste will be altered, and cost will be cost is high
Option 3:
Pros:
 Greater complexity
 Lower cost
Cons:
Customer may reject the product.

Given the quality parameters in Exhibit-2 and calculations in exhibit-1, it, it is clear that
the option 2 is best choice. Expenses are least and the investment can be easily recovered
due to price increase. And the customers will be ready to pay higher due to increased
quality.
Given the personality of Richardson, he will choose option 3. He will be hiring more no.
of employees to do work which has become standardized. He can devote his time for option
2 and resources for option 3.