1.

Reasons for French industry's worldwide supremacy and competitive advantage:

 Geographical location: France's climate and soil are perfect for winemaking.
Bordeaux became France's top wine exporter due to easy transit. France became
the world's wine leader by harnessing these conditions and accumulating
winemaking expertise.
 Fragmented lands: The French revolution split vineyards. Quality was prioritised
by fragmentation.
 Innovations for mass production: Mass-production advancements like cork
stoppers and glass bottles extended wine shelf life. This boosted French wine
exports.
 Role of Government Regulations: Government restrictions standardised wine
quality. AOC standards guaranteed appropriate product production. This boosted
rivalry among French winemakers to manufacture the best wine.
 Prestige of French wines: Since the French wine industry was strictly controlled,
it had the prestige of possessing the world's best wines. French winemakers
charged more because of this prestige.

2. The rapid increase of market share of New World wine producers in late 20 th century
is explained by the following reasons:
 Availability of cheap and extensive vineyards: After World War II, inexpensive
and wide vineyards became accessible, leading to enormous production in the
US, Australia, and other New World countries. They targeting of unsophisticated
 Unconstrained tradition and Innovations: New world winemakers, unrestrained
by convention, experimented with winemaking and grape growing methods.
Most breakthrough methods and technology, such as drip irrigation, reverse
osmosis, and computerised oak fermentation, were prohibited in France under
AOC regulations. Packaging and marketing saw advancements. Packaging,
transportation, and shipping expenses accounted for 14% of French wine unit
costs (Exhibit 1). Wine-in-a-box and screw closures reduced storage and shipping
expenses and enhanced wine shelf life. Experiments and developments enabled
New World winemakers to create high-quality wine at cheaper prices than
French wines.
 Owning the value chain: New world firms owned the value chain, unlike Europe.
This control increased their adaptability to changing demand patterns and
reduced handling and inventory costs. Winemakers' wine surplus dominated
retail negotiations.
 Targeting unsophisticated palate: With shifting global demand patterns and a
younger population with less wine expertise, New World nations targeted
unsophisticated palates. This adjustment boosted global sales.
 Favourable weather: Innovative farming practises and the sunny weather of the
New World, in contrast to the rainy coastal climate of the Old, allowed farmers
to manufacture wine year-round with modest vintage variations.
 Judgement of Paris: The blind tasting in Paris showed Old World winemakers and
consumers the better quality of New World wines. This victory boosted New
World exports.
 Transportation Costs: As transportation expenses soared and shipping container
costs declined, France-to-UK wine shipping rates were equivalent to Australia-to-
 UK. So, Australian winemakers might price their goods competitively by
transporting equal grade wine to the UK at a reduced cost.
 Focus on branding: New premium customers lacked decision-making knowledge.
New World capitalised by branding its wines and developing customer
confidence. The customers were then steadily upsold.

3. Price and image are issues for Australian wine. Since wine prices can't be
lowered, focus on brand equity. I'll suggest that the head of wine industry
associations invest in marketing the products as premium by collaborating with
mid- to high-end brands and restaurants to showcase Australian wines' higher
value to price. I will tell them to target India and Africa. These regions have
young demographics to create brand loyalty. Final advice: invest in digital
technologies to optimise wine making control systems, create digital brand
awareness, and understand taste and preference patterns. I will advise producers
to find innovative ways to lower production costs, such as rainwater harvesting
and having a side crop in case of drought. Form a committee to convince the
government to improve their irrigation. My final advice is to produce premium
and basic wines since demand will rise in emerging markets.