Bonny Doon Vineyards Case Analysis

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WeaknessOne of the weaknesses of Bonny Doon is the power of its growers has. The 80% of grapes required has to be bought from growers and long-term contracts are idle since it is hard to find grape producers with Grahm’s specifications. This lack creates dependency and also creates the no choice but to establish long-term relationships with potential grape growers

V. Summary

The one possible consideration for Bonny Doon’s future path is extending brand to Europe in order to make and import more valued European wines. The company initially had EuroDoon and it was a successful experience. The advantage for expending brand would be: high brand awareness and exponential growth of revenue. Also, the competition between local and foreign distributors can possibly bring positive affect such as quality control can be improved due to nature of competition. In contrast, the disadvantage can be seen such as high capital and operating costs as a starting company in Europe. It involves risks doing international business since U.S and Europe regulations are different and fail of the business can bring significant loss for Bonny Doon. Moreover, as they are located overseas, while they are transporting goods, risks such as goods contamination and natural disasters can significantly impact Bonny Doon’s revenue.

Expanding D.E.W.N. brand requires increasing IT technologies and requires developing new skills which maybe cannot be acquired so quickly. Furthermore, before thinking about to expand the network, problem like grape's supply should be solved first.

Excluding these problems from the pattern, the network could increase total revenues and decrease total margin costs because more things could have made by network. An easier way to connect wines and customers could attract more suppliers and artists to collaborate with Bonny Doon. By doing so, its labels could attract more customers from every corners of the world giving Bonny Doon a possibility to acquire new market shares and to increase brand loyalty between customers.

Grahm will get from starting a retail outlet is the fact that he can exposure his brand to general public. His retail outlet will help consumers to remove the stereotypical mindset of wine which wines are luxurious and expensive. Also, because Bonny Doon’s wine bottles have eye catching wine labels, putting them on shelf will attract more consumers and make shopping for wines more interesting and fun.

However, if he decides to open retail outlet, he will need a large startup capital to open the outlet. In order for the building to hold good quality wines, special equipment needs to be installed to control temperature and humidity. Also, inventory expansion is required to store shelves and to be prepared incase items on shelves run out.

Market Percentage

Growth Rate

Red Wine

1998

1997

1988

98-97

97-88

Cabernet Sauvignon

24.2%

22.9%

22.3%

12%

42%

ZinFandel

23.6%

25.5%

25.9%

0%

39%

Merlot

19.4%

19.5%

3.4%

7%

90%

Pinot Noir

5.7%

5.6%

7.5%

9%

21%

Barbera

5.7%

5.6%

9.6%

8%

-2%

Grenache

5.4%

5.9%

11.2%

-2%

-14%

Rubired

5.0%

5.1%

5.8%

5%

32%

Carignane

3.6%

4.0%

10.4%

-2%

-57%

Syrah

3.4%

2.2%

0.1%

41%

97%

Sangiovese

1.4%

1.3%

14%

Cabernet Franc

1.3%

1.1%

1.0%

19%

49%

Petite Sirah

1.3%

1.4%

2.9%

2%

-30%

White wine

Chardonney

50.2%