SWOT ANALYSIS
Company Analysis SWOT Strengths Robert Mondavi founded his Napa Valley winery with a simple vision: “To do whatever it took to make great wines and to put Napa Valley on the map, right alongside the great winemaking centers in Europe”. By making sure that their product had a strong brand name recognition, that helped the Robert Mondavi wine company to be recognized by 67% of U.S. wine drinkers, which sounds sufficient compared to the market leader, Gallo with 70%1. Robert Mondavi Corporation has made sure to keep quality as one of their top priorities. The company owns some of the world’s leading wine brands in Robert Mondavi and Opus One (a 50/50 joint venture with Chatreau Mouton Rothschild). When people are seeking to try something new, they tend to rely heavily on recognized brand names to escape the risk of buying an unknown wine they do not like. In addition, Robert Mondavi Company is recognized as a high quality brand. In fact, sales of premium wine have grown steadily over the last 30 years, and the over $10-a-bottle segment grew more than 15% in 2001. In addition, as Michael Mondavi says, “when there is a concern in the economy, people are afraid to buy Chateau No Name and they come back to the names and brands they can trust”. This company pursues the highest quality with a commitment to the environment that ensures the health and vitality of its vineyards for generations to come. The Robert Mondavi Winery was among the first in Napa Valley to adopt a natural farming and conservation program two decades ago. Robert Mondavi has been the leader in creating sustainable winegrowing programs on the Central Coast and in the Lodi-Woodbridge area and was the first wine company to receive an “Innovator” award in 1988 from California’s Environmental Protection Agency. Robert Mondavi was the first wine producer to also sign a Safe Harbor agreement, which allows a landowner to create or improve habitat for endangered species without fear of new restrictions on land use. 3 Robert Mondavi’s wine team has strengthened significantly in the last few years. With the Mondavi family occupying keyboard positions and setting the strategy and standards for excellence, strong outside directors and an experienced management team are charged with executing the strategy. The board and managements committee has also adopted an Economic Profit (EP) as a key metric in measuring the financial performance of the company’s brands. EP is the incremental financial return generated over the company’s cost of capital. Another key strength of Robert Mondavi wine is their geographic location. This location allows them to produce high quality wine. During much of the 1990’s, the supply of grapes from California lagged growing demand. Today there is an ample suppy of high quality grapes in California. This allows Robert Mondavi the opportunity to tap into new sources of demand and new channels of distribution. In addition, Robert Mondavi’s grape supply is rapidly shifting toward more internally-grown fruit as newly planted vineyards in Monterey and San Luis Obispo counties reach maturity and provide lower cost, and higher quality fruit.