CASE STUDY BEER AND WINE INDUSTRIES BARTLES AND JAYMES
... Analyzing the case presented we conclude that the functional-level and business-level strategy followed by Gallo Winery is the lower cost strategy. In the 1950’s Gallo had great success with a high-alcohol, low priced wine product which continued to have increasing sales for another 20 years. ... In 1986 Gallo Winery expanded its activities in the wine cooler industry, following the same strategy. They produced Bartles and Jaymes wine cooler which became the largest-selling cooler. ... Concerning the corporate-level strategy, it is clearly stated that the firm is extensively vertically integrated with many divisions in the wine producing process. The Gallo’s own many of the distributors (forward vertical integration) and also make their own wine and bottles (backward vertical integration). As a result of these structures the firm has control not only of the production of wine and bottles but also of the sales and distribution. ... At the point of the wine cooler’s entry in the beverage market, the beer and wine industry had experienced declining sales due to new drunken driving laws, a growing concern for fitness, the raise of the legal drinking age etc.