Gallon's low-end image became an increasing liability in the sass as wine consumers began to purchase better-quality table wines in increasing numbers. 2. Privately held company E. & J. Gallo Winery is family-owned, so this company's scale size is not too big. Such company development is slower than other financing companies. Have no more capital development technological or expansion scale. Opportunities 1 . Expansion into emerging markets In wine industry E. & J. Gallo Winery has enough market shares, so develop other products will increase new profit, it can became company diversified development.
For example, drinks. 2. Growing e-Retail industry Nowadays, internet is so strong. So distribution of internet is more and unimportant, growing e-retail can increase sale quantity. It can attract more customers purchase your products, because for customers this more convenience. Threats 1 . Highly competitive market In winery industry have many winery, E. & J. Gallo Winery only bit ahead in wine market. Constellation brands catching up E. & J. Gallo Winery and other winery occupy lots of market share. Have no too strong opponent in this industry. O Some counties will attempts to control excessive consumption of high-proof wines, because someone binge drinking, it maybe violate the law. People looking for a cheap way to get drunk. Salt Lake City and Portland tried imposing bans on the sales of such wines, and E. J. Gallo Winery has many low-cost wines. Strength One of the strongest strength that E. & J Gallo Winery had is they Gallo Winery is an privately owned, family operated corporation and also they are practicing a low cost mass production strategy.
The E. & J. Gallo Winery has an excellent marketing strategy to create awareness for one of their famous low-end white wine- Thunderbird. They were using radio broadcast as a part of their strategy to market the Thunderbird. As a result, they succeed on what they had planned as Thunderbird was on the tops of the sales chart in many inner city and low-income neighborhoods. Another strength own by J Gallo Winery is that they have a strong brand name and image which is currently named as a quality label.
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Besides this, Gallo Winery is practicing a vertical integration strategy. This meant they grew their own grapes, made their own wine, controlled their sales and marketing and owned and operated its wine distributorships. Galloped the wholesaler distributorship in about 10 geographic markets. Another big advantage that E. & J. Gallo possesses is their exclusive access to high grade grapes. They have planted more than 400 varieties in different grape-growing region in California for its ability o produce fine table wines.
Their brand portfolio is among the strongest in the industry with more than 75 brands in its product lineup and was exporting wines to countries all over the world. Weakness Gallon's major competitive weakness is they are well known as a low-end maker of fortified wine labels with screw-top bottles. It's because of an image that flowed partly by Thunderbird and Night Train brands. In short, most of it customer is from low income clientele. Although E. & J. Gallo already distills several lines of Brandy and one Gin label, there are opportunities to reach a broader segment of the alcoholic average market with hard liquor labels.
Opportunity In product development, Gallo planted more than 400 varieties in experimental vineyards and test each variety in different grape growing region of California. The purpose is to produce fine and quality table wines. Furthermore Gallo expand their market to oversea for market expansion. Besides making wine, Gallo conducted a market research concerning buyer behavior and preferences. This is because Gallo Winery wants to improve their performance and create more product line up for its customer. The primary threat to E. & J. Gallo is the economy.
Economy is an external threat for Gallo, when economic downturn people will spend less moreover Americans were infrequent wine drinker according to the research by global standards. Political effects are the major threat to E. & J. Gallo Winery, it is because they need to keep a good reputation and relationship with the government for their export and import wine trading. Besides this, licensing law and tax rates charges for any wine contain more than 21 percents. Gallo Winery sales were decreasing in sass because of the "pop" wines worrisomely bought by the youngster for party purposes.
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