Global and International Business Context Essay

Global and International Business Context - Essay Example It was worth $263.8bn in 2009 and is forecast to continue growing, albeit slowly (ibid, p.2). Europe is the largest market for wine, holding 80.5% of the market by value. The Asia-Pacific region, which includes Australia, is worth 6.9%. The main buyers are supermarkets and hypermarkets, taking 37.9% of the market volume (ibid, p.14). Entry to the market does not require a large company or major capital investment as high quality wines command premium prices (ibid, p.15) but Datamonitor assess the likelihood of new entrants as being weak with moderate competitive rivalry. The Australian wine market is fairly fragmented with the top three producers holding just under 50% of the market by volume (Datamonitor 2010b). It was worth $5,768.4mln in 2009 and is forecast to grow at approximately 2% per year, which is faster than the global wine market (ibid, p.2). The main provider of wine is Foster’s Group Limited, holding 20.8% market share by volume. Buyer power is more important in Australia as there are low switching costs to alternatives and an unusual concentration of food and beverage suppliers (ibid). For new entrants, there are barriers to entry: import duties, taxes and large distribution costs of imported wines (ibid). Competitive rivalry is considered moderate. Producers can use branding to strongly differentiate their products, providing a wide range. The primary distributors are specialist retailers, holding a share of 73.4% by volume in 2009 (ibid, p.23). For foreign producers, the options for entering the market include starting a new company or exporting. If exporting, there are a number of indirect taxes and duties that account for 50% of the value of the imports (ibid, pp.14-15) but if importing a premium brand, market entry can be achieved successfully by adding a large margin to account for the taxes. Datamonitor assess, however, that the likelihood of new entrants is