Penfolds Companys Exporting Strategy Essay

Lit. Guides
>
Free Essays
>
Business
>
Company Analysis
>
Penfolds Companys Exporting Strategy
Cite
Print
Share
Penfolds Companys Exporting Strategy Essay
Exclusively available on IvyPanda
Updated: Aug 27th, 2022
Penfolds is a winemaker operating in Australia and has its headquarters in Melbourne. This company was created in 1844 by Christopher Rawson Penfold and has a significant market share in the Australian market. The founder was initially a physician who made wine for medicinal assistance. Over its years of growth, this corporation has developed significant collaborations. For example, it partnered with American airline Boeing to celebrate its 100th anniversary. Moreover, it has collaborated with National Geographic to uncover stories behind rare wines, and it has also won various international awards. In essence, it is considered one of the best wineries in Australia.

We will write a custom Essay on Penfolds Companys Exporting Strategy specifically for you
for only $16.05 $11/page

809 certified writers online
Penfolds recommended approach to selling wine in the United States is by incorporating an importer and distributor approach for several reasons. The preferred merchant would be Southern Glazers Wine and Spirits. This company is based in the U.S. and is considered one of the largest, with operations in more than 44 American states. Moreover, in 2016, this corporation managed to transport more than 150 million cases of wine (Gilinsky et al., 2018). It also has an excellent call capacity accompanied by an exceptional product experience and customer satisfaction. Southern Glazer also has a diverse cultural marketing team which makes it a preferred choice.

Having selected the potential distributor, Southern Glazers Wines and Spirits, Penfolds will sell its wine cases to the merchant. Therefore, the distributor will be responsible for promoting these products in the United States to attract supermarkets, retailers, and restaurants. This process is beneficial to Penfolds because distributors facilitate international market penetration. Moreover, the US merchant will also take charge of shipment, customs formalities, and documentation, thereby reducing costs (Kostrzewski, 2017). Lastly, Southern Glazer will manage warehousing and inventory control of the purchased stock (Kostrzewski, 2017). In essence, this strategy will be cost-effective for Penfolds as its exporting initiative.

Sea freight is relatively cheaper than air shipping and also gives the consigner the chance to transport large quantities of goods. It starts from the Port of Adelaide to the United States Port of Miami. The cost of overseas transportation is approximately 15-18 cents per liter of wine (Rickard et al., 2018). Moreover, the US also incorporated a policy to impose 25% tariffs on wine products with 14% alcohol levels (Rickard et al., 2018). Lastly, over four liters of wine are subject to an import duty of 4.8 cents per liter and excise tax of 28.27 per liter (Amiti et al., 2019). In essence, sea freight is the most feasible means of transporting wine to the United States.

Sea freight transportation is adopted due to several reasons. For example, wine is transported via ISO tanks due to its large size. Moreover, these containers have air-tight seals, which will help in preserving the delicate flavors and aromas of the wine (Rainer et al., 2019). While they may be acquired at a hefty fee, these containers are vital for wine transportation because they offer excellent security while preventing cross-contamination of wine. Generally, water transportation is considered cheap and feasible for shipping wine its large quantities (Varsei & Polyakovskiy, 2017). In essence, Penfolds should consider incorporating these strategies in its exporting approaches.

The cost of transporting wine from Australia to the United States involves the following. For example, the transport process will incorporate loose shipping of wine in ISO tanks. The cost of purchasing a 25,000-liter inter-modal container is approximately US$ 11,000, accompanied by a $2.1 per kilogram for shipping (Varsei & Polyakovskiy, 2017). Moreover, the tariffs involve are approximately 25% for wine products with alcohol levels above 14% (Amiti et al., 2019). Lastly, Penfolds will incur costs associated with bottle packaging of the wine by the distributor.

In the first stages of market expansion, Penfolds will adopt an exporting strategy. It is because this is a low-risk approach for collecting market data for a potential long-term investment (Samiee & Chirapanda, 2019). Moreover, this enables Penfold to consider expanding its product line to include other alcoholic and non-alcoholic beverage products. In addition, Penfolds will also increase its geographic coverage to include other emerging markets. Lastly, the winery will formulate a strategy for incorporating a unified and extensive distribution network to support its product mix. In essence, the company will be able to evaluate the possibility of long-term investment.

Get your 100% original paper on any topic done
in as little as 3 hours
A horizontal FDI involves purchasing a foreign company that manufactures the same products as the buyer. It is a recommended approach because it helps avoid trade barriers and gain better access to domestic markets (Samiee & Chirapanda, 2019). Moreover, Penfolds adopts a geographic segmentation by developing diverse consumer profiles. In addition, it also establishes different stores to support its geographic strategy. Research and development will be vital for improving its product mix while also implementing selective distribution approaches. This strategy is a combination of both intensive and exclusive distribution systems.

The recommended strategy is foreign direct investment for long-term benefits to the winery. This approach is cost-effective and will help Penfolds eliminate trade barriers such as exporting fees incurred in its short-term strategy (Samiee & Chirapanda, 2019). Moreover, the winery will become a multinational corporation by assuming simultaneous production in its home and foreign countries. In the long run, the winery will successfully overcome entry barriers to the United States domestic markets. Moreover, it will also increase its global market share considering that it implements horizontal foreign direct investment (Samiee & Chirapanda, 2019). In essence, Penfolds should consider the long-term benefits that emanate from incorporating these strategies.

The wine industry in the United States has been gradually growing. As such, several wineries are operating in this market segment, and they have also generated considerable sales of wine cases. Examples of some of the leading brands in this market are E&J Gallo Winery, Constellation brands, Trinchero Family Estates, and The Wine Group (Gilinsky et al., 2018). An estimation finds that E&J Gallo Winery has the most significant portion of the market share. According to the financials of Penfolds in Australia, its estimated market share in the United States would be 21% ahead of some wineries. Therefore, the company will have to improve its marketing approaches to gain more market share.

Estimated Market Share
The table above indicates the projected financials of Penfolds sales of wine in the United States from years one through five. The winery expects to generate $850,000 in sales revenue in its first and second years of product introduction. The cost of goods sold in these respective years would amount to $500,000 with a gross margin of $400,000. The total operating expenses would amount to $15,000 due to the marketing and promotional campaigns to create awareness of the wine products. Penfolds is expected to make a net profit of $25,000 in each of the respective years. Moreover, the rest of the projected financials are indicated in the table above as derived from Penfolds current financials in the Australian wine market.

Penfolds is one of the leading wineries in the Australian market. The company intends to invest in United States marketing to expand its geographical coverage. It adopts a distribution strategy of exporting its wine cases to this market, and the preferred merchant is Southern Glazers Wines and Spirits. In addition, it utilizes sea freight transportation due to its cost-effectiveness and capacity to ship large quantities of products. In essence, Penfolds opts for horizontal foreign direct investment, which involves purchasing a foreign company with its industry in the United States.

References
Amiti, M., Redding, S. J., & Weinstein, D. E. (2019). The Impact of the 2018 Tariffs on Prices and Welfare. Journal of Economic Perspectives, 33(4), 187210. Web.

Bhattacharyya, S. S. (2020). International business strategy: Development of an integrated framework and typology. Review of International Business and Strategy, 30(3), 345- 373. Web.

We will write a custom Essay on Penfolds Companys Exporting Strategy specifically for you!
Get your first paper with 15% OFF
Gilinsky, A., Newton, S., & Eyler, R. (2018). Are strategic orientations and managerial characteristics drivers of performance in the US wine industry? International Journal of , 30(1), 42-57. Web.

Kostrzewski, M. (2017). Implementation of distribution model of an international company with use of simulation method. Procedia Engineering, 192, 445450. Web.

Rainer, G., Ptz, R., & Steiner, C. (2019). The emergence of new wine design practices: Flexitanks and the assembling of bulk wine across global rural regions. The Geographical Journal. Web.

Rickard, B. J., Gergaud, O., Ho, S.-T., & Livat, F. (2018). Trade liberalization in the presence of domestic regulations: Public policies applied to EU and US wine markets. Applied Economics, 50(18), 20282047. Web.

This essay on Penfolds Companys Exporting Strategy was written and submitted by your fellow student. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly.
Removal Request
If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda.
Discussing Starbucks Data Analysis Strategies
Eastman Kodak Company’s Intended and Actual Organization
Find free essays, topics
Need a custom Essay sample written from scratch by
professional specifically for you?

806 certified writers online

CITE THIS PAPER
Select a referencing style:

COPY TO CLIPBOARD
APA-7
APA-6
Chicago (N-B)
Chicago (A-D)
MLA-9
Harvard
Reference

IvyPanda. (2022, August 27). Penfolds Company’s Exporting Strategy. https://ivypanda.com/essays/penfolds-companys-exporting-strategy/

Powered by CiteTotal, reference generator
MORE RELATED PAPERS
The True Meaning of Marketing
Group Project of wineries companies
Mount Nittany Vineyard and Winery Company Analysis
Google Inc.: Its History and Issues the Company Is Facing
Wal-Mart Global Empire: Organizational Research and Theory
Starbucks: Company Analysis
Role of Tesla in Electric Vehicle Development
Gillette: Company Analysis
3 hours!
We’ll deliver a 100% original paper this fast
Learn More
Paper Details
Reading time 5 min
Type Essay
Pages 6
Words 1226
Subjects Business Company Analysis
Language
English
Related Papers
Blue Mountain Herbal Teas Company’s Distribution Channel Options
Wine Not: The Future of Wineries and Vineyards as Event Venues
E. & J. Gallo Winery
Georges Winerys Marketing and Business Plan
E & J Gallo Winery Strategy
Small-Scale Winery: Maintaining a Premium Brand
Mondavi Winery: The Process of Going Public
Open support chat
Your privacy is extremely important to us. We utilize security vendors that protect and ensure the integrity of our platform while keeping your private information safe.
Contact Us
Phone
USA
+1 (866) 236-7979
Canada
+1 (800) 303-8389
Office
,
, . , , , , , .
Study Hub
Free Essays
Writing Tools
Lit. Guides
Donate a Paper
Q&A
Study Blog
Referencing Guides
Free Textbooks
Tongue Twisters
Company
About Us
Contact
Honor Code
Job Openings
Expert Application
Video Contest
Writing Scholarship
IvyPanda Shop
Legal
Terms and Conditions
Privacy Policy
Cookies Policy
Copyright Principles
DMCA Request
Service Notice
About
This is IvyPanda’s free database of academic paper samples. It contains thousands of paper examples on a wide variety of topics, all donated by helpful students. You can use them for inspiration, an insight into a particular topic, a handy source of reference, or even just as a template of a certain type of paper. The database is updated daily, so anyone can easily find a relevant essay example.

Get Professional Assignment Help Cheaply

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

Plagiarism free papers
Timely delivery
Any deadline
Skilled, Experienced Native English Writers
Subject-relevant academic writer
Adherence to paper instructions
Ability to tackle bulk assignments
Reasonable prices
24/7 Customer Support
Get superb grades consistently

Online Academic Help With Different Subjects

Literature

Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.

Finance

Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!

Psychology

While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.

Engineering

Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.

Nursing

In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.

Sociology

Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.

Business

We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!

Statistics

We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.

Law

Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
We will have a different writer write the paper from scratch.
Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment Help Service Works

1. Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2. Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3. Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4. Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

smile and order essay PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!