New Business Strategy

MAN 4704 - Spring 2020

New Business Strategy Project

Bianchi Wines

Anton Bianchi and his young family arrived by horseback in the Napa Valley in California in 1890, the first Italian-Swiss settlers in the Valley. They soon planted olive trees and grape vines, living in a handmade stone house built above the original winery.

Anton and his large family grew the business over the initial years, with Bianchi Wines becoming popular in the San Francisco area at restaurants and select wine shops. Over the years the family added new varietals, all characterized by the Bianchi Winery’s efforts to produce world class American wines that exhibit finesse, simplicity and individuality.

The winery stayed in the family over the years and each generation saw the expansion of the vineyard to its current 200 planted acres.

Rosa Bianchi is a fifth generation Bianchi and is the winery’s seventh family winemaker, starting with her great-great-grandfather Anton in 1890. Rosa oversees the entire grape growing and winemaking process from bud break to bottle and is also responsible for overall strategy along with other members of her family that form the Board of Directors of Bianchi Wines.

Rosa graduated from the University of California, Davis in Viticulture and Enology, and has an MBA from the University of San Francisco.

Bianchi Wines distributes to restaurants and wine shops in the U.S. and sells directly to consumers through their website. The Bianchi family has always seen the U.S. market as their focus and have an outstanding track record and consistently strong profitability with this target market.

Recently, Rosa Bianchi, in her role as head winemaker and de facto head of the overall wine business, has spent a lot of time researching growth and expansion opportunities. A few years ago, the company purchased 35 acres, adding to the 200 acres the vineyard has in production, planted the new land with select vines and is seeing that investment near wine production.

Winemakers are often friendly rivals and in one of Napa Valley’s informal gatherings for local vineyards, Rosa listened for some time to a close friend talk about opportunities for expansion into markets outside of the U.S. This seemed like a stretch for the family business, however, Rosa kept returning to the concept in her mind over the next months.

She thought the vineyards production was certainly large enough to justify exporting to other countries and was intrigued by the challenge intellectually and as a potential avenue for maintaining the Bianchi Wine business for foreseeable generations.

Rosa has friends from her MBA program who offered to help her come up with a strategy for potential expansion outside the U.S. After some initial meetings, they settled on some parameters:

1. Bianchi Wines would look to have bottling and distribution capabilities in the new market. Ideally sending barrels of wine to the new market for bottling

2. Since Bianchi Wines has several labels that are for blended wines with a focus on flavor, they believe their products will be in keeping with the favored wines found locally

3. They would like to see a large, if not all, of the new 35 acres’ production go toward this new initiative. This land is planted in several of the varietals Bianchi Wines produces already

4. After much research, the group came back with a select number of countries to consider for expansion:

· Ireland

· Portugal

· Russia

· Italy

· Brazil

· Chile

· Argentina

For this assignment, please put yourself in the place of Rosa Bianchi and her friends and select a country for expansion and produce a compelling case for the new venture. Follow the New Business Strategy format provided.

There is plentiful information online regarding wine consumption in the targeted countries.

Additional information:

Wines produced by Bianchi Wines:

1) Merlot $37.00 in the U.S.

2) Anton Reserve Blend $47.00 in the U.S

3) Cabernet Sauvignon $45.00 in the U.S.

4) Sparkling Wine Blend $35.00 in the U.S.

5) Zinfandel $37.00 in the U.S.

6) Tuscany Red $35.00 in the U.S.

7) Tuscany White $25.00 in the U.S.

8) Sauvignon Blanc $25.00 in the U.S.

9) Bianchi Sauvignon Vert $30.00 in the U.S.

Wine production: Bianchi Wines produces 10 tons of grapes per acre, which makes the equivalent of 7,200 bottles per acre. There are 300 bottles in a barrel of wine.

Wine makers in the U.S. operate with an approximately 50% gross margin, (net sales revenue minus cost of goods sold. Cost of goods sold includes labor costs to produce the wine, but not salaries, benefits of administrative staff).

THE NAPA VALLEY AMERICAN VITICULTURAL AREA is the most renowned winegrowing region in the U.S. and one of the smallest and most diverse in the world. Only 4% of California’s wine grape harvest comes from Napa Valley, with the Napa Valley representing only 0.4% of the world’s wine production.

Napa Valley is blessed with diverse soils, with half of the world’s 12 recognized soil orders and 33 different soil series present. The climate is a Dry Mediterranean climate, which covers only 2% of the Earth’s surface.

Please submit a complete package of slides on each of the specified due dates:

· March 29: First Draft of Slides

· April 5: Revised Slides

· April 12: Final New Business Strategy Slides

After the first two submissions, I will go over your work in detail and provide suggestion for enhancing the strategy, leading to a quality final submission.