Robert Mondavi strategic business analysis

Robert Mondavi Corporation: Strategic Analysis

Robert Mondavi Corporation has dealt in wine making since 1966 and is one of the leading wine companies in the U.S. The Company is organized around three operating units: Robert Mondavi, Woodbridge and joint ventures, and other brands. Its operations are based in Napa Valley, California but have expanded to several other parts of the world such as Chile, Italy and Australia. ("Robert Modavi," 2003-Company website- About Company) This Case Study presents a summary / strategic analysis of the Company's management and financial positions.

Management Summary

Robert Mondavi Winery was founded by Robert G. Mondavi and his eldest son, R. Michael Mondavi in 1966. R. Michael Mondavi is the present Chairman of the Company, while the elder Mondavi at the ripe old age of 90 continues to provide guidance and inspiration to the enterprise that is his own brain-child.

Mission Statement: Producing outstanding wines to become the pre-eminent fine wine producer in the world while promoting the appreciation of fine fines through education among its customers and research.

Strengths: Major strengths of the Company are:

The Company's well-known brand-names and reputation for producing quality wines.

Commitment to its mission statement. The leadership qualities of Robert and Michael Mondavi.

Weaknesses: Overstretched, with too many business partners

Opportunities:

With a growing baby-boomer population, the Company has a potential growth market for wine drinkers that it can focus on and target.

Health benefits of wine consumption are likely to become more widely known in future

The backlash against Europe (and the French in particular) in the U.S. should give a boost to local U.S. made winemakers -- blatant exploitation of the opportunity by Mondavi, however, is not advised due to ethical reasons.

Threats:

Continuing downturn in the currently weak U.S. economy could hurt the wine industry.

Agriculture (e.g., grape growing) is inherently risky with bad weather, and plant diseases always a threat to quality and volume of crop.

Recommended Management Strategy: Focus on consolidation. Sell non-strategic assets. Target the potentially lucrative wine-drinking market of ageing baby boomers by adopting appropriate marketing strategy. Invest in Human Resource Development and Professional management.

Financial Summary

The Company has shown consistent growth and impressive financial results ever since it was launched. This has been reflected in steady profits over the last decade. Since the time of the June 1993 IPO through June 2002, Robert Mondavi's net revenues grew an average of 13% per year and profits 25%.

Third Quarter Fiscal Year 2003 Results

However, the latest Financial Report (Third Quarter of Fiscal Year 2003) shows that Sales volume for the quarter that decreased by 13.6% and net revenues decreased by 11.6%