Australian companies using globalization to disrupt the ancient wine industry

Abstract

Purpose This paper aims to provide a strategic analysis of how globalization has enabled Australian companies to transform the wine industry. Design/methodology/approach The global wine industry is analyzed from two strategic management perspectives: Michael Porter's positioning concepts and the hypercompetitive framework of Richard D'Aveni with particular emphasis on the success of the Australian Yellow Tail brand. Findings The forces of globalization have caused significant changes in a historically stable industry. The success of the Yellow Tail brand demonstrates how a focused strategy with the right product, distribution and marketing can cause significant industry disruptions. Overall, the D'Aveni framework of hypercompetition seems to best describe the impact of Australian wine companies, although the generic strategies of Michael Porter may still be applicable when considering the French industry. Research limitations/implications The focus is on using two strategic frameworks; there are others which could have been included. The example of Australian wine companies has been used to illustrate the changes in the overall market, but studying other “new world” wine producers such as Chile or Argentina may also add insight. Practical implications The paper provides an example of how the academic frameworks of strategic management can be applied to different industries and shows that dynamic forces of globalization can emerge from any corner of the world and cause dramatic economic change. Originality/value This paper will be of interest to those studying the global dimensions of strategic management and its practical implications.

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