Video Case
Click here to buy the video case from HBSP
Author(s): W. Chan Kim, Renee Mauborgne
HBSP Product Number: 2309
Language: English
Length:
- Wine Industry Part A: 11'41
- Wine Industry Part B: 6'40
Teaching Notes
Click here to buy the teaching notes from ecch
Author(s): W. Chan Kim, Renee Mauborgne, J Hunter, B Marks, W Mortensen
ECCH Product Number: 307-291-8
Publisher: INSEAD
Description:
In July 2001, Australia's Casella Winery introduced Yellow Tail into the 'red ocean' of the highly competitive U.S. wine market. Small and unknown, they expected to sell 25,000 cases in their first year: in fact, they sold nine times that amount. Yellow Tail rapidly became the number one imported wine and the fastest growing brand in the history of the U.S. and Australian wine industries. It is the overall best selling 750ml red wine, outstripping California, French, and Italian brands. And by the end of 2005, Yellow Tail's cumulative sales were tracking at 25 million cases. This visual video case is presented in two parts. Part A examines the competitive environment of the U.S. wine industry in 2001 prior to Yellow Tail's launch. We find that the industry is overcrowded, highly competitive, and increasingly squeezed at the distribution and retail stages of the supply chain. In short, a 'red ocean.' Part B explores, through interviews with the principal players behind the launch of Yellow Tail, the development and execution of Casella's blue ocean strategic move.
Learning Objective:
To provide a range of outcomes in teaching Blue Ocean Strategy in MBA and executive education settings. Can be used either as a standalone module or as part one of a sequence of Blue Ocean Strategy sessions. Furthermore, the video case is designed to be taught either within a traditional 90-minute classroom setting or as an interactive (one half to one day long) "learning by doing" case study whereby students/executives work through the blue ocean strategy tools and frameworks while developing their own strategy for the wine industry. Only the 90-minute classroom format is discussed in the accompanying teaching note. In either format, the three key teaching objectives are: 1) to show how the two different strategic paradigms, red ocean strategy (or structuralism) versus blue ocean strategy (or reconstructionism), unveil different strategic opportunities, and lead to different profitable growth trajectories; 2) to develop a deep understanding of the concept of noncustomers; and 3) to show how a company's strategic move can reach beyond existing demand in an overcrowded and highly competitive industry. These conceptual objectives can be met by using blue ocean strategy tools and frameworks: Blue Ocean Strategy / Value Innovation strategic logic, the Strategy Canvas, Four Actions Framework, the Eliminate-Reduce-Raise-Create Grid, and the Six Paths Analysis.