Professional Documents
Culture Documents
1. Introduction
Introduction
In 1981 Andrew and Cynthia Hendry first established the Coopers Creek winery with the aim
of producing the very highest quality wines. During 1990 and 2004, Coopers Creek and New
Zealand wine industry experienced significant environment, industry and organisation change
resulting in shifting network arrangements to meet domestic and international demand. This
strategy allowed Andrew Hendry, the managing director, to consciously manage growth of
the company to retain the benefits of small size.
Background to coopers creek & New Zealand Wine industry
New Zealand economic growth remains strong in international markets, but also acts in
accordance with the limit of the variable size of grapes and currency fluctuations. Coopers
creek’s annual production was in the range of 900,000 litre, around 96,000 cases, and the
production at Coopers Creek was set up to produce in 25-30 tonnes batches. In 1982 Coopers
Creek became one of New Zealand’s more successful medium sized wineries by following a
strategy of resource leveraging via networks of co-operative relationships with other New
Zealand wine makers in the domestic and export markets. However, with increasing
globalisation of the wine industry, the changing nature of export markets, the early maturity
of the New Zealand industry and the constrained supply facing New Zealand wine makers,
Andrew Hendry was faced with the decision of how to position a smaller company for the
future. He had to decide whether the network-based strategies that served the company so
well continued to be appropriate under conditions of industry concentration, increasing
competition and emerging globalisation.
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producers would be managing the growth of processing facilities and the marketing and
promotional efforts which would be required. Overall demand was declining; demand in non-
traditional wine drinking regions was growing, especially for New World wine and high
quality single varietal wines, such as New Zealand Sauvignon Blanc. The New Zealand
industry was studying demand structures in its international markets and was planning in
order to control supply to maintain the price premiums it achieved from quality and
differentiation. This trend increased pressures to reduce margins to achieve or maintain retail
positioning. The New Zealand industry could expect increasingly fierce competition in its
target markets; with the risk that New Zealand’s Position as a quality niche producer could be
emulated and challenged by other new entrants. Due to the deficiency of planning that super
markets were emerging as a major buying force for the industry, although consumer demand
appeared to be fragmenting around new grape varietals and wine styles. The issue in the
organizing the changing nature of the UK wine guild in New Zealand coincided with a
change of staff in the London office and the perception that there were fewer attendees per
winery at organised tastings. The other main issue for Cooper’s creek and New Zealand wine
industry was control. Cooper creek and New Zealand wine industry faced the issue that
volume of grapes and exchange rate fluctuation that they cannot control and they cannot
control the weather because the grapes need special kind of weather.
Source: (Study guide, 2008)
In organisation there are mainly these types of issues e.g. planning, organising, leading,
controlling. These are follows as under:
2.2 Planning
Most business would not adopt a new business strategy, such as opening up a new office or
shop, without first doing some very careful planning. Planning helps to ensure that the
precious time, money and energy invested in any new strategy are not wasted. Without good
plans new ventures can easily go wrong, due to such things as poor timing, unreasonable
expectations or even adopting the wrong approach in the first place.
2.3 Organizing
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It comes after the planning phase; in this phase in organisation develop the structure to
implement the strategies. In this phase company determine the way where company will go
and operate.
2.4 Leading
The issue related to Leading if they cannot get the good Leader or Leadership. Leadership is
the ability to inspire confidence and support among the people who are needed to achieve
organisational goals.
(Chan & Maubourgne 1992)
2.5 Controlling
Control is one of the managerial functions like planning, organizing, staffing and directing. It
is an important function because it helps to check the errors and to take the corrective actions
so that deviation from standards are minimized and stated goals of the organization are
achieved in desired manner. There are some things which cannot be controlled by the
organisations.
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Controlling Organising
Keeping up standards Develops an organisational structure to
implement strategies
• Assess and monitor
performance • Determine the way the
business will operate
• Compare with set standards
• Choose taks to be done
• Identify variants
• Determine the input mix
• Take remedial action
• Assign tasks
• Delegate authority and
responsibility
Leading
Use of power or influence to get the best
out of workers
• Give clear directions
• Set the example
• Communicate
• Motivate
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As international trade in wine has increased and, through WTO Rounds and such agreements
as Trade-Related Intellectual Property trade has been liberalised, new barriers have arisen as
competition has increased from new entrants.
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New Zealand wine producers faced big challenges in the few years that the exports volume
was doubled with static consumption and worldwide supply. The main challenge is for the
Coopers creek that the investment in processing capacity and market development will be
needed over the next four years to handle the increase in production. Contract prices are
expected to fall slightly in the medium term as production volumes increase and exports
prices fall. Due to static consumption and oversupply, the challenge for New Zealand
producers will be to maintain both their wine’s reputation for quality and the prices they
currently receive. UK is the largest market for cooper’s creek & New Zealand Wine market
has allowed UK importers to reduce prices for New Zealand wines. This is the real challenge
for the Cooper’s Creek because of global competition wine industry. The real challenge for
the Coopers Creek and the wine industry’s future will be determined by how successful it is
in investment in terms of marketing, branding and promotional strategies. The New Zealand
industry could expect increasingly fierce competition in its target markets; with the risk that
New Zealand’s position as a quality niche producer could be emulated and challenged by
other new entrants.
Source: (study guide, 2008)
Source :( Maf.govt.nz, 2008)
3.3 Opportunities
The opportunities for the Coopers Creek and New Zealand wine industry is to go into the
Asian market. It already enters into the Singapore market. Asian market had not been a strong
focus for Coopers Creek so Coopers Creek can go for the Asian market to gain the market
share. In other parts of European market Andrew had explored a number of opportunities. In
2004 Coopers Creek was the biggest New Zealand market in Canada then Coopers Creek can
more concentrate on the Canadian market because it can fully control the Liquor market.
Source: (Study guide, 2008)
4 Alternative Solutions
There are some solutions for Coopers Creek to gain the competitive advantage and to gain
the market share. Coopers Creek can focus on the export strategy with collaborative and
individual efforts. Coopers Creek should concentrate on the wine quality because there are
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some problems which they sell different wine under same label. They can try Total quality
management. With this they can differentiate their product according to the cost and with
quality. If they concentrate on the Total quality management then they can easily compete
other domestic competitive. First Cooper Creek should slowly take over the New Zealand
market and regularly they concentrate their other foreign market such as Canada, UK, US,
and All other European market. Coopers Creek should have to fully control over their supply
chain. If they look at their supply chain management then they can be remain independent in
the market to gain the share and profit. Coopers Creek should consider the entire thing to
build a good relationship with their customer and suppliers. Due to remain in market as
independent, Coopers Creek can build a strong brand image in the consumer mind with good
quality products.
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Conclusion
In my opinion, Coopers Creek have problems and some challenges in the wine industry. They
have problems in the UK market and also in the domestic market with grape growers but they
can fix the problems with the focused export strategy and with the collaborative
arrangements with overseas producers. I recommend that the company should collaborative
arrangement with overseas producers to gain the market share and they should look at the
total quality management that they can build strong brand image.
References:
Parminter, I. (2002). Situation and Outlook for New Zealand Agriculture and Forestry
(SONZAF): Wine, New Zealand Ministry of Agriculture and Forestry,
http://www.maf.govt.nz/mafnet/rural-nz/statistics-and-forecasts/sonzaf/2002. 2002.
Rabobank, I. (1999). The world wine business. Utrecht, Rabobank International: 86.
www.foreignminister.gov.au/speeches/2001/131101_fa_wine.html
Coopers Creek 2008, Market, [online]. Available at
www.cooperscreek.co.nz/market [viewed on 10 nov.]
Leadership book
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