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You will be required to perform an audit of a specific firm’s existing distribution channel as part of the course requirements. Essay Example

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1.0 Business Description

The history of Penfolds goes back to the 1844, when Rawson Penfolds, an English physician, migrated together with his wife to settle in Australia. Penfold strongly believed in the medicinal advantages of wine and he and his wife planned to brew a wine brand that could treat anaemia. It grew over time, and by 1903 Penfolds Wines was the largest winery in Adelaide region. It changed focus in 1940s and started the manufacture of table wines to accommodate changing tastes, which through its then chief wine maker Max Schubert, led to the production of Australia’s most famous wine, Grange Hermitage. In 1976, it was acquired by a New South Wales brewery, Tooth and Co, which 6 years later, became part of Adelaide Steamship Company group.

Between 1982 and 2005, Penfolds operated under the different mergers of wineries within Australia, which saw it aggressively advance in further within the European market. In 2011, it became part of the now known as Treasury Wines Estates, a wines manufacturer and distributor. Since then, Penfolds wines have pursued the Asian markets and established strong distribution systems through wholesalers and retailers.

1.1 Product / Service offered

Penfolds wines have maintained superior quality of wines over the years. It is still celebrated as Australia’s most iconic wines producer and continues to dominate the wines market both at home and abroad. It does this by availing sophisticated wines, which are long brewed, uniquely stored and attractively packaged for both all occasions. Penfolds prides itself in its ability to offers its customers a variety of premier wines brands based on the sources of the grapes. Their varieties include single vineyard or block, single region or sub-region and multi-regional wine varieties. Single vineyard brands provide customers with a unique sense of place. The Koonunga hills wines appeals on its richness, balance, value and lasting quality dating back to 1976, whereas the Max’s brand has the classic association perspective. Pinfolds wine products satisfy different customer segments by creating equally superior house wines, consistent in style and quality across vintages. It complements its wines by providing tasting notes, cellaring information and techniques, which adds onto the uniqueness of their brands. Penfolds connects at a personal level with its customers by enabling direct order placement of wines by customers and delivery of the same.

1.2 Strategic Intent

Penfolds Wines has managed to stay ahead of the competition, by being creative in their production methods and wine delivery. This involves farming new grape varieties, cultivating new regions for their grapes, adopting new blending techniques and offering their customers constantly high quality and newly developed wines. It ensures customer loyalty through provision of signature brands like the Grange Hermitage and newer brands that have shaped their own niche within the market segment like the special bins collections. Penfolds has also collaborated with French’s most revered glassmaker, Saint Louis, a move meant to venerate its Grange brand. This collaboration is expected to elevate Penfolds brands even higher in the wine rank.

1.3 Key Strategies

Following sufficient analysis of their strengths, Penfolds has been able to pursue new markets, adopt creative wines production methodologies and advance the quality of wines offered to customers. It has a well-endowed personnel with the right experience in their respective fields, eg, the specialists cultivating, growing and manning their vineyards, and their chief wine maker and the Pinfolds wine makers. With the right match of skill/talent and task, Pinfolds is confident of the grapes that go into its breweries, the wine that comes out of the same, and the presentation of that wine to the customers.

From a wise evaluation of its internal business policies, practices and capabilities, Penfolds has also been able to figure out its weaknesses and avoided losing ventures. It has instead focused on its core business and took calculative risks in advancing new markets and offering new product and service varieties. This way, it has stayed ahead of competition and maintained its wine rank and reputation in the market.

Penfolds Wines has aggressively pursued ready opportunities in the market through a careful scanning and analysis of the market environment. It now has a very well established niche in the Asian markets where it has employed both direct and indirect distribution channels. It supplies wines directly to supermarkets and other retail outlets, as well as utilizes the traditional distribution agents.

In response to the shrinking economic tendencies of the Chinese market since 2012, Penfolds has taken a more bold approach in dealing with the aftermath. Slow sales and a reduction of the customer base in China posed a great threat to Penfolds, which necessitated the need to engage expertise and experienced know how to make a turn around. This worked successfully with Mr. Clarke firing the existing ASC distributor. This new strategy has already proven successful, as Penfolds has received several distribution deals in Yonghui. This is a promising deal for Penfolds Wines as Yonghui is an important market segment with a commendable potential for growth. It has also made a deal with summer gate as their sole importer and distributor across China, where they have deep and broad networks with the market.

2.0 References

1. https://www.penfolds.com/en-au/

2. Simon Evans, (2015). Penfolds Brand hit by China Discounting. [Online] Available at http://www.smh.com.au/business/china/treasury-wines-penfolds-brand-hit-by-china-discounting-20150402-1mdfnt.html [Accessed on May 17, 2017]

3. Summer Gate, [2016]. Official Importers for Penfolds wines. [Online] Available at http://www.summergate.com/en/newsdetail.aspx?newsCategoryId=A70AA9B6-90E6-4020-9AF9-D602EC4071FF&pageNo=3 [Accessed on May, 17, 2017]

4. TWE Global, [2016]. Annual Reports. [Online] Available at https://www.tweglobal.com/~/media/Files/Global/Annual-Reports/2016-Annual-Report.pdf [Accessed on May, 17, 2017]