GLOBALIZATION OF ICEWINE

Inniskillin and the Globalization of Icewine

Inniskillin and the Globalization of Icewine

Introduction

Both Donald J.P. Ziraldo and Karl J. Kaiser formed Inniskillin in 1975 in Canada. Inniskillin is famous for its production of Icewine all over the globe. Inniskillin is also recognized globally for the award earned in 2004 as 'star product of the year' at the ceremony of Frontier Awards. Inniskillin changed its name to Vincor International Incorporation after the manager was bought by T.G Bright and the two companies had merger . The known Icewine by Inniskillin is actually an alcoholic dessert wine, which main ingredient is the frozen grapes of the vineyard. After huge fame and global prosperity, the company Inniskillin and Vincor fell for the Constellation's hostile bid. It is the world's largest wine company (vincorinternational.com). The bid was placed in October 2005 for $944 million. The bid was unsuccessful because Vincor could not obtain the shareholder's support of up to two-third ratio for the bid. This paper comprises of the success factors of Inniskillin in Canada, critical evaluation of global market strategy of Inniskillin, examination of potential global markets, future recommendation for the company along with the marketing plan of Inniskillin (vincorinternational.com).

Pest Analysis

Through Pest analysis, the success of Inniskillin will be evaluated. The factors will explain how the company achieved success in internal and external market. The following are the environmental factor of Pest analysis.

Political factors

The political conditions of Canada comprises of strict regulations related to the production and sales of liquor. LCBO granted Inniskillin license in 1929, making Inniskillin the first winery in Ontario. To improve the standards of wine produced, a Free Trade Agreement (FTA) was signed in 1988 between U.S and Canada. Through this agreement, the Vintners Quality Alliance (VQA) was formed by the governments of Ontario and British Colombia. Inniskillin gained recognition with the help of VQA. From 61 consolidations of wines in 1927 shrank to six in 1974 because of the prohibition of issuance of licenses in Canada which lasted for 40 years. With time, no new licences were issued which made the bigger wineries to buy licenses form small companies for growth in size (inniskillin.com).

Inniskillin got help with this prohibition because it had competition with six major companies, otherwise there would be a different picture. Vincor was allowed to run personal shops of about 165 in number, with the help of clause in North American Free Trade Agreement (NAFTA). With the help of small retailers, Inniskillin reached greater market space. Mostly all the political factors in Canada helped Inniskillin for the establishment of the brand (Moodie, 2005).

Economical factors

Inniskillin faced high cost of production. The reason being the process of manufacturing Icewine which required significantly more yield to make one bottle of grape wine as compared to a bottle of table wine. This also affected the profit margin which was also high. Inniskillin saved its cost and increased its profit margin by its significant location of manufacturing plant. The company was located in the part of Canada where ...