ABOUT THE COMPANY

Chateau de Vallois is a family owned wine making

Estate with a long term track record in quality and

reputation.

Classified as a Premier Grand Cru Classe meaning First Growth in a ranking of Bordeaux wine estate to place top

tier prices on its wines.

ABOUT THE COMPANY

CHANGES PROPOSED

• Enter the ‘affordable luxury’ market with a branded wine

• Target average, younger people to buy regularly

• Obtain greater flexibility

• Buy land overseas and capitalise the brand

• Sell directly to customers e.g. online sales

• Invest in new marketing and distribution channels

ISSUES

• Cons of chaging the brand

- Modern view and the traditional view

• No thorough ananlysis or study done in implementing organisational change

• Cost problems

• Negitiations and Distributors

• Maintaining the brand equity

STAKEHOLDERS

Gaspard de Sauveterre-Owner of Chateau de Vallois

• Possesses 50% of the estate

• Traditional perspective

• Worried about business sustainability for future generations

• Must make decision

Clare de Valhubert-Granddaughter of Gaspard

• Possesses 25% of the estate

• Newcomer

• Modern perspective

• Proposer of change1. Enter the affordable luxury market2. Sell directly to customers3. Cpitalise the brand4. New marketing and distribution channels

Francois de Sauveterre-CEOChateau de Vallois

• Possesses 25% of the estate

• In control of the day to day operations

• Traditional perspective1. Worried about reputation and loss of exclusivity of brand2. Does not want to serve relationship with negociants and

distributors3. Does not believe in investment of low quality, low priced

wine4. High sense of tradition and family pride

Jean-Paul Oudineaux-Estate Manager

• Worked 30 years for the estate

• An agricultural engineer

• Traditional perspective:1. Does not want to make wines with other grapes2. Believes production of two wines is enough3. Question operations: who will make the wine?

NEGOCIANTSMerchants and Dealers

• Wholesalers who buy the wine from de Vallois

• Sell and ship wine to distributors and importers

• Reputation determine the price

• Holds a good reputation with de Vallois

• Purchases wine before bottling

• Traditionalist perspective

Nature of Organisation

Famly Business

• Both advantageous and challenging

• Inherited wealth can be intimidating

• Profit goals can be secondary

• Long term cash flow perspectives

• Based on principles of trust

Why change?

• Political, Economic, Socio cultural and technological reasons

• External and internal reasons

• Internal (cost, family pressure, losses, profit reduction

• External (increased competition, technological development, industry in recession)

Why not to change?

• Disruption to routine is not liked

• People may fear job security

• Cost

• Strength of old culture

• Maintaining brand equity

Expert Opinions

Corinne MentzelopoulosOwner and CEO of Chateau Margaux

• The estate’s reputation will be at risk

• No experience in launching and capitalising a brand with a lower price point

• Highly unaware of the mass marketing segment of wine industries

• Company will need to compromise their time for producing new brand, potentially damaging their already existing wine

• Recruiting new manager could divert the focus of the estate from Chateau de Vallois

Phillippe Sereys de RothschildVice Chairman of his family’s estate

• Proceed with caution

• Keep exclusively branded wine independent to the new brand

• Create two distinct business units within the organasation

• Their marketing strategy (for the exclusive brand) should emphasize the preservation of their brand

• Implement direct marketing, helping the estate better understand the wine market and distribution methods

Recommendations

Boards of directors with a non family majority to resolve the issues without biased perspectives and create an

effective business plan

1

Claire is inexperienced and should therefore let managers and CEO take on the second branch whilst Claire remains

in a more suitable role

2

Either create their second ‘affordable’ brand as a completely different brand altogether, not assuming its

connection to the traditional ‘exclusively’ braded wine so as not to impact customer’s view negatively and maintain

their reputation

3

Create an even more exclusive brand of their wine to positively impact customers and maintain their

organisation’s image

4

• There is a concern about brand equity and product life cycle

• It is important to maintain brand equity, but maintaining the brand equity should not hinder stop the changes in the product line as the life cycle of a product clearly shows that the life of a product declines after some time and there arises a need for a “push” by introducing some changes in the product line.

Some Basic conceptsfrom Kotler