Bonatelli Wines Essay

Question:

Write an essay on Bonatelli Wines.

Answer:

Bonatelli Wines is a premier wine company based in Australia. They are located in the heart of McLaren Vale wine district in South Australia. They are a producer of fine quality wine. Australian wine is known for their finishing and taste. They have been producing boutique red wines for years. Bonatelli Wines Pty Ltd is situated on a 65-acre property in a vineyard of South Australia. Tony Bonatelli is the owner of the company. They have been producing three types of products. These are Cabernet Sauvignon, Shiraz and Merlot (Hughes and Wang 2014).

a) Mission and Vision

The mission for Bonatelli is to produce quality products. To give the wines at a reasonable rate is their vision.

b) Strategic Goals and aims

Bonatelli’s aim is to establish and maintain a thriving family business that is providing them an enjoyable lifestyle and comfortable standard of living.

c) Size and capabilities of Bonatelli Wines

Bonatelli Wines have 300 employees working for them. They have no branded products for sale. They believe in exporting bulk orders. They are having the capability of producing 30,000 bottles of wine per day. They export around 500,000 cases of wines per year (Hughes and Wang 2014).

d) Products of Bonatelli Wines for entering international market

They have three products. These are Cabernet Sauvignon, Shiraz and Merlot. They have a reputation of giving quality product and value for money. Their products have huge popularity in US. They have been offering quality wines at a reasonable price. The bonatelli wine ranges for $14 to $17 per bottle (Thompson 2016). They are considered as the premium sector in the wine industry. They want to enter another international market for providing better business opportunities to them. They are restructuring their products for capturing the customer attraction. They are determined to maintain the standard of the products for winning the customer loyalty and recognition.

2. Global Business Environment

France is ranked as world's eighth largest economy, and it is the part of world's strongest economic area. It offers an entrepreneurial economy for the expansion of a bank. As the country resides in the Western Europe’s heart, France makes the accommodation of expanding business (Chen 2015). It is the third largest receiver regarding foreign direct investment. It provides a large opportunity for the banking business as its economic status is quite high. The companies and the tax system are quite well managed in France. Commonwealth Bank of Australia can find a healthy selection in France as all the high service standards and modern conveniences like the internet and telephone banking are available (Thompson 2016). As French people typically prefer the French language in local banks, if foreign banks are set up, then foreigners will get the opportunity to make transactions through communicating in English. Bonatelli can always venture into the French economy as it is having various opportunities.

3. Trade Patterns, Politics and agreements

a) Trade Patterns, Politics and agreements between Australia and the chosen countries

France being a developed economy is an active participant in the world trade. After the World War II, it saw closer ties with Germany would initiate greater economic strength and political security. Foreign investment in France had taken a rise since 1990. The France’s foreign direct investment in a form of start-ups made a creation of more than 30000 jobs in 1999, 8% higher compared to 1998 (Lin, Wu and Nga 2013). The trend was likely due to the skilled labour force of France combined with the government's efforts for making France attractive to the foreign investors. The banking field created 15% of new jobs going France is the fourth largest receiver of the international investments. It has ensured that French government has much bank balance. Their people lead a healthy and trendy lifestyle. A Premium class of Australian wine can only add the aristocracy of the people in France.

b) Potential affects of the patterns, policies and agreements on marketing and business opportunities

Environmental matters

Every society has to make maintenance of few links with the past that deals with future challenges and the present. The societies which is a less scorer on this dimension in generally have preference to maintain time-honored traditions while societal change with suspicion such as France (Thompsom 2013). Those having a culture that has high scores encourage thrifts in modern education like Australia.

Human rights

The difference in labor cost between Australia and France is an important issue to set up business in the French nation. It has been seen that the labor costs are comparatively high in France than Australia. In the year 2015, the labor cost index of France and Australia were 106.24 and 102.5 points respectively (Thompson 2013). As a result, Bonatelli Wines will incur more costs during production if it hires employees from France. Thus, the margin of profit will be reduced if employees are recruited from among French people.

Labor relations

Labor Requirement from Australia: For handling the issue regarding higher cost of labor, Bonatelli Wines should recruit majority from Australia in their production unit at France so that the overall manufacturing cost gets decreased in totality leading to better profit margin. The company should hire only a few from France, those who are considered essential for the growth of the company.

Packaging

Bonatelli Wines have enhanced the packaging. They are giving 12 bottles of wines per case. The bottles are exported in cardboard boxes. It is giving the company a reputation for their good packaging.

Risk Management

The French economy has recovered gradually after contending with relatively little growth in the recent years. The economic activity was not able to decrease the unemployment that has risen steadily and is currently above 10%. France's deficit in goods trading narrowed from 58.3 billion pounds in 2014 to 45.7 billion pounds in 2015 (Sonnet, Olsen and Manfredi 2014). The public finances remain a big challenge with the debt ratio close to 100% of GDP. There is no restriction on the right for a strike as the French employees treat it to be an acceptable action, which is a potential danger to the foreign banks.

4. Environmental factors

a) PESTEL

Political

The government of France has a high centralization, and it makes a strong administrative control. The debt of government has reached 90% of its GDP.

Economic

After the world recession, all the European countries were going to bankrupt. The government of France makes a continuation to impose heavy taxes on its people. They spend that income on the state expenses like development projects in majority that in 2010, the expenditure on public reached 56% of GDP (Sonnet, Olsen and Manfredi 2014). The tax rate is 40% more in the business community, which is compared to the world’s rest. Due to this high taxation, France had a high unemployment level because the disparity identified put the companies out of competition against their competitors from foreign. The country has an enormous potential for doing great in banking industries. Bonatelli Wine can enter the French market, as there is an added preference for quality products. French people love wine and the quality of Bonatelli can ensure that they can enter the French market without any hesitation.

Social

The most pressing issue that the French people face is of income and social class disparity. This gives the rise to the crime rates where the youth started getting involved in the criminal activities destroying their potential future (Cull, Demirguc-Kunt and Morduch 2013). Most of the time workers are in strike hampering productivity. The racial violence is witnessed in the recent past.

Technological

In the year 1995, total developmental expenditures and research of France was amounted to a huge sum of 190 billion Francs that is 25% of the GDP. In 1998, high-tech exports were $54.2 billion. It was accounted for manufactured exports’ 23 per cent.

Environmental

France is an industrial economy that faces the water pollution issue. The environment ministry does the implementation of the related laws (Nguyen, Mai and Nguyen 2014). It’s eleventh nation in highest level of industrial carbon dioxide emission in the world as per the reports in 1992.

Legal

The main law enforcing body of France is the police. The French police take care of the control of local crime. If a person is arrested there, it is advisable for asking for the attorney and giving no statement without his supervision.

The French geopolitical strategy is influenced by the country’s geography. The geopolitical situation can be characterized by safety (Lin, Wu and Nga 2013). Its former enemies have become allies. Since last hundred years, there were no such threats; it set the condition for France to have massive resistance from its population. Nationalism and socialism are deeply rooted in the society of France.

b) Technical and e-commerce factors for the country identified

As the country has a large area, the native people’s attitude is quite varying towards the foreigners. They are not tolerant of them (Martin & Chaney, 2012). The country’s distinguished individuality is the important characteristic of culture that is encapsulated by French passion for freedom of opinion and uniqueness, both in the business and society. The import of Australian Wine can enhance their reputation as the vendor of premium class wines. The combination of French etiquettes with Australian flavor and quality can add the persona of the wine industry. E-commerce business has exploded to an unusual extent in recent years. Bonatelli should invest in electronic systems to send bulk orders to France.

c) Impact of these factors on business

The culture of France has a good level of influence in its business. The nation possesses a low tolerance for uncertainty and ambiguity. As the French have the mental set up to take risks, they welcome the people who have the plan to establish a business there (Rothlin & McCann, 2016). It is quite essential to know the country’s culture if any company wishes to enter the business environment of France.

d) Difficulty and barriers for entering market

There is a high threat from terrorism in France, which can hamper the business (Davoine and Ravasi 2013). Due to the ongoing threats by the ISIS militants, the government has given warning to the people to be extra vigilant and has made reinforcement in its overseas and domestic measures.

5. Risks

a) Political, Financial stability, and corruption risks for the country identified

France’s potential danger and risks

The French economy has recovered gradually after contending with relatively little growth in the recent years. The economic activity was not able to decrease the unemployment that has risen steadily and is currently above 10%. France's deficit in goods trading narrowed from 58.3 billion pounds in 2014 to 45.7 billion pounds in 2015 (Sonnet, Olsen and Manfredi 2014). The public finances remain a big challenge with the debt ratio close to 100% of GDP. There is no restriction on the right for a strike as the French employees treat it to be an acceptable action, which is a potential danger to the foreign banks. Moreover, there is a high threat from terrorism in France, which can hamper the business (Davoine and Ravasi 2013). Due to the ongoing threats by the ISIS militants, the government has given warning to the people to be extra vigilant and has made reinforcement in its overseas and domestic measures.

b) Legal and regulatory requirements

i) Role of OCED

The indulgence always stands for the society that makes the allowance, which is relatively free gratification of basic and natural human drives that are related to the enjoyment of life like Australia (Dabbous & Diot, 2013). The restraint says that society makes the suppression of gratification needs and makes regulation of it using strict norms of society like France. The mission of Organization for Economic Co-operation and Development is to make sure that the country is secured in importing and exporting.

ii) Key provisions of relevant legislations and codes of practice

The country is located in the heart of European Union and is financially more stable. Such stability helps to build a branch of a bank having headquarters in overseas. Being a nation of European Union, France can provide domestic customers as well as customers from the other members of EU to the Commonwealth Bank of Australia. Though the country prefers talking in their native language during business communication that is French, still it cannot be a significant barrier to an expansion of business as French are much more cooperative. However, France is currently going through militant attacks but still it has the capability of controlling terror by its superior legal system. The per capita income of France is higher which leads to more investment by the customer to the branch of a foreign bank leading to more opportunities for doing business in various dimensions.

c) Analysis and rating of the acceptability of risks, regulatory requirements and trade barriers

France is a large country that has full of opportunities for the purpose of business expansion. The country has a potential of excellent growth. The Organization for Economic Co-operation and Development says that France’s economy will have a steady growth rate of 1.7% at the end of 2016 (Cook 2013). The European Commission has made a grant of two-year period of grace, which is non-negotiable so that France can manage to bring its deficit within 3 percent of its GDP. The economic experts have given the prediction that like other industries, there are full chances for the automobile industry to grow.

d) Impact of risk factors in international business cycle and economic conditions

The French citizens have a strong taste for products and services. France has its fragrance brands and wines, which have worldwide fame well accredited in the nation as well as all over the world (Cook 2013). If Bonatelli can grab the market with proper positioning of their wines meeting their customers’ demands, then there will be a high chance for them to stay competitive with their rivals. Apart from that, several companies are available to make joint ventures with the company regarding manufacturing and assembly. Sufficient areas are available in France for building factories and offices for making premium boutique wines.

6. Opportunities

a) Identify current market trends including key industry areas, significant trade partnerships and consumer characteristics

France’s potential opportunities

As it is the fifth largest economy in the world, located in the centre of the European Union, there is intense competition for the share of market in all the business sectors of France (Reinhart and Rogoff 2013). Being in the position at the centre of the largest market in the world, France makes an offering of an environment, which is favourable to the potential investors. It is considered to have a well-developed economy and has highest Human Development Index in the world (Chong 2014). The economy is based on both private sector and national economy and has made a tremendous opportunity for the new business set up for the externals.

b) Identify new and emerging business and electronic commerce markets, and assess opportunities to enter and influence markets

The French government has also imposed a tax rate, which is quite reasonable to make a good profit margin from the sales of automobiles (Anderson 2015). As France is the member of European Union, they receive a healthy economic support from the other nations for industrial development. E-commerce markets have various opportunities currently in France. They are enjoying mass popularity as well. Wines can now order through websites. If Bonatelli can introduce websites and can set up inventories in those countries, they have huge potential in French market. The per capita income of France is higher which leads to more investment by the customer to the branch of a foreign bank leading to more opportunities for doing business in various dimensions.

Reference

Anderson, K., 2015. Wine Economics Research Centre Wine Policy Brief No. 11.

Bekker, M.Z., Mierczynska-Vasilev, A., Smith, P.A. and Wilkes, E.N., 2016. The effects of pH and copper on the formation of volatile sulfur compounds in Chardonnay and Shiraz wines post-bottling. Food chemistry, 207, pp.148-156.

Chong, S., 2014. Business process management for SMEs: an exploratory study of implementation factors for the Australian wine industry. Journal of Information Systems and Small Business, 1(1-2), pp.41-58.

Cook, J.W., 2013. The Light. iUniverse.

Freud, S., 2015. The interpretation of dreams. Courier Dover Publications.

Hughes, D. and Wang, X., 2014. Expanding export markets keep moving to the east.

Kristensen, L.J., Taylor, M.P. and Evans, A.J., 2016. Tracing changes in atmospheric sources of lead contamination using lead isotopic compositions in Australian red wine. Chemosphere, 154, pp.40-47.

Martin, A.E., Watling, R.J. and Lee, G.S., 2012. The multi-element determination and regional discrimination of Australian wines. Food chemistry, 133(3), pp.1081-1089.

Thompson, J., 2013. Wine facing tough five-year outlook.

Thompson, N., 2016. Australian wine exports: Outlook to 2020-21.Agricultural Commodities, 6(1), p.96.

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