QUESTION
Assignment
Formatting:
- Times New Roman 12 point
- 1 inch (2.54cm) Margins
- Reference style APA 6th
- Do not indent paragraphs
Length:
- Max 500 words ( for answering all questions, not for each question)
- Just number your answers (1, 2, and 3) and answer the questions in order --> this will lower your similarity %
1. Justify the reasons why Cheateau Margaux should extend the product line.
2. Justify the reasons why Cheateau Margaux should not extend the product line.
3. What advantages does Cheateau Margaux have in the current distribution structure?
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| Subject | Business | Pages | 3 | Style | APA |
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Answer
Château Margaux
Chateau Margaux produces the most prestigious wines in France and is located in the Bordeaux region. On average, Chateau Margaux produces 150,000 to 200,000 bottles annually (Jeff, 2020). This paper elaborates on why Chateau Margaux should extend the product line, why it should not extend its product line and the advantages it has on the current distribution structure.
1.
Chateau Margaux should extend the product line because by doing so, it will make it more competitive and offer an advantage over other organizations. The characteristics and situations of Chateau Margaux will be defined making it more efficient in comparison with its competitors. As the competition among firms aid in identifying the lucrativeness of the industry, by extending its product line, Chateau Margaux will have more bargaining power to maintain its strength within the industry.
2.
Chateau Margaux should not extend the product line because of the unforeseen barriers that will arise from doing so. For instance, companies with similar interests or companies seeking to venture into the market might create barriers to prevent the new entrants from landing in the market (Ofek & Vogt, 2018). These barriers could span from industrial to legal barriers. The cost that comes along with extending the product line in terms of raw material access, cultural barriers and technical standards may as well be a major limiting factor to the product extension. Political forces and economic forces may also affect product extension. The political factors include employment regulations, tax policies, political stability and trade restrictions which may affect Chateau Margaux product extension. Economic factors that may affect Chateau Margaux include inflation, working hours, interest rates and exchange rates.
3.
Château Margaux distribution system is still traditional as it is still handled by merchants who are charged with the wine distribution. Other than being tasked to distribute the wine, the merchants also negotiate the prices, promote and position the brand and maintain relations with the customers. One of the major advantages of this system is that it can create a scarcity in the market which results in better prices (Deighton et al., 2007). With the impression that the product is scarce, customers appreciate it more.
In conclusion, Château Margaux has the potential to further excel in the high-end luxury brand and develop successful brands for the market. Even with the risk associated with product extension, excising caution and doing thorough research before product extension could maximize profits dramatically.
References
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Deighton, J., Pitt, L. F., Dessain, V., Beyersdorfer, D., & Sjöman, A. (2007). Marketing Chateau Margaux. For the exclusive use of J. Liu, 2021. Harvard business school case study, 507033. Jeff, L. (2020). Learn all about Chateau Margaux in the Complete Guide. Retrieved March 09, 2021, from https://www.thewinecellarinsider.com/bordeaux-wine-producer-profiles/bordeaux/margaux/margaux/ Ofek, E., & Vogt, E. E. (2018). Château Margaux: Launching the Third Wine (Abridged).
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