Golan Heights Wines wanted to enter the Chinese market in 2012, as the country had shown immense growth in the wine industry. What is the best entry mode for the company into China, and why?
Ilan Alon, Jennifer Dugosh, Meredith Lohwasser
Harvard Business Review (W14141-PDF-ENG)
May 05, 2014
Case questions answered:
- In your eyes, what is the international business philosophy of Golan Heights Wines, and why?
- Conduct a CAGE analysis of China in comparison to Israel.
- What is the best entry mode for the company into China, and why?
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Israeli Wines in China: Reaching for New Heights Case Answers
1) In your eyes, what is the international business philosophy of the company Golan Heights Wines, and why?
This assignment will be based on Golan Heights Wines, which is an Israeli company that offers wine to the Chinese market. Our term paper will address the period when the case study was conducted, from 2009 to 2015 ( Alon, I., Jaffe, E., Christiane, P., and Vianelli, D., 2020). The first part will discuss our perspectives on the company’s business philosophy by discussing the global approach chosen by Golan.
Furthermore, we will discuss the macroeconomic conditions for the Israeli company through the use of different frameworks such as SWOT and PEST. There are differences between the countries China and Israel, which means the third part will include a CAGE analysis to make a better understanding of the significant differences.
Moreover, we will present strengths and weaknesses in the Chinese beverage industry, which had an impact on Golan. For the fifth, we will be recommending a specific entry mode that may fit Golan. Finally, at least outline a market plan (4 P’s) for Golan’s attempt at the Chinese market.
According to the information we obtained from the case study, it is mentioned that the Israeli Winery company Golan Heights Wines (Golan) has a strong market share (18%) within its domestic market. Additionally, the company was offering premium wine with the finest barrels used for maturation. The processes of corks, seals, and bottles were imported from manufacturers renowned for Golan’s standards.
Furthermore, based on the strong competitiveness in Israel, Golan chose to expand its operations to the Chinese winery market. The question we need to point out is what kind of global approach was impacting the Israeli winery Golan Heights Wines in its choice of the Chinese market.
A company that wants to become international needs to face the pressures from two different conditions, which are global integration and local responsiveness (Berger, 2022. Personal communication. Lecture 4, p.5).
Based on our understanding of the case information, the pressures were low on both global integration and local responsiveness. Therefore, the international approach seems to be ethnocentric-driven, which means Golan used their existing competencies to explore opportunities within international markets such as China.
In addition, there was no specific reason mentioned in the case study for the choice of China in Golan’s situation. The ethnocentric approach can be linked to the internal life cycle model developed by Vernon (1966) (Berger, R. 2022. Personal communication. Lecture 4, p.7).
Golan Heights Wines was exploiting…
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