Essay on Challenges Ahead for Kingston Family Vineyards in Chilean Wine Industry

The family that owns Kingston Family Vineyards has myriad problems which will influence the course of the management and profitability of the venture in the future. The main problem, however, is how to move forward in the current wines industry, which is not only concentrated but also is facing a tough market situation. At the moment, the Chilean wine industry is facing stiff competition within itself and other external brands and players in the market. Kingston Family Vineyards, being one of the players in the industry, is at a great disadvantage for a variety of reasons. For one, it is one of the smaller grape growers in the region and therefore, cannot compete favorably with larger farms. Secondly, it is trying to venture into a niche market; a move that comes with a set of unique problems. In this regard, the management team has to address the problem of what the family venture should do next to remain profitable for the next generations.

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Kingston Family Vineyards is a family enterprise before anything else, and therefore, the values and mission of the venture are in support of this assertion. As such, the venture has to gain support from all the relevant stakeholders before the formulation of an action plan. In this regard, the venture would like to enter the niche market of premium and high-end wines, and to do this; the management requires input from the significant family members. In this regard, the management needs to adopt an all competitive strategy which will entail a distinctive emphasis on cost and differentiation (Griffin, 2015). The reason for this is that the business venture needs to break into a niche market that has intense competition and therefore, the management requires a strategy that is competitive in changing the business practices to match the needs of the industry.

Kingston Family Vineyards is a model family business that has its practices ingrained in family values. As such, the strategy that it requires for it to compete in the industry that is not only competitive but also fragile is to adopt a competitive strategy (Hill, Jones & Schilling, 2014). The venture has some strengths, which include land ownership, experience in the art of grape growing and being in a country that is already famous for grape growing. As such, the only missing piece in this puzzle is to formulate the techniques that will realize the dream of the management. The strategy will work as it encompasses the relevant aspects of the business, which include, the mission and focus of the management.

Kingston Family Vineyards, as the name suggests, is a family business that has been in the clan for more than three generations. As such, all the decisions made by the management have to be conscious of this fact. Being a family business, the values that the company would esteem would be those of how it treats its employees, the wages paid to employees, the conduct of business with other relevant stakeholders and business partners and how it does its financial reporting. In this regard, the competitive strategy that the company should adopt may not be consistent with how the family business operates. For one, the strategy may call for stringent operations which aim at making profits, and this may mean paying low wages to employees. Secondly, the issues of financial reporting and acquisition of assets may force the management to follow scrupulous routes which may be in contravention of the family ethics (Presenza, Messeni Petruzzelli & Natalicchio, 2019). As such, the strategy may lead to friction within the business venture.

References

Griffin, R. (2015). Fundamentals of Management. Cengage Learning.

Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic Management: Theory: An Integrated Approach. Cengage Learning.

Presenza, A., Messeni Petruzzelli, A., & Natalicchio, A. (2019). Business Model Innovation for Sustainability. Highlights from the Tourism and Hospitality Industry. Sustainability, 11(1), 212. doi:10.3390/su11010212