Sandusky Winery Case

In: Business and Management

Submitted By TDiller419
Words 741
Pages 3
Todd Diller
Dr. Min
MGMT 4420
February 23, 2015
Sandusky Winery Case
Problem Analysis
At Sandusky Winery, there seems to be several issues going on within the company’s operations, resulting in a huge inventory mess. The first issue I have noticed is the eagerness of Sandusky Winery’s marketing department. The marketing department wanted to expand product lines and aggressively promote its new products, without taking storage and warehousing into consideration. This high level of production has resulted into a massive surplus of product that has the storage room packed from the floor to the ceiling. The main issue is the poor inventory management. The stock room is filled from the floor to the ceiling with a variety of old wine products and promotional items, including ones from 1996 Summer Olympics. This problem is causing the production manager to take time out to locate the inventory manager, so they can find storage space for these leftover products from previous promotional runs. Some of these items had temperature requirements that were not met when they were left outside a facility in a boxcar, resulting in a loss of product. They often reduce their inventory and storage space by purging their less popular products, resulting in a loss. Sandusky managers their inventory with an “earn and turn” process that does not identify their most popular products or control the excessive supply of unpopular products. Sandusky Winery is limited on additional storage/warehousing also. It does not seem sensible for the company to build an additional warehouse, and the nearest temperature controlled warehouses are located in Columbus, OH and Louisville, KY. The last issue is with the purchasing department. The purchasing department plays a key role in determining total inventory costs. The purchasing department is also responsible for establishing an inventory…...

Similar Documents

Mondavi Wineries - Strategy

...I. Summary Mondavi Wineries intends to grow the company’s wine market share organically, without benefit of established wine acquisitions or joint ventures. An analysis of the industry and competition should help establish future strategic course. II.a. Barriers to Entry The industry contains excessive barriers to enter the wine production market. First, the wine industry requires quite an extensive amount of financial resources. In New World and European markets, costs of premium wine land range from $100,000 to $250,000 per acre in addition to development and maintenance of a vineyard. Premium grapes are also costly, and the wines have a maturation phase that must be passed before a rival firm can enter. In addition, the wine-making process became technologically dependant, utilizing new technology to combat weather conditions, pest control, and wine processing. A winery is not simplistic to start, because it is capital intensive, and market entry can take many years due to initial production time for vineyards and wine. A good knowledge base is also required in order to make wine and understand the complexities of the industry. II.b. Supplier Power Wine industry supplies consist of bottles, packaging, corks, machinery and equipment, land treatment and grapes. Prices for these raw materials are relatively stable and are set as a result of considerable competition. This situation obviously creates less bargaining power for suppliers. The move to backward...

Words: 1093 - Pages: 5

Abbey Winery

...Arkansas State University | Freemark Abbey Winery | Team 1 | | Assignment | 11/28/2012 | | Case Summary Freemark Abbey Winery should make a decision whether to harvest or not, taking into consideration the possibility of rain. Rain may damage the crop but delaying the harvest would be risky too. Keeping in mind rain could be beneficial and will increase the value of the resulting wine. This decision is complicated by the fact that ripe Riesling grapes can be converted to wine in two ways, resulting in two different types of wine. Factors that should be taken into consideration Probability of rain, mold formation, acidity, sugar level, wine price, and reputation. Mr. Jaeger’s possible choices: Harvest now or later. Solution: The payoffs are calculated based on 1000 cases of wine. 1. There are two alternatives: * Waiting (W) for the storm to come. * Harvest (H) now. * If he waited, the storm may or may not hit. * If the storm hits, the mold may or may not form, which greatly affect the revenue. * If the storm hits and no mold form, the sugar level which determines the quality of the wine is uncertain. The quality of wine produced affects the company’s reputation. * If storm hits and mold do not form: Sell the grapes in bulk (B), or make the thin (light) wine and sell it (T). * The best decision: Where the expected value (EV) maximizes current returns. * The blue values represent selling the harvest in bulk......

Words: 530 - Pages: 3

Winery

...000-200,000 case strong at the turn of the millennium was growing at the rate of 25-30% for the previous 5 years when the downfall occurred in 2008 after it had reached a peak of 1.5 million cases including about 250,000 cases of imported wines. 2008-2011 saw a slide in the domestic wine production and consumption. It flirted with the peak in 2011-12 (Apr-Mar) and a growth of 20-25% is expected to continue during the next 5 years.Indian market at a glanceA population of 1.13 billion with over half under 35 years, offers a huge opportunity for wine producers.  About 300 million belong to the middle class with 30 million as potential wine drinkers; currently there are less than 2 million. India has been traditionally a liquor guzzling country with over 400 million cases consumed annually. Even the relatively new beverage beer has created 160 million-case market because of lower prices and the penchant of youth. But as the younger population achieves adulthood, it is expected to also add wine as a choice.Indian Constitution discourages consumption of alcohol and authorizes States to formulate their own policies of production, distribution, procedures and pricing, making it complicated for the users, marketers and producers.State of Maharashtra (Mumbai is the Capital) announced in 2001 a progressive policy for wine production with special incentives and single-window clearances to help farmers as they were already growing eating grapes,. This resulted in a spate of new wineries;......

Words: 2353 - Pages: 10

Maccloud Winery Case Study

...MacCloud Winery Case Study Due 11/17/13 1. Should the leased building be accounted for as an asset? No, the lease should be considered an operating lease. The building is the asset. The expense should be accrued on the building. The length of the lease should be less than 75% of the life of the asset leased. The lease is a ten year lease and the building has a 30-year economic life. Therefore this is an operating lease. The rental payments should be expensed as they are paid and offset by the cash used to make them. Should the agreement to pay lease rentals be recorded as a liability? No liabilities should be recorded because the future payments on the lease should be noted in the footnotes of the company’s financial statements. 2. Record the journal entries to account for the bank loan for all 3 years. Assume the loan was made at the beginning of the year and repaid at the end of year. Assume all interest payments are made on an annual basis. The $10,000 per year payment is to reduce the loan’s principal. Loan Issuance: DR Cash $180,000 CR Notes Payable $180,000 Year One Loan Repayment: DR Notes Payable $10,000 CR Cash $10,000 Year Two Loan Repayment: DR Notes Payable $10,000 CR Cash $10,000 Year Three Loan Repayment: DR Notes Payable $160,000 CR Cash $160,000 To record the interest payments annually (10% interest rate on $180,000 principal): DR Interest Payable $18,000 CR Cash $18,000 3. Applying the principals of accrual accounting,......

Words: 840 - Pages: 4

Maccloud Winery

...MacCloud Winery 1). (A) Ok so the first question is asking about whether the building being leased on the 5 acres piece of piece of property. And doing some further research I found that it can be treated one of two ways. Capital Lease: which is a lease treated as an acquisition of the assets financed by a loan OR Operating Lease: which is a lease treated as a rental agreement so there for would not be an asset. BUT a capital lease has to meet one of three criteria and in this case it does. The criteria it meets States: The present value of the minimum lease payments is equal to or greater than 90% of the fair market value of leased property. And if you were to calculate the lease payments out (10,000*5= 50,000) it would equal $50,000 which far exceeds the value of the building being at only $32,000. (B) yes all the payments made towards the lease should be recorded as an expense 2). BANK LOAN: $180,000 3 years $10,000 annual payment (until 3rd when you pay lump sum) 10% Interest rate Journal entry on the day of the loan: Cash 180,000 Notes payable 180,000 Journal entries for the next three annual payments. Note Payable 10,000 Interest Expense 1,000 Cash 11,000 Journal entry on the lump sum pays out at the end of the loan contract Note Payable 150,000 Interest Expense 15,000 Cash 165,000 3). Land: Mike should treat the land as acquiring an asset transaction would be like...

Words: 684 - Pages: 3

Benziger Family Winery Case Analysis

...Benziger Family Winery Case Analysis Misty McCallie Quality Management March 11, 2013 Benziger Family Winery and its management team continue to make extensive leaps in the area of environmental conservation. In addition to the progress being made on Benziger’s environmental management system (EMS), the winery has also been chosen by Cal/EPA as a pilot winery to develop a template that will be consistent with ISO 14001(Silverman, Lanphar, 2003, p. 1). Matt Atkinson, Ranch Manager, and Chris Benziger, partner and National Sales Manager, must decide whether to continue development of an EMS slowly or to forcefully pursue ISO 14001 certification. To be able to answer this question, I must assess and evaluate the information provided in this case. I will start with an assessment of the EMS Gap Analysis which is a checklist consistent with ISO 14001 requirements. This checklist is in the form of questions ask such things as what is their policy, and provide documentation such as records, actions, and management review. At first glance it seems as though Benziger Family Winery leaves a lot to be desired in the way of completing these goals, but upon further inspection it is apparent that the winery has taken great steps towards completion of these goals and only need to follow through on most of the activities already begun. For instance, the communication plan, EMS documentation and writing of the SOPs have all begun but have aspects that are still in development. I......

Words: 856 - Pages: 4

The Valley Winery

...Case Analysis – The Valley Winery The Valley Winery is the largest domestic producer of wine in the United States and one this nation’s largest privately held companies. Their recently hired sales manager of the San Francisco region, Pat Waller, has determined that the number one problem in the region, despite favorable sales results, was turnover which is nearly 100% a year with the average sales rep being with the San Francisco region winery for only 7 months before leaving or being terminated. Pat begun to analyze the effects of the turnover the company is experiencing, which consisted of first considering the costs of training and recruiting which was close to $33,000 per representative. Secondly, he believed that decreasing turnover would increase sales due to better customer rapport. Pat then decided to travel with sales representatives to better understand the day to day of the job to get a better sense of what may be happening while out in the field that may be adding to the high turnover. There seems to be many problems with the culture of this company, but not a single one with sales and profits. They’re consistently making high numbers, but the number one problem they seem to have at The Valley Winery is the high turnover problem. As mentioned above, the high turnover rate nears 100% on the year with the average sales rep staying a nearly 7 months. The sales manager of the company oversees two area managers, who collectively oversee 11 district managers, who......

Words: 1434 - Pages: 6

Delamere Winery

...Delamere Winery Problem Statement Richard Richardson wants to improve the quality of his wine by preventing oxidation, deepen the red color, and determining the best mix to include in the crush. However, he uncertain which initiative will be the most impactful, will be most accepted by his customers, and be the most cost effective. Due to harvest, Richard Richardson only has a few days to decide. Objectives Richard Richardson’s goals are to: • Continue to grow his business and increase profit. • Prevent oxidation of the wine. • Deepen the color of his red wine. • Determine the best mix of whole bunches, stalks, and destemmed grapes in the wine’s crush. Analysis Richard Richardson owns a 21.3 acre winery in Tasmania. 8 acres of the winery are used to produce wine. He has a PhD in agricultural chemistry and has used to his education and passion for winemaking to attempt to continually improve his wine through experiment and express the personality of the winery as well as his own. However there are many risks and conflicts involved with his current business practices. The Tasmania wine region is growing rapidly and experiencing many changes. The region is becoming very competitive and focused on quality, price, and consistency. Advertising is currently limited but will likely change as a more competitive environment emerges. There are many steps to manufacturing wine such as harvesting, crushing, fermentation, and maturing. Currently......

Words: 1497 - Pages: 6

Benziger Winery

...Crafting and Executing Strategy: Concepts and Cases, 14th Edition Benziger Family Winery Case © The McGraw−Hill Companies, 2004 1 case Benziger Family Winery Murray Silverman San Francisco State University 36 Tom Lanphar California Department of Toxic Substances Control had been the primary participants developing the system, the rest of the organization would have to become involved and staff training would be required. In light of the financial investments and time that would be required from management and employees, Matt and Chris had to decide whether to aggressively pursue ISO 14001 certification. The alternative was to continue to develop an EMS as time and resources permitted, leaving open the possibility of eventually pursuing ISO 14001 certification. M att Atkinson, ranch manager at Benziger Family Winery (BFW), was overseeing the development of the winery’s environmental management system (EMS). Matt was working with Chris Benziger, partner and national sales manager, to ensure that development of the EMS was consistent with BFW’s operational and strategic direction. It was February 2003 and Matt and Chris had already invested countless hours in the EMS, which was being developed with assistance from the California Environmental Protection Agency (Cal/EPA). Through its EMS winery pilot project, Cal/EPA hoped to design an EMS template that eventually could be made available to other wineries. Furthermore, Cal/EPA was attempting to......

Words: 8320 - Pages: 34

Freemark Abbey Winery Case

...Freemark Abbey Winery Case The Freemark Abbey Winery must decide whether to harvest their grape crop before or after an incoming storm. If the storm is light there is a chance of the grapes developing a mold, which is beneficial to the flavor and increases the wine’s value. There is also a possibility that the grapes will not become botrytised and will simply absorb water which will reduce the wine value. There are a number of options available to the winery in this situation. The grapes may be harvested immediately, resulting in a reduced revenue. This option is low risk, but also has low return as the grapes will reach a market value of $2.85 per case. If harvested and sold in bulk the grapes will be values at only $1.00 per case. If 12,000 cases are produced the total revenue will be $34,200 maximum and $12,000 minimum. The advantages of this are that the entire grape crop is not going to be lost (low risk), that there will be a guarantee of some profit, and that production can begin earlier. On the other hand there is a higher likelihood of a low return, particularly on the grapes sold in bulk. If the grapes are left on the vine and a storm does not come they will only ripen more. This option could lead to equal or greater profits than those found by harvesting immediately. The grapes left on the vine will have the potential to develop to bring in anywhere from $30000 to $46000. The disadvantages of this option would be the potential that the grapes’ sugar will not......

Words: 635 - Pages: 3

Mondavi's Winery Case Analysis

...thousands of years. It has always been a source of profit with undeniably high demand. The case study by Michael Roberto examines the history of wine and winemaking, and describes the very process of growing the grapes, maintaining the vineyard, fermenting and aging the wine, bottling, packaging, marketing and distribution. The author of the case study thoroughly describes the basics of winemaking, traces the history of wine to the modern day, analyzes the current wine market and competition, presents relevant data, and analyzes the implications of wine market upon Robert Mondavi and his company. The advantages of investing into the winemaking business are quite obvious. Wine industry never slowed down exhibiting constant growth of 1-2% over the years. According to Roberto, there are over 1 million wine producers worldwide with various representation in different parts of the world that share yearly profits of $130 to $180 billion in retail sales (p.1). Robert Mondavi’s winery, described in the case, proved to be a profitable business that showed a substantial growth rate of 28% since fiscal year 1994 and market value of $600 million (p.1). Wine industry is a very profitable business that is an excellent target for investment. I would invest into a reputable and growing winemaking company with no reservations. Robert Mondavi has a significant advantage over the smaller independent wineries due to the name recognition after the efforts to advertise the company and its......

Words: 986 - Pages: 4

Freemark Winery

...unless you strongly dislike risk, you should wait to harvest. Your expected gain from waiting is at least 4% (worst-case scenario). If the very best-case scenario in which the node (labeled as ①) is worth $28,200 (see Technical Appendix for underlying calculations), your expected gain would be at least 18%. Because your winery is a partnership rather than a stock firm, I assume that risk is an issue for you. On the other hand, Riesling represents only 4% of your ∗ Otherwise, you not find it profitable to produce a $2.50 bottle of wine should the storm not occur and the acidity drops below 0.7%. † I provide details in the attached technical appendix. Copyright c 2004 Benjamin E. Hermalin. All rights reserved. mba 201a Lecture 2 — Fall 2004 business, which suggests that this particular risk would not be very significant to you. Only a full evaluation of your attitudes toward risk—which I could conduct for an additional fee—would reveal whether this risk would be acceptable. Finally, there is the accuracy of the numbers you gave me. I assume I can trust the prices you gave me. The analysis is largely independent of the storm probabilities. The analysis is, however, sensitive to the probability you gave me for the mold forming. If this probability were actually 34.8% or lower, then the expected-value maximizing decision would be to harvest now in the worse-case scenario. Technical Appendix Basic Analysis The decision tree shown in Figure 1 is read left to right. That......

Words: 1529 - Pages: 7

Valley Winery

...Valley Winery Case Study Introduction The San Francisco division of Valley Wine has recently hired a new sales manager named Paul Waller. The company has had consistently good sales despite a turnover of 100% of the sales force in the San Francisco area. Waller is tasked with better planning and organization of the sales force activities of Valley Winery and the operations in the region. Philosophy and Strategy The Valley Winery was founded in 1933 and has grown to the largest domestic producer of wine in the United States. They produce multiple product lines that include both low-price, consistent-quality wines as well as lower quality wines and wine coolers. The Valley Winery has had a difficult time retaining its sales force. Even though they have had short-term growth in sales, they are not able to sustain the growth. The Valley Winery has been recognized as the best managed and most innovative in the market. This is related to two factors: * Producing low-priced wine with consistent quality * Push strategy that is used by the sales force Distribution System Valley Wine has a wide, nationwide distribution system which is primarily located in metropolitan areas. The company owns approximately 50% of these distributors that are mainly larger and more profitable accounts. The company typically does not target smaller accounts, but one of their products do cater to this segment of the market also. Sales representatives’ call on......

Words: 1098 - Pages: 5

Sandusky Scandal

...Josh Bullock RHW 102 Dr. Tenger 23 October 2014 Sandusky Scandal Jerry Sandusky was once seen in the eyes of many as a well-respected individual, and an astounding assistant coach for the Penn State University football team. Once the scandal arose of him sexually abusing children, eventually leading to his conviction of sexual harassment crimes, his whole reputation and all that he had worked for his entire coaching career was lost. No one could really grasp what had occurred at first, especially those who worked with him, for so many years he was seen as such a remarkable coach, person, and as a role model for young people. Tavris and Aronson state in their book, Mistakes Were Made But Not By Me, “Because most people have a reasonably positive self-concept, believing themselves to be competent, moral, and smart, their efforts at reducing dissonance will be designed to preserve their positive self-images” (29). With Sandusky being put in a light as such an overall good person it was hard for individuals to think that he could do something so appalling. Leon Festinger, a social psychologist, is referenced by Tavris and Aronson in the opening chapter of this book saying, “The engine that drives self-justification, the energy that produces the need to justify our actions and decisions -especially the wrong ones- is an unpleasant feeling that Festinger called cognitive dissonance” (13). “Cognitive dissonance is a state of tension that occurs whenever a person holds two......

Words: 1127 - Pages: 5

Quint Winery

...Quint winery | Exploring possibilities to enter the Japanese market | | This study aims to give Quint winery a solid advice wether to enter the Japanese market or to look for other ways to expand their market. | | Roderick d’Hont 48632 | 1-1-2011 | | 1 Contents 1 Case discription 3 2 Analysis 3 Uncovering the potential of the Japanese market 3 How to locate potential Japanese purchasers 4 Should Quint winery visit japan or should japan visit quint winery 4 Entering Japan solo or together with other companies 5 Marketing research 5 3 Conclusion 5 1 Case discription Quint winery is a wine producer located at the Mosel River Valley in Germany. As the home market is becoming increasingly saturated and the competition is increasing, Quint Winery is looking for other markets to expand their sales and distribution. The wines produced at Quint Winery are high quality, and honor the traditions in wine making. Once at a ‘wine tasting party’, one of Quint Winery’s German customers brought a Japanese visitor along. She believed that the wines would prove salable in Japan, if marketed properly. 2 Analysis Uncovering the potential of the Japanese market Wine made out of grapes hasn’t been one of the favorite alcoholic beverages in Japan. Rice wine and plum wine were always the way to go. As these wines are made in Japan, they contribute to the Japanese sense of culture and traditions. Only since 1969 when Pieroth, which is an established wine brand......

Words: 1499 - Pages: 6