Achieving global competitiveness

With some 33% of South Africa's wine production being exported to 109 countries (yes, that's correct - 109!) the question of achieving global competitiveness is an issue that affects producers, suppliers and, marketers alike.

According to former Sony chairman, Akio Morita, "All you need is the best product in the world, the most efficient production in the world and global marketing. The rest takes care of itself!"

Global competitiveness starts with a passion to make world-class products. It builds on these strengths with a sharp customer focus and an understanding of the emotional needs of the consumer.  

What are some of the strategies the South African wine industry can bring into play, to achieve maximum global competitiveness?

1. Have a powerful positioning statement - It's the story you want to plant in people's hearts and minds about your product and why it's better. A good example is New Zealand's wine positioning statement: "The riches of a clean green land."

2. Create a 'global culture'- to maximise global competitiveness, companies need the advantages of global scale along with wide-ranging perspectives and cross-cultural creativity. Company leaders need a global mindset in order to successfully compete in a global setting.

3. Invest in knowledge - although Australia supplies less than 2% of the world's wine, it contributes 20% of the global flow of research papers on viticulture and oenology. As one industry expert has observed: "The development and implementation of technology is the real secret of Australia's success".

4. Focus your product range - experience shows that every time the number of variants doubles, costs increase by 20 to 30 per cent.

5. Identify new market opportunities - is there the potential to create a new segment with both higher prices and higher volume?

Global Packaging Strategies
  
Recent research on the role of packing in the marketing mix suggest that packaging is the third most influential factor, after price and promotions, in the consumers decision to buy a product. Packaging is often the most cost-effective type of advertising, particularly when communicating brand values and brand image.

Packaging innovation is a great source of brand differentiation. Speed to market, total cost management, and supply chain partnerships will be the critical factors to meet the future needs of leading wine and beverage companies.

Surviving the global challenge

1. Avoid suppliers using out-dated business models - efficient manufacturers are geared for just in time and mass customisation. Delivery times of  4 - 8 weeks for any packaging product is totally unacceptable. Would YOUR customers be prepared to wait that long?

2. Insist on world-class products from your suppliers - world-class wines deserve world-class packaging.

3. Build relationships with your suppliers - learn their business. In any industry there are wide gaps between good performers and poor performers. Expect your suppliers to invest in their people, manage their production effectively, and invest in technology.

4. Get suppliers involved early in the new product design process - companies that do so report greater gains than those, which involve suppliers only after design concepts have been developed.

Achieving global competitiveness is not a destination; it is a journey. To begin this journey requires long-term vision, strong leadership, highly efficient management and, above all, commitment. In an environment in which it is increasingly difficult to obtain the resources for going it alone, collaboration, value-added partnerships and strategic alliances are often the only difference between fighting for survival and success.

Mike Carter can be contacted at:
082 706 5599
mike@veritasconsulting.co.za