Brown_Bother

Brown Brothers Milawa Vineyard is a wine company in Australia and it was set up by John Francis Brown in 1889. In 1933, his son, John Charles Brown, makes it a family business. In the progress, there were challenges, for example, in 1943 drought restricts production to below the sales quota level. However, it seems the family business is strong enough to overcome the barriers. In 1958, third generation John Graham Brown joins the family of winemakers, and since then, is the beginning of an almost continuous succession of good vintages from 1978. Brown Brothers Company has five vineyards and exports to more than 30 countries where include markets of UK, New Zealand and Asia. There is a competitive advantage of the company. Brown Brothers Company has invested not only in export quantity but also in research production and packaging development such as lighter weight glass packaging. Furthermore, Brown Brothers Company has got many wine awards. In 2010, Brown Brother Patricia Pinot, ChardonaryBrot 2005 was rewarded as best sparkling wine. In this essay, there are five parts to analysis whether brown brothers can enter the Chinese market. China is a developing country which lies in the east of Asia. The population of China is more than 1.3 billion, making up a quarter of world population. There is a high power distance and low individualism of Chinese culture. Specially, there are three main soci-culture situations in China where as the Brown Brothers Company’s overseas market. Firstly, Chinese think good interpersonal relationship is crucial. They often present gifts to get closer each other. One author, YUNDI DEN, write a book about how to make use of interpersonal relationship to make success in their career. Because of this social feature, Brown Brothers Company can advertise some parts of productions as perfect gifts in Chinese market. Secondly, different wine cultures exist between AU and China. Chinese core product is Chinese white wine, it owns the lion’s share of wine market. People always regard Chinese white wine as the first choice whatever in the wedding or birthday party. Thirdly, Chinese prefer familiar hereditary business, usually called it ‘Laozihao’. They think it has good brand trust and well brand awarance. Brown Brothers Company is that from John Charles Brown made it a family business in 1933 to today. Trough Hofstede Model, there are some data and comparision between culture of AU and China. At 80 China sits in higher power distance ( just 36 in AU) ,it means inequalities amongst people are acceptable in China. There is no defense against power abuse in China. Moreover, AU has 90 score of individualism, compared to China of only 20 score. In AU, people suppose to look after themselves and their direct family only. However, in China, people prefer joining in the group to doing by themselves. Personal relationship prevail over task and company (Greet Hofstede). From another hand, China is a high long term oriented society. People like to invest in long term project. Real estate is a good example. AU has low long term orientation, they have more confidence and think in probabilistic ways. As China is a strong developing country, this we can see from the GDP chart, from 2000 the growth rate kept increasing to 2008 from 8% by 15%. By some research, now the world’s fastest growing consumption market is Chinese market. In 2009, China was the second-largest economy in the world after the United States of America, which is based on purchasing power parity. Chinese market is often compared to a big cake, and many developed countries are trying to share this cake as soon as possible. Based on the current growing economic, the major wine consumption group are young urban professionals and business people in China, because as the economic growth, especially bigger urban cities, the young professionals focus more on entertainments in spare time, so they often hang out with friends in bars, hotels, and restaurants. As a result, the demand of wine is growing dramatically. Brown Brothers Company’s winemaking technology has some advantages for entering into Chinese market. Firstly, Australia has advanced wine making technology with good quality. The Australia Wine Research Institution has provided world class and relevant science to grape and wine company and actively supported new technologies been adopted and applied. Victoria’s climate and geographic conditions supports diversity of grape types and give good planting conditions. Brown Brothers Company has five vineyards in Victoria including Mystic Park, Healthcote, Banksdale, Whitlands and Milawa. In addition, Brown Brothers Company established research and development group and raise money in innovations and production capacity ,which contributes to the planting of 27 grape varieties and proceeds a wide range of wine styles including whites, reds, sparking, fortified and dessert wines. The establishment of ‘Kindergarten’ has resulted the creating of new wine varieties such as Tarrango, Cienna and Moscato. The new tasty wine will definitely provide Chinese customer a luxury experiment. Brown Brothers Company has a complete supply chain from research and grape planting to production, packaging and sales .The investment in lighter weight glass packaging provides the sustainable environment. Reduces its carbon footprint will satisfy consumer expectations. Innovation in winemaking technology throughout the grape to wine production chain will facilitate Chinese market success. Brown Brothers Company could faces some technology challenges when enter into Chinese markets. China has a wide range of geography and various type of climate. Diverse grape types can be planted. Also, foreign grape seeds are introduced to China. In recent years, china has established an increase number of large research and development center. To improve the winemaking technology, many companies prefer to employ international experts at high cost, which contributes to wine diversity not only limited on traditional white or red wine. These factors become huge challenges for Brown Brothers Company to compete with Chinese local wine. In conclusion, To make brown brothers company become more competitive, continuous research new taste wine, advanced equipment to get high production efficiency, communicated with international winemaking sector is vital and necessary. The national standard of the People’s Republic of China for wine (GB/T 15037- 2006) is defined in accordance with a wine law in China, which regulates some standards in wine industry, like terms, categories, technological, requirements, inspection rules, labels, packages, shipments and storage of wine. With this standard, it is required that Alcohol degree (20℃) of wine should be more than or equal to 7%. According to a research, most of the wine produced by Brown Brother is up to the Chinese standard. Currently, most wine companies enter China’s domestic market via a wine agent, which certainly has their own advantages in terms of a perfect management system, advanced technology background, rich sales experience and so on. A foreign wine company needn’t worry about license and tax fee if they cooperate with a local wine agent, which can get tax refund from customhouse. Furthermore, a wine agent has professional knowledge concerning wine, its packaging and transportation. Besides, being native, these local agents know what kind of wine Chinese may like. Therefore, a local wine agent is more likely to help make successful sales strategies for Brown Brother Company. However, as is often disclosed in newspapers, fake wine products is having an increased share in the sales market, leading to a sharp decrease in real wine production. Even though the Chinese government is fighting violently against fake wine manufacturers, .the problem remains to be solved. Although wine made by Brown Brother meets the National standard of the People’s Republic of China for Wine and its wine sales can be reached by cooperating with a local wine agent, the most inarguable point is that the law regulating the wine market in China is not perfect currently. The Chinese government lacks good strategies to control the wine industry. Therefore, it is not a good choice for Brown Brother to enter the Chinese market at the present moment unless the Chinese government makes strict rules to control the situation. In conclusion, the Chinese wine market developed quickly in resent years. However, it is perhaps not a good choice for brown brothers company enters the Chinese market currently. Brown Brothers company need to face different challenges in Chinese market. Although, more and more Chinese prefer drinking wine to drinking beer, the technology of producing wine in china has not perfect and the large number of fake wines exists in the market. The Chinese government should improve wine level and Reference 1. http://www.winesino.com/html/201205/9238.html 2. http://www.puntofocal.gov.ar/1_reunion08/chn197_t.pdf 3. http://www.awri.com.au/research_and_development/grape_and_wine_production/ 4. http://www.brownbrothers.com.au/misc/BBMV_Action_Plan_2010-15.pdf 5. http://www.invest.vic.gov.au/Assets/1559/1/Brown-Brothers-Milawa-Vineyard-201109-WEB.pdf 6. http://www.Brownbrothers.com.au/ourfamily/familyprofiles 7. http://www.puntofocal.gov.ar/1_reunion08/chn197_t.pdf 8. http://www.cnrenmai.com 9. http://www.baike.baidu.com/view/8465580.htm 10. http://www.geert-hofstede.com/china.html