ACTA UNIVERSITATIS AGRICULTURAE ET SILVICULTURAE MENDELIANAE BRUNENSIS
Volume LIX 13 Number 2, 2011
ASSESSMENT OF ATTRACTIVENESS OF THE WINE-PRODUCTION INDUSTRY IN THE CZECH REPUBLIC
H. Hejmalová, R. Šperková
Received: December 17, 2010
Abstract
HEJMALOVÁ, H., ŠPERKOVÁ, R.: Assessment of attractiveness of the wine-production industry in the Czech Republic. Acta univ. agric. et silvic. Mendel. Brun., 2011, LIX, No. 2, pp. 89–98
The paper is focused on evaluation of attractiveness of the wine sector in the Czech Republic and on the competitive position assessment of company Věstonické sklepy, s. r. o. using the assessment of key factors and applying the GE matrix. Wine-production can be described as very attractive, favorably developing industry with signifi cant potential for growth and expansion. In particular, the growing popularity of wine consumption, increasing consumption and production, increasing competitive- ness, introduction of new technical innovations and introduction of innovative changes in produc- tion, storage and sales, are aspects that have a positive impact on the attractiveness of the sector. The permanent trend of development and market growth represent a well-verifi able criterion that implies there still is a signifi cant share of the untapped potential. Assessment of the competitive po- sition indicates relatively good strategic situation of the company in the attractive environment, but it is necessary to invest considerable fi nancial resources with an uncertain impact on maintaining the position. Main problems of the company namely include the fi nancial situation which is specifi cally addressed by utilizing short-term liabilities. The company can be described as prosperous in terms of established technologies and implementation of innovative changes, human resource management, use of production and storage capacities, marketing factors, selection of the appropriate type of pro- motion, and contracting reliable customers. The strategy based on the position in the GE matrix suggests that the company should focus on pro- duction of quality wines and on the off er of specialties to penetrate stronger into the market and with a better competitive advantage. The company should not forget the completion of the proper func- tioning of the website, which should lead to an increase of the number of potential customers.
wine-production industry, attractiveness, competitive position, GE matrix, strategy
The wine sector is one of the dynamically develop- Czech wines with uniqueness, originality and ex- ing industries in the Czech Republic (CZ). Changes ceptional taste that is characteristically spicy, and it in this sector started before the entry into the Euro- gives Czech wine a potential advantage in the global pean Union (EU) in 2004, when many new vineyards market. All these changes are refl ected in the exis- were planted mainly owing to government sub- tence of individual producers, who must respond to sidies. The entry to the EU had led to a more strict these changes appropriately. The existences of these conditions and legislative regulation, which had changes in relation to the physical possibilities of to be adapted by many growers. The structure companies to respond to them are the primary pre- of grown varieties, which are ensuring the quality requisites for consideration of further stay in sector. of production and competitiveness of Czech wines The aim of this paper is focused on evaluation of not only in the EU market, are modifi ed signifi cantly attractiveness of the wine sector in the Czech Re- at present. Natural and climatic conditions provide public and on the assessment of the competitive po-
89 90 H. Hejmalová, R. Šperková
sition of company Věstonické sklepy, s. r. o. Based of the life-cycle, government subsidies, the cost on the fi ndings it is suggested whether the company of raw materials, location, stakeholdes etc., and should remain in the wine sector or whether the competitiveness criteria – market size, market company should terminate its business or whether growth, business quality, price, costs, effi ciency, it should re-orientate to doing business in another innovation, fi nance, management skills, produc- industry. At the same time, it is proposed the appro- tivity, etc. priate strategy which is focused on the future activi- 2. With expert assessment the importance and ties of the company. power of specifi c criteria will be quantifi ed using scoring scale in the interval <−5; 5>. These two MATERIALS AND METHODS values are multiplied among themselves and re- sult in total score. This procedure is applied to ev- To reach the aim of this paper, the authors used ery single criterion. the GE matrix, which comes from knowledge about 3. By calculating the total score – the sum of the par- the whole wine market and determines the exact po- tial results – and by calculating the maximum pos- sition in the sector in connection with its attractive- sible score, which is determined by the number of ness. The GE matrix is composed via the point score criteria x multiplied by positive border value of of attractiveness and recognition of the competi- the interval of the importance and the force so: tive position of the company in the sector. The de- maximum possible score = x × 5 × 5, we get a percent- tected position helps to determine further business age score, which we can calculate as behavior. It will provide information about whether the company should stay in the market or whether it total score × 100 percentage score = . should leave this sector and focus on another busi- maximum possible score ness. The Attractiveness-Competitiveness Matrix – the The obtained percentage score will determine the GE matrix – is a modifi cation of BCG Matrix, and position of the company in the GE matrix. it is also sometimes referred to as McKinsey Matrix. A er the quantifi cation it is possible to record the This matrix (Fig. 1) is based on two criteria – the at- company’s position in the matrix (Fig. 1) and iden- tractiveness and the competitiveness (Bartes, 2008). tify the square, which, based on its interpretation, According to Keřkovský and Vykypěl (1998) it fol- will help to formulate proposal of strategies for the lows this procedure: company. (Keřkovský, Vykypěl, 1998): 1. When processing the matrix, it is important to Leader means many advantages, high growth rate, determine fi rstly the attractiveness criteria – size and ability to infl uence the sector, low costs. of the sector, annual market growth rate, micro- Leader/ growth – the most important is to hold the environment profi tability, technology stabil- position with maximizing sales. ity, capital demands, competitive rivalry, the im- Cash generator – lo w attractiveness inducts that pact on the environment, industry capacity, stage there is a competitive danger. Income derived from
GE matrix Strong Average Weak
100 % Leader Try harder Double or quit Attractive
Leader/ Growth/ A Phased 0 % Proceed with withdrawals Average Growth care
Cash Phased Divestment ATTRACTIVENESS generator withdrawals Unattractiv -100 %
100 % POSITION -100 %
1: The GE matrix Source: Keřkovský, Vykypěl (1998) Assessment of attractiveness of the wine-production industry in the Czech Republic 91
the sales of these products is used for more attrac- growing. Development of the wine production has tive ones. a growing character. Try harder is relatively attractive strategic posi- Another important aspect of this dimension is tion. It is necessary to ensure improvement of the consumption. Consumption of table grapes and position, which is expensive, profi ts are low. wine (Fig. 2) is growing. For the future assessment of Double or quit forces companies to get into better the consumption in the Czech Republic there were positions. However, it is necessary to have enough fi - interleaved the data with a trend line (Fig. 2), which nancial resources for the movement. has the form y = 7,4855 + 0,1736x. Growth/ Proceed with care is an average position. Parameters of the trend line come out from the The product is competitive and the company has to system of equations: try to have the maximal sales without subsidies and expansion. ∑yt − nb0 − b1∑t = 0. Phased withdrawals mean that it is better to pull ∑y t − b ∑t − b ∑t2 = 0, off the product from the sector. t 0 1 Divestment intuitively suggests the company’s ap- where: proach in a given situation. n = 60
RESULTS ∑yt = 766,9 ∑y × t = 26 515,2 b = 7,4855 Evaluation of attractiveness t 0 ∑t = 1 830,0 b = 0,1736 Attractiveness of the wine sector is infl uenced by 1 many factors. For purpose of this paper it is used ∑t2 = 7 3810,0 a division according to Sedláčková (2000), which is oriented to the sector dimension, sector structure, infl uence of the driving forces of change, a probability of entry or exit of y = 7,4855 + 0,1736x. a big company, capital requirements, demand stability, tech- From the trend of consumption development in nological level and innovations, costs conditions, intensity of the Czech Republic the consumption would be ap- competitive fi ght and the legislative, legal and other regula- proximately 20 liters per capita in 2015. It is evident, tions. that the Czech Republic will not approximate to Eu- ropean average, but this development can be evalu- Market size and growth ated as very positive for the developing sector. Market size and growth can be analyzed from From these facts it is possible to conclude, that the many viewpoints. One of them is a character of the wine sector is a positively developing sector, which development of wine production. The total vol- is in a growth phase of the life cycle. It is possible to ume of wine production was 840 000 hl in the wine derive it primarily from the growing wine produc- year 2008/2009, including 530 000 hl of white wine tion and growing quantity of wine import in con- and 310 000 hl of red wine. In comparison with the nection with its growing consumption in the Czech wine year 2000/2001, when the production was only Republic. 520 000 hl, the wine production is permanently
20,0 20 18,0 18,5 16,0
14,0
12,0
10,0
8,0
6,0 6,4 4,0
8 1 4 7 0 3 6 9 2 8 1 7 3 8 4 5 5 5 6 6 6 6 7 7 8 8 9 0 9 9 9 9 9 9 9 1 1 1 1 19 1 19 1 19 1975 1 19 1984 19 1990 19 1996 1999 2002 2005 20 2011 2014
The wine consumption (liter per capita) The development of wine consumption to the year 2015
2: Development of wine consumption in 1948–2015 Source: Czech Statistical Offi ce, own work 92 H. Hejmalová, R. Šperková
I: The table of estimated sector rate Wine companies Production in bottles Production in liters Estimated market rate Vinařství Mutěnice, spol. s r. o. 28 000 000 21 000 000 25.00 % Skupina Bohemia Sekt 25 500 000 19 125 000 22.77 % Moravské vinařské závody Bzenec 9 500 000 7 125 000 8.48 % Vinium, a. s. 9 200 000 6 900 000 8.21 % České vinařské závody, a. s. 8 000 000 6 000 000 7.14 % Templářské sklepy Čejkovice, vin. druž. 7 000 000 5 250 000 6.25 % Znovín Znojmo, a. s. 6 000 000 4 500 000 5.36 % Skupina Soare Sekt 4 400 000 3 300 000 3.93 % VINSELEKT Michlovský 4 000 000 3 000 000 3.57 % Vinné sklepy Roztoky, s. r. o. 2 400 000 1 800 000 2.14 % VÍNO BLATEL, a. s. 2 000 000 1 500 000 1.79 % Zámecké sklepy Strážnice 1 300 000 975 000 1.16 % PATRIA Kobylí, a. s. 1 200 000 900 000 1.07 % Ostatní 3 500 000 2 625 000 3.13 % Source: Czech Statistical Offi ce
Sector structure from the level of concentration competition with minimal infl uence of small com- viewpoint panies on the situation. The quantifi cation of sector concentration comes The driving forces of change from market shares of particular companies in Tab. I and Fig. 3. The main driving forces of change forces are Major infl uence on the wine sector has about ten long-term industry growth rate and new customers. The biggest companies with the highest market share. wine popularity in the Czech Republic is grow- From the point of view of smaller producers and po- ing (Tab. I) at the expense of other alcoholic bever- tential new entering companies the sector structure ages (Bublíková, 2010). Consumers are already able is less attractive, because there is relatively strong to recognize and appreciate quality range (quality
2%1%1% 3% 4% 2% 25% 4% 5%
6% 7% 23% 8% 9% VinaĜství MutČnice, spol s r.o. Skupina Bohemia Sekt
Moravské vinaĜské závody Bzenec Vinium, a. s.
ýeské vinaĜské závody, a. s. TempláĜské sklepy ýejkovice, vin. druž.
Znovín Znojmo a. s. Skupina Soare Sekt
VINSELEKT Michlovský Vinné sklepy Roztoky, s.r.o.
VÍNO BLATEL,a.s. Zámecké sklepy Strážnice
PATRIA Kobylí, a.s. Ostatní
3: Estimated market rate Source: Czech Statistical Offi ce, own work Assessment of attractiveness of the wine-production industry in the Czech Republic 93
wines are evaluated in average from 100 CZK to 200 the EU restrictions, the competitive infl uence, geo- CZK) and gradually they stop buying cheaper wine graphical location, unstable climatic condition and from table category and they start to concentrate on mainly high input costs. The input costs are very quality and on supply of better quality and so-called high and return rate is low or none. These high de- land-wines. These facts arise from research by Fo- mands on capital investments introduce a risk above cus, Marketing & Social Research in 2009, which all for he small businessmen with low capital and in- was addressed to 1200 respondents from whole suffi cient business knowledge. In spite of these fac- country (Vaculová, 2009). tors, the threat of new entrants is considered high. It is necessary, that the national wine merchants will aim their production mainly to the quality, but Capital requirements also to fulfi ll a demand of diff erent kinds of wines, Capital requirements in the wine sector are high news and specialties like very popular “vintage”, and they represent a strong barrier of entry to the “selection of grapes”, or the ice-wine and straw- sector. Particularly the input costs require a lot of wine. The pink wines are becoming very popu- capital needed. In a case when a company does not lar as well, mainly in France. Specialties like bar- own a vineyard and the company wants to buy the rique wine (it ripens in oak barrel and it takes oaks vineyard, because it does not want only to buy the aroma), botrytis selection (made from grapes with grapes, it is not a small investment. It is also neces- the grey noble rot) and Sur-lie wine (ripens in a ves- sary to have or to hire required places for produc- sel on mild yeast) are an eff ective way to the diff eren- tion, storage and sales. Inevitable is to obtain the tiation of products and the opportunity to extend equipment for processing the grapes, like a press, the off er to customers. The diff erentiation is con- pumps, barrels, stainless steel containers, diff erent nected with new marketing forms. For the sector preparations, labeling line, bottles, corks etc. It is it is valid so far, that many customers perceive wine necessary to highlight, that capital requirements are as indiff erent and when buying they are concentrat- grow in time, because all equipment is becoming ing on prices, availability or only on “colors” (Tom- constantly out-dated. It is obvious, that entry into šík, Sedlo, Šperková, 2007). the sector is practically impossible without enough Other movement forces are the changes of social capital. priorities and life style. Their infl uence is mirrored very much in the whole sector. As we can see from Demand stability Tab. I, the wine consumption is growing. Wine is be- The demand in this sector is relatively stable and coming a part of a life style; it is an important part even, what is supported by used technologies, which of social life. Nowadays trend promotes wine drink- extend durability of the products. So regardless the ing and customers demand more information about demand deviations it is possible to hold a stable this product. volume of production. The seasonality of the de- Globalization is a force, which cannot be le out. mand is showed especially at the harvest time, when Globalization is mirrored in all areas. With the en- the grapes are processed and at a so-called young- try to the EU the Czech Republic became an opened wine time, when the fi rst wines of the year are com- country, so there is a growing pressure on home pro- ing to the market. ducers. An important infl uence has the Common Market Organization (CMO), which went through Technology and innovations a planned reform in 2008, and which tries to sup- The technological development, which is rep- port successful vintners and fi nancially support the resented by new pieces of information and tech- abortive vintners, who would leave the sector. niques, can lead to the change of production capacity and other company’s activities. In the wine Competition sector the quality of distributed products is very im- The competitive structure is going through a de- portant. The primary raw materials for the wine pro- velopment phase, when the concentration is grow- duction are the wine grapes. The development of ing. Today the groups are arising, they concentrate new varieties is very important technologic trend. many little producers and they obtain stronger If a new variety is accepted as suitable for growing competitiveness and economies of scale. The main in wine regions in the Czech Republic, it is regis- player in the sector is Vinařství Mutěnice, s. r. o., tered in the State variety book. In year 2008 there which is followed by The Group of Bohemia Sekt, were registered three new blue varieties (Cearason, a. s. (Fig. 3). There are also other about ten presti- Frata va, Sevar) and one white variety (Rinot) in the gious wine producers and many other companies, book (Bublíková, 2009). which do not have such an infl uence in the sec- Many possible procedures exist in connection tor, but they hold a very important place and have with the production process itself. The most im- their own customers. There is also a big number portant is technology-driven wine fermentation of small vintners, who mostly operate on a local and gravity technology, and then it is, for example, bases (Šperková, Vránová, 2007). the integrated production, which is most favored For newly coming companies to the sector the big- in Austria. In the Czech Republic it is used only for gest barriers are the legislation, the country politics one third of the whole production. and the wine sector politics, legislative demands and 94 H. Hejmalová, R. Šperková
From the packaging materials according to important European legislation is Council Regula- Bublíková (2009) the most favored are the glass tion (EC) No. 1493/1999 and Commission Regula- bottles (38 %), than the wine in paper boxes (33 %). tion (EC) No. 1227/2000 on the common market or- Boxes are popular thanks to the low price, but most ganization for wine. Today there is a large amount o en these boxes contain lower-quality wine. Wine of aid fl owing into the wine sector. It is the support from barrels (19 %) and wine in PET bottles (10 %) from the Czech Republic, the EU and from non- follow. For customers the quality-wine is linked governmental institutions. with glass bottles (Bublíková 2007). The new type of packaging is wine in tins, and packaging in bigger The state support volume BiB (bag-in-box) with typical volume rang- The subsidy policy is determined by Principals, ing from 3.5 to 10 liters. Their special valve prevents with which it is assessing conditions for providing re-introduction of air. subsidies by § 2 of the Act No. 252/1997, about ag- The newest trend is production of non-alcoholic riculture, for year 2008 (Bublíková, 2010). The next wine. It is really wine, which was produced from resource from which it is possible to draw fi nance standard grape-wine with the help of dealcoholisa- are supports from the Support and Guarantee Ag- tion process (removing of the alcohol). This trend is ricultural and Forestry Fund. The main activities of connected with healthy life style, but with an impos- this Fund are maintaining supports in the form of sibility to drink alcohol too (e.g. due to health prob- interest subsidy and guarantee the principal part of lems or driving). their loans to the economically recoverable business plans announced in the following program – The Costs conditions farmer and the land program (Bublíková, 2010). The costs conditions are relatively positive for Very important are also the supports from Wine wine producers, although there is a growing compe- Fund by Act No. 321/2004 (Bublíková, 2010), which tition in this sector, and a pressure on price reduc- go to the marketing strategies, sales, protection of la- tion. There is a pressure coming from the big players beling wines by geographical origin, public aware- in the sector, who produce big volumes with lower ness, the development of cultural traditions as part direct, variable and transaction costs. of the country and European heritage, the develop- ment of wine tourism and the development of pub- Legal and other regulations lic relations in the fi eld of viticulture and wine pro- These factors include a group of laws, regulations duction. and legislative measures, which infl uence the com- panies. The sector of wine production in the Czech The EU support Republic is infl uenced by many politic and legisla- The EU supports are applied by government tive factors. The factors include for example sub- regulation No. 245/2004 together with implement- sidy policy, support for non-governmental organi- ing legislation. In 2009 the reform of the common zations, monitoring the quality of wine, fi scal policy, market in wine sector had cancelled all applica- the Law on viticulture and wine production, licens- ble regulations until that time, according to which ing and aids policy, etc. (Šperková, Duda, 2009). it was possible to pay the aid for the restructuring The fi scal policy is adapted by the Act No. and conversion (Agris, 2009). The support is aimed 235/2004 eff ective from May 1, 2004, which de- at a change of vineyards varietals, an increase in number termines the VAT rate for wine to 19 %. Based of vines, moving into the hillside vineyards, and protection on the Act No.129/1999 with validity from July against damage of vines. 1, 2000, the excise tax for the wine with price to the Wine producers can also demand an investment 2.5 CZK/l was cancelled. This tax was le only for support from the CMO with wine now. Investments sparkling wines, champagnes, dessert wines and within the CMO with wine off er the possibility of spicy dessert wines on the level of 2 340 CZK/hl. subsidies for purchase of a new press for grapes, purchase The excise tax for wine is 0 CZK/l. For the wine in- a new wine-fi lter and special containers for fermentation of termediate products there is imposed the excise tax red wine to obtain an active equipment to diving grape marc of 2 340 CZK/hl. hat. Wine legislation is governed by the Act on viticul- ture and wine production No. 311/2008, which re- The support from non-governmental organizations placed on the 17th July 2008 the Act No. 321/2004, It is run by Agrarian Chamber, National Wine used till 2008. The other legislative measures are Centre, o. p. s., Moravian winemakers Moravín As- The Notice determining the sub-regions of villages sociation, Partnership Foundation, and other insti- and tracks No. 324/2004. The government notice tutions. on the implementation of certain things in com- mon market organization for wine (restructuring) Assessment of attractiveness No. 245/2004, Ministry of Agriculture Notice No. Sector development has been very favorable in the 97/2006, Notice of the Ministry of Agriculture to the past fi y years. The continual development trend aid of the Wine Fund. The EU legislature cannot be and growth of the sector is a very well evaluable cri- omitted, because it needs to be followed since 2004, terion. It forecasts that there is a large share of un- when the CZ has become the EU member. The most used potential. The wine consumption is not on the Assessment of attractiveness of the wine-production industry in the Czech Republic 95
level of EU average, even though it is growing. It is from the neighboring villages. Now this company expected that this development will continue. The has 4.35 hectares, which cover approximately 75% customers prefer the Czech wine. But it is observed of their total production. They must buy the rest of that the Czech production can supply only about the grapes. The company produces around about one third of the overall demand in the Czech Re- 60 000 bottles per year. The price range is from CZK public. 85 for quality wines to 400 CZK for vintage wines, It is clear, that the attractiveness is infl uenced by they also off er the ice-wine, straw and a newly also the subjective view of the evaluator. Evaluation is barrique wines. diff erent for companies of diff erent size. Big players in the wine sector have diff erent view than smaller Internal environment of the company companies with a lower production and lower pos- It is possible to divide the internal environment sibility to infl uence the market development. Very into factors of scientifi c and technological develop- important is also the time factor. It is assumed, that ment, marketing and distribution factors, factors of the sector concentration will grow and companies production and management, factors of business in will try to unite their strengths with smaller com- and labor resources, and fi nancial and budgetary panies and increase their competitiveness. It is pos- factors. sible, that new foreign investors will come as well, which will result in other changes. The time is very Scientifi c and technological factors important in the assessment of the market attrac- The company is trying to follow new develop- tiveness, which is assessed as attractive under the ments in the sector. The company is aware, that current assumptions and conditions. The attractive- without the innovation it is losing competitiveness. ness quantifi cation based on evaluation of selected Introduction of controlled fermentation technology, indicators is shown in Tab. II. the overall modernization of equipment and use of resistant varieties of quality wine contribute to the Assessment of competitive position expansion, retention, and strengthening market po- The company Věstonické sklepy, s. r. o. resides in sition. the village Dolní Věstonice, which is in the Mora- vian wine region and belongs into the sub-region Marketing and distribution factors Mikulov. It has been entered in Commercial regis- Marketing strategy comes from the historical evo- ter on 29th October 2009. This company is possessed lution of the region. The main characterization is by two owners and it has a paid-up primary capital a clay sculpture of the Věstonice Venus, which was of 300 000 CZK. The business subject is wholesale, found by Karel Absolón near the company seat, it beverage, commission trade, agriculture, including formed the basis for a unifi ed visual style. The com- the sale of unprocessed agricultural products for re- pany distributes its products particularly to the gas- sale or processing, warehousing and cargo handling. tronomy, wine shops and it is engaged in direct sales Věstonické sklepy, s. r. o. focuses on use of new tech- to customers – mainly regular subscribers. It is con- nologies for wine production and they connect cul- nected to the project Moravian wine trails, too. The ture, tradition and history. The grapes come only products are given to the wine actions, festivals, ex-
II: Quantifi cation of attractiveness of the wine sector Attractiveness of the wine sector (points <−5;5>) Factors Importance Power Score Market growth 5 3 15 Market size 4 3 12 Concentration rate 3 2 6 Driving forces of change 5 3 15 Competition in the sector 3 3 9 Intensity of competitive fi ght 4 3 12 Demands for the capital 3 4 12 Demand stability 5 4 20 Technological level and innovations 4 3 12 Costs conditions 3 2 6 Legal and other regulations 4 4 16 Total score 135 Maximal score 275 Percentage score 49.1 % Source: Own work 96 H. Hejmalová, R. Šperková
hibitions and fairs. The sales promotion should when neither of the indicators reaches optimal val- be aided by the website
III: Quantifi cation of competitive position Quantifi cation of competitive position (points <–5;5>) Factors Importance Power Score Quality of production 5 2 10 Diff erentiation of production 4 1 4 Price level 2 2 4 Production costs 3 –2 −6 Promotion, advertisements 5 –2 −10 Image 4 1 4 Assets and investments 4 –3 −12 Technical a technological level 3 1 3 Financial situation 4 –5 −20 Distribution advantage 4 2 8 Location advantage 3 3 9 Total score −6 Maximal score 275 Percentage score −2,2 % Source: Own work
GE matrix Strong Average Weak
100 % Leader Try harder Double or quit Attractive 49,1 % A
Leader/ Growth/ Phased Average 0 % Proceed with withdrawals Growth care Cash Phased Divestment ATTRACTIVENES generator withdrawals Unattractive -100 %
100 % -2,2 % -100 % POSITION
4: GE matrix for Věstonické sklepy, s. r. o. Source: Own work in purchasing power of population can cause a de- as a necessity to work on the company position. crease in demand for high quality and special wines, It means, that it must resolve its own bad fi nan- which again can be refl ected negatively in the de- cial situation. There are many possibilities; one of velopment of the fi nancial results of companies. them is integration with another company or fi nd- Wine production industry in the CZ can be classi- ing a foreign investor. This possibility isn’t real, be- fi ed as very attractive. It is necessary, that this sector cause it wants to have its own name and sole own- will further develop specifi cally in promotion, tech- ership. So it needs to produce quality and special nical and technological innovations and eff orts to wines that can be competitive. It doesn’t seem to be produce top quality wines. Without these develop- good to distribu te the wines through supermarkets, ments advantages of the wine production connected but it is better to concentrate on wine shops and gas- with its revival or renascence will be lost. tronomy. It would be good to use the potential of the The company position in the GE matrix was Moravian wine trails project. identifi ed as “Try harder”. That may be interpreted 98 H. Hejmalová, R. Šperková
SUMMARY Based on the analysis of particular factors of attractiveness the actual situation of wine production in- dustry was determined. This sector is evaluated as very attractive and develops positively. The growing popularity, increasing consumption and production, increasing competitiveness, the introduction of new technical innovations and introduction of innovative changes in production, storage and sales, are aspects that have a positive impact on the attractiveness of the sector. From the detailed analysis of the internal environment it is possible to infer, that the company has troubles with use of short-term external sources. In terms of established technologies and implemen- tation of innovative changes, human resources management, use of production and storage facilities, marketing factors, selection of the appropriate type of promotion and contracting reliable customers, the company can be described as prosperous. Thanks to the GE matrix we may look at the sector and we have instructions how the company should behave so that it will stay in this sector. Věstonické sklepy, s. r. o. despite their bad fi nancial situation, has perfectly unifi ed visual style, which is important for the immediate identifi cation of the product, which is one of the strongest promotions. The strategy for this company should also concentrate on right functioning of the website. This will attract more potential customers. Above all the company must focus on the quality production with recommendation to specialize on products such as ice wine, straw or barrique.
The paper is a part of solution of the research plan MSM 6215648904 „The Czech economy in the process of integration and globalization, and the development of agricultural sector and the sector of services under the new conditions of the integrated European market“.
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Address Ing. Helena Hejmalová, Ing. Radka Šperková, Ústav managementu, Mendelova univerzita v Brně, Zemědělská 1, 613 00 Brno, Česká republika, e-mail: [email protected], radka.sperkova@men- delu.cz