There are many factors such as the changing consumers’ demographics and expectations, the nature of competitions and the advent of technologies that affect the operations of a firm among others.
Question One: Environmental Factors Affecting Inniskillin
The environmental factors play a significant role in the business and in a country’s growth. The numerous factors that will be discussed in this context are political factors, economic factors, social factors, technological factors, environmental factors and legal factors (Jones & Hirasawa, 2008).
It can be mentioned that the political as well as the legal factors have been favourable for the success of the Inniskillin. After the end of the prohibition on sales of the alcohol, most of the companies have built their reputation in Canadian market of spirits and beers. Despite the wine market remaining sectioned, the market seemed to be expanding because of the Vintners Quality Alliance (VQA) that assists in maintaining the standard as well as the quality control. This can assist the Canadian wine to achieve more recognition in the global market especially for the production of the Icewine. It has been apparent from the case study that because of the permission that Vincor received from the North American Free Trade Agreement (NAFTA)., the company was capable of being the biggest wine shop in the country of Canada. It permitted Vincor to set up its own shops whilst the other small wineries were capable of selling only at the government-owned stores since they had limited options from the Liquor Control Board of Ontario (Jones & Hirasawa, 2008). The company was capable of gaining competitive advantage because of its own distribution channel in Canada. It was further apparent from the case study that domestic prices of the wine of the wineries in Canada were controlled by the government monopolies for getting their wine listed so that they can distribute as well as sell their wines. This led to low-sales volumes as well as restricted the options available in exporting, tourism activities along with the restaurant trade. Economic Factors The economic factors have been quite favourable for the Inniskillin. The reasons behind this have been the rising incomes as well as the rise in the consumption rate of the wine in terms of values and sales. The industry sought the global pressure of consolidation. However, Inniskillin undertook expansion strategy and thus enjoyed the benefits of economies of scale via acquisition so that it can produce cheap wines and thus achieve recognition in the domestic as well as global markets. It has further been apparent from the case study that because of the economic activities that have been concerned with the agriculture in Canada, the production of better quality European Vinifera has been possible (Jones & Hirasawa, 2008) Social Factors It can be mentioned that the taste and the preference of the consumers evolve on a continuous basis. With the rise in the income, the consumers were becoming more concerned regarding the taste. The premium wines became popular at the expense of low tier wines. It was because of the evolving consumers’ awareness regarding the premium brands that helped Inniskillin to enhance their product quality (Jones & Hirasawa