Hence, Freemark Abbey Winery might be better off harvesting immediately before the storm and eliminating the risk of the rain spoiling the grapes. The not-so-ripe grapes could yield wine that sells for $2.85 per bottle. If Jaeger decided to harvest later and the storm did not strike, there is a high chance that the acidity of the grapes would not fall below about 0.7 percent. In this case, the resulting wines would still sell at a higher price than wine produced from the not-so-ripe grapes harvested now, regardless of what the weather condition is like. However, there is a slight chance that the acidity of the of the grapes would drop below about 0.7, in which case the resulting wine would sell at a slightly lower price of $2.50 per bottle.
To make this decision, a decision tree, Michael Porter's (1997) five forces analysis, and SWOT analysis are used to aid in the decision making process. Both five forces analysis and SWOT analysis reveal that Freemark Abbey Winery should pursue a differentiation strategy. From the decision tree in Appendix 1, it can be seen that there are 3 possible decision alternatives and 7 possible outcomes. ...Show more