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Medium Market Entry Location Selection Strategic Relocation

Opus Two

#Consumer #Wine #Agriculture #Luxury Consumer Goods
ProHub Comment

This case uses a market sizing framework combined with location analysis to evaluate strategic alternatives. It tests the candidate's ability to establish quantitative requirements (30 acres minimum for 120,000 bottles), apply those requirements to multiple options, and make a data-driven recommendation while considering qualitative factors like brand reputation and feasibility constraints.

Estimated Time 15 minutes
Difficulty Medium
Source Darden
50 / 100
Our client, Opus Two, is one of the most prestigious wineries in Napa Valley. The winery is renowned for crafting a single, exceptional wine – a Meritage Red Blend. Despite its reputation, Opus Two faces significant challenges due to climate change. Rising temperatures, extended droughts, and recent forest fires have made their location unsuitable for grape growing. As such, Opus Two is looking to relocate outside of Napa Valley and is seeking the firm’s help in choosing a new region and wine to produce. What factors should be considered when selecting a new location for Opus Two?

Clarifying Information

  1. What is a Meritage Red Blend? A Meritage Red Blend combines several grapes (vs. just one varietal like Pinot Noir) into a single wine. A portmanteau of “merit” and “heritage,” the name conveys high quality and tradition.
  2. What is the client’s goal? Opus Two is a passion project jointly owned by Darden’s Wine and Cuisine Club (WACC) and a sommelier from Philadelphia. Their primary goal is not to achieve a specific financial return, but rather to maintain their current level of production, quality of wine, and brand reputation.
  3. How does Opus Two sell its wine? They sell a limited supply of 10,000 cases (120,000 bottles) of wine per year to high-end restaurants all around the world as well as DTC online and in-person at the winery. A bottle sells for $500.
  4. When does Opus Two want to move? As soon as a new region and wine is identified.
  5. Has Opus Two identified any potential locations? Yes, we will see explore these locations later in our analysis.