Being Strategic: French Winery Considers Indian Market

Lifestyle Changes Through Affluence
Between 2012 and 2015, India's growth averaged 8 percent annually. This economic success
was due, in large part, to India opening its economy to foreign competition, making changes in
manufacturing and instituting measures to encourage international trade. The signs of economic
growth in India were clear: new houses were being constructed in city suburbs, many more cars
were using the already crowded roads, and a new, affluent middle class had emerged. With the
growth of the middle class came a demand for luxury goods. One of these was wine.
Rapid Growth in Demand
At the beginning of the 21st century, the wine market in India was almost non-existent. By 2016,
the market was expanding rapidly, with annual growth running at over 30 percent. A new habit of
wine drinking had been encouraged by duty exemptions the Indian government made to boost
wine consumption. By 2016, there were three major companies in the Indian wine market; they
met about 90 percent of demand. However, the remaining 10 percent of the rapidly growing
market was large enough to accommodate more competitors. Because the quality of Indian wine
was still relatively low, some companies had started importing foreign wines and rebottling them
in plants in India for domestic consumption.
A Small Winery Sees an Opportunity
Chateau Camargue was a small winery located in the Avignon region of France. Dominated by
the more popular wineries in the region, the company had struggled in recent years, despite the
glowing reviews its cellar had received. The owner of Chateau Camargue, Pierre Camargue,
attended an international wine show at the end of 2015 and was intrigued by the possibilities of
exporting to India. The European wine market was saturated, his company's expenses were rising
drastically, and he needed a way to boost cash flow and expand market share rapidly. Exporting
to India seemed to be the ideal opportunity.

Learning Outcomes
This case study relates to the following learning outcomes from the module Implementation of
Market Entry Strategies in the course International Market Entry Strategies:
• Determine the best approach to implement a market entry strategy, analyzing the value of
potential forms of each strategy.
• Implement a direct exporting strategy, whether exporting directly to foreign
consumers/businesses, or using intermediaries such as agents.
• Implement an indirect exporting strategy by finding and choosing an appropriate domestic
intermediary, such as a trading house or confirming house.
• Establish and manage foreign direct investments (FDIs) in the target market.

1. What are the main market entry barriers that Chateau Camargue faces in entering the Indian
wine market?
2. In your opinion, what would be the best market entry strategy for Chateau Camargue to
overcome its financial difficulties? Explain your reasoning.
3. Should Chateau Camargue consider a long-term foreign direct investment strategy in India?
Explain your reasoning.