Hello, I need help with an HBR Case Study: Preserve the Luxury or Extend the Brand? by Daniela Beyersdorfer and Vincent Dessain.

Content	Percentage
Identify the main issue or problem in the case. A couple of sentences at most Dont need a summary of the case assume that I have read the case and know the details. However, I want you to briefly state the problem evidenced!	20%
Identify 3 concepts from management of organizations that the case illustrates and/or helps explain why the problem identified has developed	40%
Discuss and support the action you will take to fix the situation; recommend course of action to be taken. While you may generate several options to be taken in the end, I want ONE and only one solution what should they do and why!!!!	40%

The case:

HBR Case Study: Preserve the Luxury or Extend the Brand? Jan 2011 'I think we are almost there," Jean-Paul called out as Gaspard approached "Just look at these grapes! This yeal xxl be even belli 2005 Gaspard de Sauveterre shivered as he stopped out of a side entrance to his chatcau. While the lato September days were still warm, he could feel autumn approaching. The 75-year-old owner of Chteau de Vallos a lancus wine-producing estate in the Bondeux region of France Tell a familiar thrill This was the season he and his team had worked toward the whole year, any day row the bell for the harvest, the tamous vendanges, would ring. He quickened his pece down the long well kept alley through the wrought-iron gates to start his ritual morning wakthrough the vineyards He loved these hours when the rising sun bathed the misty landscape in shades of yellow and gray. The quiet, cool air cut through the thoughts that had been swirling in his head since his granddaughter burst into his study yesterday with an audacious proposal Claire de Valhubert had grown up on the estate but had moved to Paris following the sudden death of her mother, Caspard's daughter, seven years ago. After graduating from one of Trance's elite sacandes coles she had worked for a top consulting firm before earning an MBA at losead Gaspard led expected her to come for the harvest, of course-she never missed itbut he had been surprised to hear about her plans to join the family business and radically change the centunes-old enterprise. Claire had explained her idea as simply as possible. In her opinion, younger wine enthusiasts were being priced out of high and French wines. And although she knew that de Valois had been steadily prohtable Since the 1980s, she worried about what might happen if the ostale allowed less expensive, lower qually winemakers, particularly those from outside the traditional wine-making regions of Lurope, to capture and retain the next generation of customers. She wanted de Vallois to cntcr thc affordable luxury market, selling directly to customers, as some of the other top traditional Bordeaux estates had done When Gaspard mentioned the encounter to Francois de Sauvetencehis son, Claire's uncle and the chteau's CEO-ater that evening Franois first reaction was to raise a skeptical eyehmw But he agreed to give his nicco a hearing, after all, she had inhoritod hor mother's 25% share of tho ostato, tho same stake he held Gaspard had the remaining 50% and although Franois had taken over day-to-day paralis five years ago. The lar de Salate would certainly weigh in on any change in slang particularly one as dramatic as Claire's. A Rare Vintage Turning into the fields, Gaspard saw Jean Paul Ouideaux, his estate manager, crouching over a vine and carefully examining its grapes He had hired Jean-Paul then a young agricultural engineer, 30 years ago after buying Chateau de Vallois. The estate had fallen into a slow decline under its last owner, but together, Gaspard and Jean-Paul had restored it to its former glory. The essential ingredient had always been there: a terroir with the ideal soil and microclimate, which, ac ording to the French, determines a wine's character. In a ranking of Bordeaux wine estates that recognizes their long-term track record in quality and reputation, de Vallois had in 1856 been classified as a Premier Grand Cru Classe (First Growth, which allowed the aslate to command top prices for its wincs Gaspard was not surprised; the weather hed heen warm and fairly dry all summer 'We could start picking Friday" Jean-Paul continued, 'but I'd prefer to wait until after the weekend. The weather forecasts for few showers and a drop in temperature, and I think that would add a little freshness." Plucking a few grapes himself, Gaspard concurred. As lie lellei lammic Sweeness lease his palale, Gasperd asked Jean Paul if he had seen Claire. Jean Paul smiled, "No but I'm sure I will. She hasn't been here the whole summer, so she'll inspect every comer of tho place to make up for it "Well, you'd better prepare yourselt," Gaspard repled. She wants to make a branded wine and sell it directly." Jean-Paul sighod. 'You know what I'm going to say Vincs arc like children: They need to be looked after very carefully It's the same with selection and blending. Without 100% dedication to excellence, you cannot make outstanding wine We already do two wines Isn't that enough? Trusting in Tradition Later that moming, Gaspard picked up a sct of ancient keys and descended to the collars. He cntcrod the vaulted first-year section in which the best of last year's harvest was aging in neatly aligned oak barrels stamped with the chteau's emblem Around 70% of this still-maturing wine had already been sold to specialist merchants called ngociants under a centuries old arrangement designed to let noblemen stay out of commerce. The negociants bought the wine a year before bottling and then sold it to distributors and importers. Visitors were always surprised when told they could not purchase a bottle of wine directly from the chteau. Prices for fine wine fluctuated widely, depending on the quality of the vintage, the reputation of the producers and negociarts, and the expected domand, and tho wore increasingly influenced by the opinions of expert critics Chteau de Vallois collected between 100 and 450 up front for a bottle of Grand Vin, for which a U.S. customer, for example, might pay $999 now for delivery a year later. Some of Gaspard's tellow grand cru class owners complained about the ngociants' margins, but Gaspard accepled hem. He knew le could rely on the regucienils to buy up Chleau de Vallvis Lolal vulpul, even in bad years, in order to maintain the relationship. What's more, since growers were paid in advance, the income from the sale made financing production a lot casicr. Gaspard unlocked the door to the private collar, which housed almost every vintage the estate had produced. As he strolled among the ceiling-high racks, he looked up at the last two bottles from 1848, both covered in dust "I thought you'd be here, Papa_Franois said, walking in. "I wanted to talk privately. Claire's idea is not going to work. In a good year, we don't have enough grapes for a third de Valois wine, so we'd have to buy more and mako a branded wine. If word got out about that people could start worrying that we'ro mixing those grapes in all our wines. Also, there are risks to marketing our wine ourselves. We can dange a high price for it because it's exclusive and customers canarily get it through a law up -ket providers. If pooplo think we nood to push it they might not be willing to pay so much." "Claire has thought about that, too."Gaspard said. She's thinking of keeping the new wine separate." Franois shook his head "Well, that's no answer You know some of the ngociants may not like to see producers of grands crus casses adding branded wines. So not only would we have to invest in a distribution channel for which we have neither the experience nor the means, but we'd also be risking the goodwill of the people who sell the wine we're currently making." Gaspard and Jean Paul had overhauled the vineyards, improved the drainage and subtly adjusted the blend. In time, the chteau produced perhaps the greatest of Bordeaux s five grands crus classes. It now sold about 150,000 bottles each year of its Grand Vin du Chteau de Valois a combination of carefully sclccted cabernet Sauvignon, merlot, petit vcrdot, and cabernet franc grapes. The estate used the best of the remaining grapes lu produce a second wine, the Furie averaging 200.000 bollles per year. The rest were sold to other states on condition that their origin would not be revealed It was a good business and had kept his children comfortable, but he somctimes worried whether it would sustain futurc gcncrations of de Sauvetates Gaspard knew his son was a braditionalist. Although he himsell still felt like a stranger in Bordeaux aller three decades, Franois has become well connected through his marriage to the daughter of an important ngoriant family You know, Cocile's family has been in the business since 1739," Franois pointed out. They aro as experienced in distributing wine as we are in making it. They take care of all the marketing, insurance, and transport stuff that we'd have to manage otherwise, and they can tell just where to draw the line botwccn cxclusivity and scarcity. They know to whom wc should be selling and who to avoid. How would we even determine what price to selcach year? Granted we might got bigger margins selling directly in a good year, bul whale wy lu du in a bad one? A Case for Change That evening, Caspard walked up the main staircase and entered the selon jaune. The rich polish on the furniture glowed in the soft candlelight, and the crackling fire was piled high with vine branches that scened the air. He look sal by the hearth and was reacting oul lo a dish of almonds or a side lable when his granddaughter came in "Are you all right, grandpapa?" Claire asked, looking at him closely. "Am I first for onco? Gaspard smiled, 't is good to have you back horc, my child. Sit down, and tell me what you have been up to today." She was about to answer when Franois, his wife, and Jean-Paul came in logether. "We just heard the latest forecast and we've agreed to start the harvest on Monday," Francois announced. The three took their seats and Gaspard handed the almonds around. I've asked for dinner in the kitchen tonight," he said. "It will be more intimate and after all, we're on fomu The chteau's authentically preserved kitchen with its enameled ranges and open fireplace was certainly more intimate than the dining hall, but tonight's table was nevertheless dressed with flowers, starched linen, and line porcelain. Lach place was sel with silver and four crystal glasses for the different wines that would acumuy each course. Caspard could tell that Claire was eager to talk business from the moment she sat down but she managed to contain herself until the main course She took a sip of the 2001 Grand Vin that accompanied the solt agngan ds Pawlac on her plate and turned to Gaspard. Grandpapa," she began, I know what you were thinking yesterday 'Here she comes her head all filled with business School nonsense Buti really believe that we aren't realizing even half of what this estate is worth Socing his son frown, Gaspard quickly replica, "Not at all. I may look like a dinosaur, but I am always open to new ideas. I'm sure your uncle agrees. Sensing encouragement Claire farged ahead propose that we introduce a branded wine sat a price of about 20 to 25 a bottle Our first wine is way beyond what most people can afford, particularly the older vintages even a bottle of the 2000 sells for about 1.000. And our second winc, at 100, is still too Expensive for the average person, particularly younger people to buy regularly She looked at Franois: 'I know this would work only if we producc at least one million bottles, so wed have lo buy grapes. If you're uncomfortable with that, we could buy more land instead and grow them We can't claim a Chteau de Valldis origin on this wine's label, but with Bordeaux grapes or land, we wuld alleasl slale Bordeaux urgin.'Guud lend here is expensive, Lul we could also buy overseas, like some of our competitors. Why not make a branded wine with Caltomia grapes and a label mentioning that our de Vallois team is in charge of it? Why shouldn't we capitalize on our brand? And if we can make such great wine here, why not make a wine for younger people somewhere pleAnd if we can make She continued, 'Of course, lo do this we would need our own distribution channel. We know, in fact, many of our customers, particularly the specialized importers, from their chatcau visits. For others we could set up our website to allow them to order directly Many are already asking for this Claire paused to taste her wine and seemed bolstered by its elegant, balanced flavon *-inally, I know how wc all tecl about even the best New World wincs not aging wol, too heavy, too fruity, no matter what Robert Parker says. Dut we can learn a lot from those producers in terms of marketing They run great advertising campaigns and do market research, which means they can adapt quickly to changing lastes by changing the lavors they ollen. I'm not suggesting that we meddle with our first wine, but with a branded wide we could be much more flexible and that would give us a chance to attract younger consumers get ahead of drinking trends and make sure that when they're ready for more expensive Wincs, they'll come to us." Franois pushed his plate fway "My deer, please don't take this baly, he began carefully I do consider how we can touch young customers and enhance our revenues-every CEO does. But I think your completary misguided. Vie might not take full advantage of our reputation, but isn't that partly why we have such a good one? And why spend money on a whole marketing and distribution machine for a low-priced wine? Jean-Paul strred uncomfortably. "Who will make this branded wine anyway?" he growled. "I have neither the expert se nor the interest in making fruity wines with other peoples grapes. Gaspard look advanlage of the silence that followed to call a healt. "I think that's enough for now. Let's continue this discussion in the boardiraam tomorrow Time to Harvest? ? Gaspard found the boardroom empty when he returned from his wak the next moming. He had woken up carly, rcplaying 3st nights conversation over and over in his mind. His son was right to worry. The aura of exdusivity around the first wine could easily be destroyed if people started to think that the estate was tampering with it But Claire had a point too. They had gotten too caught up in their routine of creating the perfect grand cru cass. Well, if nothing else, he reflected, she was making them think and would be a good sparring partner for Francois in the years ahead. The two were at loggarheads, but Caspard had not completely retired yet. It would be up to him to cust the deriding vote What Would You Do