1. Analyze and compare the Old World wine industry to that of the New World (please note: you must demonstrate that you have conducted two separate analyzes of industry structure). Which of the two industrial environments is more attractive for incumbent operators (those who compete in this sector)? Why?External Analysis – Competitive EnvironmentWhen initially analyzing the Old World wine industry versus the New World wine industry, the differences are evident. Strong representations of this phenomenon include factors such as size, production methods, brand equity, and production focus. By performing an analysis using Porter's five forces, one can clearly see the clear dividing factors between the Old and New Worlds. Threats of New Entrants Within the wine industry, it is often considered to have a low threat of entrants based on historical understanding. In the Old World, the use of technology and automation is avoided as well as the use of strategic methods of advertising and promotion. Additionally, a highly regulated production system is in place for some industry inputs, which introduces a low threat of new entrants. However, the threat has increased in the New World due to investments in technology-based production and automation as well as increased advertising budgets. The ability to start a high-end independent winery requires a significant physical and financial investment. Threat of Substitutes Generally speaking, other alcoholic beverages can be considered as a substitute for wine. However, specific substitution of wine in the New World is low because most individuals prefer to purchase wine from a retail store rather than produce their own. Whereas in the Old World, the possibility of producing wine... in the middle of paper countries like Spain, Belgium, the United Kingdom, Japan and China. Future growth can be achieved by positioning current brands in these emerging markets. Risks and Rewards As we continue to expand Mondavi's product line through joint ventures and partnerships in foreign countries, risks and rewards are inevitable. Benefits: • Reduction of risks while expanding the regional reach of the product line. • The ability to access new customer segments and expand their customer base. • Sharing of knowledge, technology and capital brought to the business by the partner.Disadvantages:• Regulations and obstacles in foreign territories are often extremely different from those in North America.• Earnings potential may be extremely limited due to the nature of the pricing.• The reputation of the company is at stake when it introduces a new product to a new market in a foreign country..