A Business Analysis of Podere Riosto an Italian Winery and Vineyard

Podere Riosto

Podere Riosto is an award winning winery and vineyard in the hills of northern Italy. However, winning awards and continuing to sell
wine isn’t enough for a business to survive long-term. Growth is Allesandro Galletti’s ultimate goal, and he shares this idea of growth
with his wife, daughter Christiana and son Lorenzo. However, each family member may have slightly different initiatives when it comes to
growth, or some may not want a part in the family business at all.

That being said, growth needs to occur, regardless of the method they use
to reach it. In order to figure out which method is best when growing and expanding Podere Riosto, the strengths, weaknesses, opportunities,
and threats need to be compared from each situation.

The first option, which Alessandro favors, is to increase focus on the existing wine business while expanding wine production into foreign markets, with a quality-over-quantity model in agritourism. The second option, which Alessandro’s daughter Christiana favors, is to continue their efforts in wine production, but focus much of their resources towards the agritourism side of the business in order to expand overall.

Naturally, there are different strengths, weaknesses, opportunities, and threats that apply to either situation, or at times both. These components need to be analyzed in order to determine what route is best for the Galletti family and the Podere Riosto vineyard.

In order to determine the best course of action, first to be discussed are the strengths of Christiana’s idea of increased focus on
agritourism. One strength is that the Galletti family already has the infrastructure, and a semi-constant stream of customers already
indulging in the farm-holiday experience offered on the Podere Riosto vineyard. In addition, Christiana, who ultimately wants to run the
family company, has certifications in agritourism and has studied it for many years. This alone is a huge internal advantage that the family
can use, even to gain competitive advantage over a potential competitor that is also trying to get a footing in the agritourism market. In order to increase their overall focus on agritourism, the family can also utilize the already formed marketing communications program that they have. Ultimately, Christian plans on building their agritourism and wine production business by starting with lower prices, building revenue, and eventually racing prices gradually to make more annually. The strengths that spawn from the internal business the family already runs will hold a great determination in the outcome of the enterprise as a whole.

However, although the internal relations already instilled in the company will help, there are also weaknesses and disadvantages that will arise as well. For instance, if Alessandro continues to focus on wine production, the agritourism of the family business won’t get the
attention it deserves to thrive and produce revenue. Also, there is an overall limited marketing budget for both the winery and the farm-
holiday experience. Lastly, if Alessandro continues to run the business the way he does, he will continue to focus on providing quality over
quantity, which could potentially turn off an entire customer base. On the other side of the spectrum, there are also external factors
that can either help or hurt the Galletti family business. The extermal opportunities of increasing Christiana’s role and focus into the
agritourism portion of Podere Riosto is simply the fact that Italian agritourism has notoriously strong growth prospects. Traditionally,
since the beginning of agritourism even before 1998, agritourism has grown consistently each year. This alone shows that more consumers
are interested in the holiday-farm experience that Podere Riosto will potentially provide.

Lastly, regarding the increased focus on agritourism by the Galletti family, are the threats that the vineyard may face. This really
boils down to the declining economy in Italy. Due to the political unrest in the nation, the economy is headed towards its second recession in three years. This could lead to not only less Italians spending money in agritourism, but less foreign tourists seeing Italy as a destination for
agritourism. Unfortunately, the economy in Italy isn’t something that can be controlled or changed by Podere Riosto. Contrarily, the family could continue with the current business plan that Alessandro has been able to profit on. This would mean continuing its focus on wine production, increasing production levels, and also embracing agritourism, but as a higher priced luxury in order to provide side-profits for their focus on wine. Once again, this possible strategy has strengths, weaknesses, opportunities, and threats.

The internal strengths that the Podere Riosto vineyard can build off of include, similarly to agritourism, the already acquired
infrastructure that the family already owns. However, where asagritourism would be a new avenue for the Galletti family to pursue,
the family already has customers, business, experience, and a reputation in wine, which can at times be intangible assets that out
value others. The family has made award-winning wine for years, and could potentially double their production efforts considering they’re
only running at half-capacity. Although the strengths that the family possesses and can build off of show great hope for the future of their wine operations, the internal weaknesses that harm the business may override. If Alessandro agrees to allow for continued agritourism as well, there could be less attention of resources focused on the wine sector of their business. Additionally, Alessandro at his age may have to hand the business to his kids, or kid, considering Lorenzo refuses to enter thee family business. The issue with this is that Christiana doesn’t know enough about the wine business in order to run it alone.

In addition to their limited marketing budget, the idea of increasing focus on increasing wine production may not be the best idea. The external opportunities and threats may ultimately decide the fate of the Galletti family’s winemaking business. The opportunities, such as the long-routed history of making wine in the Italian culture, are able to help the family succeed if choosing to pursue an increase in wine production. Italy has forever been known as one of the greatest wine producing nations of the world, and the region the Galletti’s are located in is also known as well. This can be used in marketing techniques, and utilized in the family’s favor. On the other hand, the extermal threats heavily outweigh the potential opportunities. The declining Italian economy and decrease in European per capita wine consumption are huge factors to consider.

In addition, Alessandro is interested in entering other markets, such as the American wine market, which are hard to enter and price competitive. With people choosing quality over quantity, if Alessandro had to lower his prices to sell to other markets, the producer, wholesaler, distributor relation in other developed economies may prove hard to enter. Ultimately, there must be a way for the Galletti family to continue their growth efforts, either through increased wine production, or through a heavier focus on the agritourism industry. In my opinion, Alessandro should agree to allow his daughter, Christiana to take over the entire portion of the farm-holiday experience and agritourism business there are currently providing. This way, she can use her studies and classroom experience to better that side of the company. In addition, Alessandro should consider pursuing his hope to increase wine production and enter foreign markets. He has seen promising inquiries from American wine distributors, and this could help him get a foothold in the otherwise unforgiving American market. Alessandro should agree that these two segments of the company need to be run as separate enterprises.

They can share equal amounts of revenue, as long as each section owns up to their own side of the
bargain. With Christiana’s knowledge of agritourism, and her ability to grow that side of the company from the ground up, eventually being
able to charge more and more and increase prices, that side of the company will become a huge revenue attraction. In addition, with the
long-standing history of Alessandro and Italy’s wine making, along with their most recent rewarding year of production, the winery part of the company has the potential to expand and grow when the time is right in other markets, while it may not be in the Italian market.
Therefore, in conclusion, Podere Riosto should split in two. This would allow Christiana to run the agritourism and control the farm-
holiday experience she envisions, while Alessandro is able to pursue his vision of doubling wine production and entering new markets. This
way, growth may be slower in each section of the company, but when looked at as a whole, the growth will be steady, equal, and sustained,
allowing for continued success in the Galletti family.