Fall Old Winery
Description of the initial situation
You inherited a winery from your grandfather, the Old Winery GmbH, which has been in the family for five generations and can be dated back to the 16th century.
On the eleven hectares of Old WineryGmbH, half white and half red grapes are grown conventionally, i.e. not organically operated and certified, with the vine stock being in good condition in terms of age and care. All in all, the entire harvest is made into wine and sold.
Her grandfather, who himself did not want to change the image of the winery, left the management and administration to a young, dynamic winemaker, who is the manager of Old Winery GmbH. Due to the little-known image of the winery, the current demand for the self-produced wine is not particularly high.
Since you know little about viticulture, you do not want to manage the winery operationally. You are now faced with the decision of either selling the winery or investing in the company to make it better known.
task
The case is divided into three sub-tasks: The aim of the first sub-task (task 1) is to create ideas for developing an image and marketing strategy in order to increase sales and awareness of the wine brand. The decision was made to produce a higher-priced wine for "Generation Y",
i.e. individuals in their late 20s and early 30s to produce and sell.
In the second part of the task (Task 2), the value of the company should be calculated after the marketing strategy has been successfully implemented. Due to the successful positioning of the wine brand among "Generation Y", sales are constantly increasing every year.
After a few successful years, a competitor approached you and would like to acquire Old Winery GmbH because of its success.
In the third part of the task (Task 3), contractual points should be worked out that should be included in an assignment contract in the course of the sale of Old Winery GmbH.
additional information
• The winery produces grapes for approximately 82,500 liters of wine, which corresponds to 110,000 0.75 liter bottles.
• The average selling price of the wine bottles is €10.00.
• The annual sales growth rate after the successfully implemented marketing strategy is 5% and the sales surplus rate is 8% (% rate of sales available for investment).
• The company has an annual net investment in fixed assets of 14% and an annual net investment in current assets of 22%.
• The WACC is 5%, the income tax rate is 25% and the value of non-operating assets is €20,000.00.
• "Generation Y" attaches particular importance to individual contact with new people
Media, authentic representation of the company, appealing presentation of the product and sustainable production.
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