aem_241_component_1_final_Essay - Company Description...

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Company Description Introduction Rusty Red is a wine business founded by Mr. Joe Lizzio, a 1988 Cornell alumni and former Cornell Lacrosse player. Mr. Lizzio founded Rusty Red in 2008 when he began importing wine from his vineyard in Italy. Because of his interest in lacrosse and philanthropy, he decided to found an organization in which he could contribute the proceeds from his wine sales to providing scholarships for student athletes. The name Rusty Red comes from the name of Mr. Lizzio’s 33+ lacrosse team, composed of former Cornell lacrosse players. “Red” refers to Cornell’s mascot “Big Red”, and “Rusty” refers to the older age of the men on the team. Rusty Red wine is a red wine made from Sangiovese grapes, a variety of Italian grapes originating from Tuscany. Rusty Red wine contains 13.5% alcohol by volume and is sold in 750ml bottles. Rusty Red comes in two varieties: regular and reserve. The reserve is slightly higher quality than the regular. Rusty Red wine provides multiple benefits. The proceeds from the sale of the wine contribute directly to providing scholarships for student athletes. Additionally, the wine itself provides a great tasting beverage and also contributes to the socialization of various alumni, and others involved with the foundation. However, another important benefit Rusty Red provides its customers is a sense of prestige and a perceived connection with a prestigious social network. Currently, Rusty Red is a question mark in terms of both its wine and its scholarship fund (see fig 1.). The company has low market share within the wine selling industry compared to major wine and alcoholic beverage companies, such as Constellation Brands, which currently offers a large assortment of wine and alcoholic beverages and showed sales revenues of $3,843.4 million within its wine division in 2007, according to a Datamonitor report. The company also Page | 1
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has low market share in terms of its cause related marketing efforts, in which it faces competition from major CRM companies like Ben and Jerry’s. However, the markets for both wine and CRM have experienced high growth rates in recent years. When a company is faced with a strategic business unit (SBU) that it deems a question mark, it essentially has two options; it can either invest additional resources into the SBU in hopes of capturing market share, or it can divest. In the case of Rusty Red, Joe’s personal dedication to the company makes investing the most apparent option at this time. Rusty Red’s core problems at this stage include establishing brand awareness, devising a system of ordering and distribution, and developing a pricing strategy. The focus is on spreading the word about the wine and the foundation. Market Summary
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This essay was uploaded on 02/20/2009 for the course AEM 241 taught by Professor Grossman during the Spring '08 term at Cornell.

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aem_241_component_1_final_Essay - Company Description...

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