ENTRY OF CHATEAU CAMARGUE INTO A FOREIGN MARKET
Chateau Camargue is a small winery company based in Avignon France. Due to rapid growth of the wine industry in India, Chateau Camargue is interested in expanding its market to international market by joining the Indian wine industry. This company is likely to face difficulties in the Indian wine market because of the change of business environment.
This company is likely to face market monopoly in India, which will hinder its entry into the market. About 90% of India`s wine market is controlled by three companies which use licenses and patents to prevent entry of new wine brand substitutes. These companies also control distribution and resources in the Indian market. In addition, the presence of a poor legal protection for foreign companies in India is likely to act as a market entry barrier. Chateau Camargue will be forced to assume and always use fair and effective dispute solving mechanisms for it to avoid making losses in the form of intellectual property rights. Bribery and corruption will also hinder its entry in that some key officials may demand some kind of payment to accelerate or allow a given transaction to proceed.
To overcome these barriers and reduce the financial difficulties, Chateau Camargue should partner or form an alliance with another smaller Indian wine company. This will provide ease market access and reduce the entry costs through sharing distribution routes and joint marketing efforts.
Chateau Camargue should not consider a long-term direct investment because it is not sure whether it will survive in the Indian market. Therefore, it should first take a short-term investment, which will give the company an opportunity to consider the certainty of its operations in the market before deciding whether to extend the period.