Digital Innovation For Vinomofo Online Wine Producing Company - An Essay.

Market Segmentation of Vinomofo

Discuss about the Digital Innovation for Vinomofo Online Wine Producing Company.

The strategy report depicts the market position and the current status of the company namely as VINOMOFO. VINOMOFO is a small to medium online wine producing businesses, headquartered in Sydney, Australia (vinomofo 2016). The enterprise serves Beer, Wine, etc all over Australia and New Zealand. The report will illustrate the market segmentation followed by the company that declines the sales and benefit of the company. Additionally, the online service provides by the organization is not up to the mark, therefore, certain IT based digital innovations are needed to be implemented by the company in order to reduce the financial issues occurring within the organization.

Beverage industry is the lowest rating industries in Australia. Goodman (2003) stated that, for Australian small to medium enterprises the time ripe, particularly in the service sectors with lower interest rates supporting economic activity. The market segmentation for any company always decides the future revenue. From the present challenges of Australia economy, it is presented that different opportunity for Small to medium enterprise to innovate and explore untapped opportunities in 2016 (Roos and O'Connor 2015). The company serves its products via outlets and online services but the younger consumers segment is placing less sales orders using their corporate website.

After analyzing the market segmentation of VINOMOFO, online wine distributing company it has been identified that, the segmentation is created based on demographic and geographic scenario of Australian food and beverage industry (Gilinsky, Forbes and Reed 2016).             Initially, the company did not serve its product offline but currently the younger consumers segment is placing less sales orders using the corporate website of the company. Thus they are thinking of opening certain outlets rather wine shop. The beverage industry is mostly dependent on the consumer age between15 - 30 but currently due to worldwide legal actions and people’s concern, the rate of online sale is declining rapidly. However, the organization wants to expand their business over the next five years up to 20% revenue throughout the world (Szolnoki et al. 2014). The segmentation process is under action and the current statistical sample says that the company targets the consumers coming from teenage group.

The VINOMOFO Report drop in revenue is in highly competitive conditions. In the financial year ending food and Beverage Company has reported sale decreases of 3.1 percent to $4,990 million (Chanaron 2013). The company also reported that the total beer spirits and wine volumes across both Australia and New Zealand declined 2.7 percent while volumes in VINOMOFO drinks declined 7.3 percent. The company firmly focuses on its brand value by implementing a range of efficiency measurement throughout the year and by decreasing the tax rate to 4.3 percent to $669 million.

Analysis of the Revenue Structure of Vinomofo

The company specializes in selling goods and services primarily using their website. However, currently the online demand is decreasing in a rapid manner (Beckett, Couchman and Vachhrajani 2013). Therefore, they are trying to incorporate innovative emerging digital technologies so that the revenue of the company starts growing. The diverse portfolio of the company produced across 34 sites and they collectively produces the revenue of around 46 billion each year.

Figure 1: Revenue structure of VINOMOFO

(Source: Szolnoki et al. 2014, pp-28)

Nowadays the digital technologies are connecting wine producers with the consumers in many new ways. Moreover it can be said that the world is changing from one company driven business to the consumers driven business (Mason and Gos 2015). This is possible by incorporating digital technologies with data analytics powering the transformation. Digital innovation is required in order to reduce the issues occurring in the wine industry. The wine production is becoming localized around the cities driven local food demand. With the help of real time signals digital technologies enables local markets to thrive the consumers market.

VINOMOFO is one of the famous companies in Australia but as the organization serves many products at a time thus the major problem that occurs is relevant to the service provided to the consumers of the products (Vlachvei et al. 2013). The company does not provide the facility of all time services but as the products of the company are famous, thus the consumers coming from different geographical boundary are demanding for the products of the company. From the current scenario it has been found that the company is adopting many digital services but all of them are not user friendly.

After analyzing different marketing scenario it has been found that the company should improve their digital aspects in order to achieve more number of consumers throughout. Not only this but also they must concentrate on the consumers engagement policies with the help of digital innovation (Anderson 2015). The suggestions on digital innovations are as followed:

1. They should incorporate 3D printers and employing it as a part of their recent developing products. With the help of the printers they would be able to turn their ideas in 3D developed models (Chong 2014). The usage of prototype is helpful as in this case the dummy model is used and all the experiments go through the dummy only.
2. Digitally they are implementing devising marketing campaigning order to develop their new launched products. They should also involve crowd sourcing platform so that the company would be able to gain various interpretation of their latest brand campaigning (Janaratne 2014). Apart from this, freestyle machines will help them to mix up different taste in a single drink to make a unique and flavored taste. The freestyle machine will also allow to present mass personalization.
3. Additionally, after launching a new product they company should use social sites to collect votes from the consumers to know that weather the consumers like the products to be launched or not.
4. They should also introduce new and innovative ideas and this could be possible if the consumers get an independent platform where they will be able to share their views with one another. 

Nowadays VINOMOFO is one of the most epic wine selling website, after implementing all the digital technologies the company has grown nearly about 352,000 of the most wine loving mofos in Australia (Gilinsky, Forbes and Reed 2016). VINOMOFO uses email marketing to spread their business throughout the world and sales their product with excellent quality of the product. In order to improve their business they are incorporating some additional key tools. They do write their company theme with the thought of a single person. On the other hand, they also believe in online campaigning (Mason and Gos 2015). The brand value of the company is growing at a large after implementing all the digital innovative ides within their online site.

Identification for Digital Innovation

Nevertheless, it has been found that as they only serves wine through online services thus, consumers coming from all over the world are still unable to avail their products. Now, VINOMOFO has turned in to a million dollar business (Anderson 2015). Currently the company has more than 40,000 members and number of staffs is about 120 and additionally, the rate of turnover is about $ 50 million from the revenue structure.

Recently VINOMOFO has made collaboration with Blue Sky (vinomofo 2016). As the company is forming collaboration along with another well known brand thus the amount of investment is also increasing accordingly and this will help to make more innovations within their online business (Chong 2014). From the survey report it has been observed that, the market price of the wine is lo less than any other brand. As the company serves online products thus the products are tax free. Online exchange return options were not available in the initial stage but currently, the consumers are getting options to return their brought products if they did not like it (Beckett, Couchman and Vachhrajani 2013). Apart from this, it is awarded in the year of 2014 as Australian largest fastest growing online businesses. The profitability to a run rate of more than $52 revenue, 40,000 plus the number of members working for the company 

Conclusion

The strategy report presented here is describing the current status of VENOMOFO. Being a business consultant it has been suggested that the company needs to implement certain digital innovations so they could be able to grow their business worldwide. The major reason of the market declining is the teenagers are place less online orders. According to the market trend, the some digital innovations are suggested in order to reduce the organizational issues. Thus, from the overall discussion it can be concluded that the digital innovation within the business can improve the overall business strategy as well as business structure. 

References

Anderson, K., 2015. How to return to growth? Lessons from previous wine cycles. Australian and New Zealand grapegrower and winemaker, (616), pp.33-38.

Beckett, R.C., Couchman, P.K. and Vachhrajani, H., 2013, December. Exploring the Social Dimensions of Innovation in Food Manufacturing SMEs. In ISPIM Innovation Symposium (p. 1). The International Society for Professional Innovation Management (ISPIM).

Chanaron, J.J., 2013. Innovative lifestyle: towards the life of future-an exploratory essay. Megatrend revija, 10(1), pp.63-82.

Chong, S., 2014. Business process management for SMEs: an exploratory study of implementation factors for the Australian wine industry. Journal of Information Systems and Small Business, 1(1-2), pp.41-58.

Gilinsky Jr, A., Forbes, S.L. and Reed, M.M., 2016. Writing cases to advance wine business research and pedagogy. Wine Economics and Policy.

Janaratneᵃ, N., 2014. A framework for improving innovation capability of SMEs to enhance competitiveness in the digital economy.

Janaratneᵃ, N., 2014. A framework for improving innovation capability of SMEs to enhance competitiveness in the digital economy.

Li, H., 2015. An examination of entrepreneurial oriented behaviours in the Australian wine industry regional clusters (Doctoral dissertation).

Mason, M.C. and Gos, L., 2015. THE WINE SECTOR IN THE DIGITAL ERA: AN EMPIRICAL EVALUATION OF E-COMMERCE IN FRIULI VENEZIA GIULIA (ITALY).

Roos, G. and O'Connor, A., 2015. Integrating Innovation: South Australian Entrepreneurship Systems and Strategies (p. 406). University of Adelaide Press.

Szolnoki, G., Taits, D., Hoffmann, C., Ludwig, R., Thach, L., Dolan, R., Goodman, S., Habel, C., Forbes, S., Marinelli, N. and Wilson, D., 2014, June. A cross-cultural comparison of social media usage in the wine business. In Proceedings of the 8th AWBR International Conference (pp. 28-30).

vinomofo, (2016). /. https://vinomofo.com/.

Vlachvei, A., Notta, O., Diotallevi, F. and Marchini, A., 2013. Web Marketing Strategies in Agro Food SMEs: Evidence from Greek and Italian Wine SMEs. E-Innovation for Sustainable Development of Rural Resources During Global Economic Crisis, p.199.