The Montana Wines — Seagrams Chateau Strategic Alliance

The US wine market is one of the most heavily regulated in the world with government regulation requiring exporters to go through a three tier distribution system. Coupled with geographic fragmentation, high transportation costs, and a significant degree of uncertainty, this represents a significant barrier to entry for small producers. As the wine market becomes more and more competitive, the ability to enter the world's second wealthiest wine market will be critical to continued market success. One way of circumventing market entry barriers and complying with government regulation is the formation of a strategic alliance with a home country distributor. This paper presents a case study in how one company, Montana Wines of New Zealand, formed an alliance with Seagrams Chateau in the US. The secret to success is to find the right fit between the philosophies and culture of each partner.