Entering new and unexplored markets

: the Garrafeira Soares case

Abstract

The beverage distribution market is very peculiar in Portugal, highly concentrated and ruthless when it comes to margins. After the 2007 market crash, the Portuguese beverage segment faced a couple of difficult years which meant that only the strongest and more adaptable companies survived. Amongst them was Garrafeira Soares, a company founded in 1983 that leads the market in the Algarve region, an area better-known for its tourism and hospitality market. This dissertation addresses an interesting national expansion phase that Garrafeira Soares went through in order to grow the business. The beverage distribution market is uncharacteristic in the sense that the market is fragmented in three regions (north, centre and south) that don’t compete with one another. Garrafeira Soares has the benefit of detaining distribution exclusivity (some on the Algarve and some nationally) on international brands, where they can enjoy better margins, and of having a sister company called Herdade da Malhadinha Nova, an internationally renowned Enotourism and producer of high quality wines. At its core, the case study revolves around a conflict of interest between both Garrafeira Soares and Herdade da Malhadinha Nova. In order for Garrafeira Soares to grow the business and expand nationally, it must find a strategic standpoint to avoid clashing with the already established distribution network of Herdade da Malhadinha Nova. The focus of this case study is the way Garrafeira Soares should grow and how can both companies benefit from one another. Growing from 27.000.000€ sales from 2013 to a little bit over 31.000.000€ sales from 2014 by only operating in the Algarve market, Garrafeira Soares believes that they have what it takes to be an international reference in the market. This dissertation starts by introducing readers with a Case Study that addresses the firm’s challenges, a Literature Review which provides evidence of past research and studies on related concepts and finishes with a Teaching Note offering a personal analysis on the case.

Date of Award	2015
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Nuno Magalhães Guedes (Supervisor)