Alternative n. 1: Use the practice of arbitrage in the global market to further compete in growing market segmentsIt is easy to understand why Mondavi is primarily involved in the domestic market, with a limited number of selected partnerships and limited involvement with other wineries in several foreign markets. The company has always considered itself a family-owned business with an emphasis on high-end quality and has sought to partner with like-voiced companies operating with similar motivations. The partnerships are almost all in the ultra-premium and premium luxury segments, such as Opus One's highly prestigious offering, the minority interest in Italy's Ornellaia and the Frescobaldi partnership which produced three other high-end wines in Montalcino, in Italy. Among all their partnerships, only the Chilean joint venture produced an offering for the increasingly popular premium segment, with a Caliterra brand that sold 25% of the product in the United States. Compared to the sector as a whole, Mondavi does not respond to constantly changing market demands and demands. While there has been some growth in the premium ultra and luxury market segments, the explosion over the past 15 years has occurred in the popular premium ($3-7 a bottle) and super-premium ($7-14) sectors. Mondavi's Woodbridge offering was responsible for 76 percent of case volume and 57 percent of revenue in 2001, but it seemingly exists in isolation amid all of the company's high-end offerings. Competitors who have established themselves in the bulk wine, beer and other spirits business are taking advantage of their sales volume and migrating upmarket. While E&J Gallo, Constellation and the brewers may not have the reputation for quality and craftsmanship that RMW does, their significant financial clout has allowed them to develop or purchase brands that could compete at higher altitudes and price segments. Meanwhile, competitors with similar histories in premium winemaking are taking advantage of lower production costs to integrate horizontally, acquire land and build new wineries in several countries, as Kendall Jackson has done with Villa Arceno (Italy) and Yangarra Park wines ( Australia). .Michael Mondavi explained the difference between RMW's style and that of Kendall Jackson by stating: “Our philosophy is to work with local partners. Jess's thing is to go to the country, buy land... we're not smart enough to do what Jess is doing." (It's amazing to imagine what we would think if we had seen a similar comment from the CEO of a typewriter company in the 1970s, while IBM and HP were trying to develop PCs!) It may be time to rethink that adaptation philosophy local..