From Classroom to Boardroom is an ongoing series of interviews featuring in-depth conversations between CEIBS faculty and our industry-leading alumni.
In this instalment of the series, CEIBS Assistant Professor of Accounting Gianfranco Siciliano enjoyed a Zurich-to-Shanghai chat with MBA 2020 alumnus Francesco Cartoni to discuss the award-winning case that they completed together during his time at CEIBS, as well as how to effectively scale a family business and what international companies need to think about when entering China in 2024.
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Grape Expectations – Antigal Winery's fortunes rise
Professor Siciliano is well acquainted with Antigal, a prominent winery company in Argentina that is owned by Francesco and the rest of the Cartoni family. Two years ago, the professor was involved in writing a business case in cooperation with the family, entitled Antigal: Strategy and Successions Challenges in a Family-Owned Vineyard with Global Ambitions.
The case went on to win two awards, including first prize in the 2021 Global Contest for Best China-Focused Cases. Professor Siciliano started the interview by asking Francesco for a brief update on the current status of the company.
Francesco: The business case certainly helped Antigal gain more prominence and visibility. We recently won the new World Winery of the year award from the prestigious Wine Enthusiast magazine. This was very important for us; it's like being in the Ivy League of wine!
The professor then recapped how the business case had explored the entrepreneurial culture at Antigal, and the interplay between the undeniable passion and rising tensions within the family dynamic, as each member tried to help develop the best way forward for the company as it considered going global.
Prof. Siciliano: I remember how we talked about how to professionalise the corporate governance of Antigal, how to select the right shareholders for the future, and determine the right strategy to expand into the China market. So, based on the insights you developed from the case, have you put in place any formal practices of corporate governance since the business case was written?
Francesco: We've undergone many changes as a company. My sister has gone to pursue an MBA at Columbia University, and we've brought in a new CEO and board of directors. This has certainly formalised the company, and they are helping us form better strategies and decision-making capabilities for the future direction of Antigal. And, of course, the new CEO brings a wealth of experience that he's applied to our finances, operations, the general systems and management of the vineyards. I'm hoping that when my sister Alessandra finishes her MBA, she will come back to a company that works like a Swiss watch!
02
Converting classroom lessons into real-life business approaches
In discussing the company's entry to the China market, Professor Siciliano asked how Francesco and the rest of the Antigal leadership team formed their China strategy at a time when social and geopolitical uncertainty was on the rise.
Francesco: Everything we did in preparation for entering the China market reinforced and legitimised what I had learned in my MBA. Most importantly, your strategy for each specific market needs to be aligned with your wider goals. It's good to have ambitions, but they must be aligned with realistic expectations regarding actual market conditions. We live in a world where markets change so quickly, so you need to be on the ground to see what is happening. I've lived in China for many years, and I come back 3-4 times a year, talking to clients and ensuring that our goals remain viable as circumstances change.
Francesco went on to describe his MBA studies and the business case as being essential for bringing together the overall form and detailed structure of Antigal's China entry and continued operational strategy. From mapping the addressable market size and conditions, to competitor profiles, key customer segments and more, the process helped lay the foundations for the company's initial and continued success in one of the world's biggest and most dynamic markets.
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Final thoughts: How does Europe view China as a market in 2024?
In their closing exchange, Francesco asked Professor Siciliano for his opinion on how the competitive landscape has shifted in China, specifically regarding the current attitude of larger European companies when they look towards the China market.
Prof. Siciliano: At the macro level, European companies still consider the China market a great source of opportunity. In the 2023 European Chamber of Commerce in China survey, more than half of the companies that are members of the chamber experienced an annual growth of more than 5% during the period 2016-2023. One in seven of these companies grew by 20%.
However, the professor also pointed out the downsides for European companies operating in China, citing the rise of various geopolitical-based risks and uncertainties of recent years. He referred back to the survey, revealing that 11% of the members of the European Chamber of Commerce in China have decided to delocalise from one or several Asian countries, to improve their resilience and better manage their exposure to risk.
Focusing more specifically on the winery business in China, the professor then laid out some of the key considerations for European companies looking to either enter the China market or deepen their presence there.
Prof. Siciliano: There are four important things to consider from a strategic point of view. First, Chinese consumers are increasingly eager to enter into direct contact with foreign wine producers. Second, it's important to concentrate more on quality than quantity of sales. Lots of low-quality wines from overseas producers have dried up in recent years, as domestic producers find it easier to compete. Third, marketing, branding, and broader commercial strategy is becoming more important in China, to differentiate your wine brand from the growing competition. Fourth, collaboration between smaller wineries is a worthwhile consideration to diversify your overall product offering while at the same time reducing your risk.
We want to wish Francesco and the rest of the Cartoni family the best of luck with their continued globalisation efforts, as they take the Antigal brand from strength to strength. Look out for new insights from other dynamic business leaders in the next episode of From Classroom to Boardroom.
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