In order to compensate for recent disappointing earnings and falling stock price, Robert Mondavi Company needs to make several changes to its business and marketing strategy. The flattening of jug wine sales has caused many high-volume wine producers to venture into the popular premium to ultra-premium wine market, penetrating Mondavi's market share. This is an area in which Mondavi is traditionally strong, with its popular premium brand, Woodbridge, accounting for 60% of its net sales in 1998. The phylloxera outbreak of the late 1980s in the early 1990s also significantly harmed Mondavi's ability to compete due to grape shortages. Although the barriers to entry into the wine industry as a whole are high due to the time, land, resources and other capital investments required, the barriers to entry into the winemaking segments are high. range are not necessarily as high for companies that are already active. in the wine sector. Therefore, the company must focus on sustainable and creative improvements in order to survive in an industry where competition is fierce and the number of substitutes is large. Several strategies, which can be exercised exclusively or jointly, can give Mondavi the necessary advantage to consolidate and reinvent its position as one of the leaders in the wine industry. The first strategy to undertake is that of diversification of the wine segment. Some of Mondavi's actions mean that they have attempted this to some extent in the past - Mondavi's introduction of coastal wines to help penetrate the lower end of the super premium segment and its joint venture which produced the popular brands and super premium Caliterra. However, most of Mondavi's brands still fall into the ultra-premium and high-end luxury wine segments. We propose that Mondavi diversify more aggressively into the popular premium wine segment. They should be able to take what they learned with Woodbridge, a popular and very popular high-end brand, and introduce other brands to that level. Because Mondavi prides itself on being one of the highest quality winemakers, this strategic decision must be approached delicately to avoid tarnishing Mondavi's high-quality reputation and prestigious name with the introduction of low-cost wines. price. Mondavi could follow the tactics used by E&J Gallo Winery to enter the premium wine segment. E & J GALLO has removed or reduced its name on some of its new premium products in an attempt to reduce consumer association between premium brands and E & J Gallo's legendary pitcher wines..