Business Strategy - Carlsberg in Cyprus

BUSINESS STRATEGY

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Carlsberg in Cyprus
Companies in the modern day business environment are facing many kinds of challenges.
These challenges have impact on the way an organisation is dealing with its strategic affairs.
There are major strategic factors that have impacted upon the business of the company in the
last few years. It is critical that companies understand the level of their impact and work
accordingly to manage the skills and other resources so that in the long term their growth is
not hampered. Future strategies need to be developed on the basis of the current strategies
used by the firm. A company must have long term plan to identify the needs of the coming
future and the way in which they will evolve in the future. Carlsberg is a global brewery
company which was established back in the year 1847. In the year 1967 this company was
granted the license to produce Carlsberg beer in Cyprus. This was the first nation where this
company produced its beer outside Denmark (Photiadesgroup, 2020). This essay will discuss
the major strategic forces that have impacted the business in the past 2-3 years. It will also
illustrate the current strategy pursued by the firm along with the ways in which they need to
evolve in the future.
Carlsberg in the current time had faced lots of challenges especially in terms of the
competitive environment they are facing in the countries like Cyprus. Cyprus developing
itself as a tourist destination and hence the market of brewery is going to expand in the
coming years. However in the past 2-3 years the dynamics have changed and this change in
the dynamics has impacted the business of the company. It can be seen that in the coming
years there had been changes in the competitive environment all across the globe. This is true
in terms of the fact that in the past 2-3 years there had been increment in the competitors that
are from different parts of the world. It is due to this that the sales growth especially in the
beer product has reduced considerably especially when it comes to Cyprus however the total
growth of the profit is not impacted by it. This increase in the competition has direct impact
on the amount of marketing that is done in the market. It is seen that the expenditure on the
marketing of beer products had impact on the prices of the products (DeSalle and Wynne,
2019). Since due to competition companies like Carlsberg are unable to raise the prices as
much as they want hence it has become critical for them to downsize the product quantity that
they are offering. This is done by redesigning the packaging mechanism of the company.

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It is seen that in the last few years the refugee situation in the region has increased especially
in the time when the European economy is already seeing a downfall. This has resulted in
company finding new sources of investment for them. At the same time even the markets
where the consumer purchase cycle for the brewery products were higher, there is decrease in
the sales (Masouras, Komodromos and Papademetriou, 2019). In Cyprus also there is
decrease in the growth of the traditional sectors which had impact on the product’s sale. The
economy is acting as a major strategic force that is acting as a challenge for the company in
past few years. The marketing expenses have increased and this has caused challenges for the
finances within the company (Skordou and Sergiou, 2017). At the same time there is an
increase in the taxation on the production and sales of the alcoholic products and this is
creating a challenge for the company especially in terms of selling products at lower cost.
This is why organisations have to reduce the operational cost. The trade war between China
and United States has impact on the business of many brewery firms. As China is one of the
biggest markets for the Carlsberg hence this trade war has negative impact on their growth
hence showing the impact on the production of the beer in the Cyprus.
The social dynamics have also changed in terms of the fact that there are large numbers of
young people that are coming up which is the major target segment for the company.
However it is to be understood that in the past two or three years there had been increase in
the health related concerns of the people. It is due to this that people are going away from the
alcoholic products. This is creating negative environment for the company’s growth
(Gammelgaard and Hobdari, 2013). This company controls 53% of the market share in the
Cyprus hence negative environment in the sales will have impact on the growth of the
company.
The environmental concerns also have impact on the quality of the raw materials that are
used in the organisation. The grape quality has decreased due to the climate change. This
company is working on developing hybrid quality crops whose quality and production does
not get degraded due to the climate change. However this challenge is going to increase in the
coming time. Company had to seriously think on packaging especially in terms of utilisation
of single use plastics (Buckley and Ghauri, 2015).
Strategic factors such as technology also have impact on the development of the industry.
This can be understood in terms of the fact that there are highly advanced technologies that is
being used in the firms and the cost of these technology is very high. It is due to this there is