Carlsberg in Emerging Markets

This paper looks at the international strategy used by Carlsberg group in its emerging markets with a focus on Russia and China as well as a minor look into the Indian market. The paper illustrates the various tool that is used to analyze the market for the purpose of identifying its current strategic position in its emerging markets. Finally, various recommendations are given in this paper that would improve Carlsberg dominance in these emerging markets over its competitors.

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Carlsberg in emerging markets 2
EXECUTIVE SUMMARY
The world today is changing very rapidly. Opportunities arise and disappear instantly and it is
therefore important for modern companies to follow suit and seize the opportunities present for
them at the time. In this context the strategy of a company becomes relevant. Companies develop
strategies to ensure that the employees know what to achieve and are working towards the same
goals. As the speed of changes and information increase in the world, it becomes important for a
company to be able to react fast and adapt their strategy, especially in emerging markets. This
paper looks at the international strategy used by Carlsberg group in its emerging markets with a
focus on Russia and China as well as a minor look into the Indian market. The Group is
distinguished by a high degree of variety of brands, markets, and cultures. Its activities are
centered on markets where the Group has the strength and the right products to secure a leading
position. Due to the variation of the markets, the contribution to growth, earnings, and
development within the Group differs, both at present and in the longer-term projections
(Lasserre 2017). Carlsberg has it owns organization to target, mission, and vision. The mission of
Carlsberg Company is to be a dynamic provider of quality beers and also bring its exciting
brand, innovative culture and committed teams which will bring people together and add more
enjoyment to life.
Furthermore, their company's vision is "probably the leading the beer company among the
world" in order to become the first choice of the consumers, customers, and employees and also
by fully understanding their needs and proactively driving market development. Achieving its
mission and vision objective will be met with many challenges mostly originating from a
saturated market with increased competitiveness, especially since many beer firms are emerging
and targeting emerging markets

Carlsberg in emerging markets 3
These markets are filled with numerous opportunities for the firm to expand into and develop,
however, there are volatile as well since its competitors want a piece of the market share. The
paper has described the current strategy that is used by Carlsberg in these emerging markets. To
put this into perspective, it has gone deeper by looking at the firms vertical and horizontal
integration for the purpose of accomplishing its goals and staying on track through its mission
and vision. The paper illustrates the various tool that is used to analyze the market for the
purpose of identifying its current strategic position in its emerging markets. These tools are
crucial since they play a big role in the firm's overall international strategy. Such strategies
include mergers and acquisitions of strategic breweries such as Baltika which was Russia biggest
beer brand with over 50% market share. Finally, various recommendations are given in this
paper that would improve Carlsberg dominance in these emerging markets over its competitors

Carlsberg in emerging markets 4
Table of Contents
CARLSBERG IN EMERGING MARKETS..................................................................................3
INTRODUCTION...........................................................................................................................3
Carlsberg’s current strategy.............................................................................................................4
Vertical integration......................................................................................................................5
Horizontal integration..................................................................................................................6
The Porter's Five Forces..............................................................................................................6
SWOT analysis of China market.................................................................................................7
SWOT analysis of the Russian market........................................................................................8
Impact of Market analysis tools on Carlsberg’s international strategy.......................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

Carlsberg in emerging markets 5
CARLSBERG IN EMERGING MARKETS
INTRODUCTION
According to WHO (2014) beer is the globe’s most broadly consumed drink, and is the third-
most famous drink generally speaking, after water and tea, this will pull in the development of
numerous organizations into this market be that as it may, among the most prominent ones is the
Carlsberg mark. Moreover, Carlsberg has its home office in Valby in Copenhagen, Denmark.
Carlsberg brew portfolio fuses more than 500 brands and they vacillate out and out in term of
volume, esteem, target swarm, and geographic passage. The Group is recognized by a high level
of assortment of brands, markets, and societies. Its exercises are focused on business sectors
where the Group has the quality and the correct items to secure a main position. Because of the
variety of the business sectors, the commitment to development, profit, and advancement inside
the Group contrasts, both at show and in the more drawn out term projections (Lasserre 2017).
Carlsberg has it owns organization target, mission and vision. The mission of Carlsberg
Company is to be a dynamic provider of quality beers and also bring its exciting brand,
innovative culture and committed teams which will brings people together and add more
enjoyment in life. Furthermore, their company's vision is "probably the leading the beer company
among the world" in order to become the first choice of the consumers, customers and
employees and also by fully understanding their needs and proactively driving market
development. Achieving its mission and vision objective will be met with many challenges
mostly originating form a saturated market with increased competitiveness, especially since
many beer firms are emerging and targeting emerging markets. Therefore, the firm had to
incorporate an international strategy that would assist it in meeting its objectives, penetrating and
maintaining a significant market share in the emerging marketsHowever, emerging markets may

Carlsberg in emerging markets 6
be lucrative but requires a good international strategy for penetrating and domination these
markets. Therefore, this paper will discuss the emerging markets on a perspective of the
Carlsberg group international strategy in its emerging markets
Carlsberg’s current strategy
Today the general procedure for the Carlsberg Group is development and to end up critical in the
business sectors they are in, though the organization subdivision in Western Europe needs to
make esteem and increment proficiency (Hansen et al 2010). This ought to be done through
fortifying their brands, being imaginative and extending their portfolio. Productivity can be
enhanced through the execution of the Excellence program and system streamlining
(Radulescu ,Ioan and Bran 2015). Because of the development technique, Carlsberg is looking
out for little distilleries to procure or converge with, since this may enable them to pick up piece
of the pie or give them a key position in that specific market. After the takeover of S&N,
Carlsberg has full responsibility for which gives them a solid position in the Eastern European
market. Despite the fact that development through obtaining and mergers is an essential
technique for Carlsberg, they won't have the capacity to make extensive interests in these
exercises soon as they have a vast obligation after the securing of 50 % of S&N. However
Carlsberg has conveyed the utilization of vertical and level combination in its present
methodology There are various thought processes that may assume a part in the mix movement.
What is viewed as the most broad intention is that the buying firm views the procurement as a
beneficial speculation. Mergers are regularly likewise thought of as an elective type of venture.
Firms will make acquisitions when it is the most beneficial methods for upgrading limit,
acquiring new learning or abilities, entering new item or topographical zones, or reallocating

Carlsberg in emerging markets 7
resources into the control of the best supervisors or proprietors. Another perspective of choices to
blend is that it is a piece of a more extensive vital arrangement went for situating the firm to
accomplish some long haul objectives. For Carlsberg's situation it is a piece of their procedure to
extend so for their situation it is clearly a piece of a vital arrangement to develop and wind up
bigger. basic for meeting targets and objectives in its developing markets (Kotabe and Helsen
2014). Besides, Carlsberg likewise conveys fundamental instruments that are utilized as a part of
making a showcasing investigation which is the swot examination. This instrument will
delineates a reasonable portrayal of the Russian and Chinese market on a Carlsberg point of view
which later constrained the firm to enhance their procedures in overwhelming the market
Vertical integration
Vertical integration are combinations in the vertical channel. A firm can make or purchase in
various phases of the channel. A vertical merger would in this way be between e.g. a provider
and a maker or a producer and a distributer. A few organizations control every one of the
exercises in their esteem chain, while others control next to no and purchase in a great deal of
administrations and parts. As indicated by the Economic Times (2016), one reason why firms
blend vertically could be that they need selective rights to the provisions, conveyance channel
and so on or that the organizations have a few cooperative energies they will have the capacity to
use. In connection to this, Carlsberg can think about coordinating advances or in reverse. Their
provisions comprise essentially of crude materials and bundling, containers and jars. Crude
materials are provided by numerous and are purchased at a market value which is kept around
solid rivalry in the rising markets(Howard 2014). This won't be less demanding, less expensive

Carlsberg in emerging markets 8
or more effective to deliver inside than to get it. Crude materials are not separated items that
Carlsberg needs selective rights to either. In connection to the provisions of jugs there are just a
few providers. Carlsberg have the likelihood to change between providers to get a decent cost,
however the providers additionally need ability to cover the greater part of Carlsberg's needs and
requests. Carlsberg may have the capacity to incorporate in reverse in the store network and
purchase up the providers of these items. In these years however, Carlsberg is offering out the
parts of the business that are not identified with their center business of delivering lager, so they
will most likely not be slanted to procure totally new zones of business (Schmid 2014).This
joining has figured out how to help Carlsberg to accomplish its objectives and destinations
particularly in the Russia and Indian market where they have possessed the capacity to set that
market costs at reasonable rates because of their adaptable inventory network
Horizontal integration
According to Buckley and Ghauri (2015) horizontal mergers are performed between
organizations in a similar industry at a similar even level. The key purposes behind even mergers
are to pick up piece of the overall industry, increment advertise power and productivity and use
cooperative energies between the organizations. Among these cooperative energies we discover
economies of scale and extension and gaining integral qualities, for example, inventive or
showcasing abilities. Firms that take part in level combination principally center around
increment underway of merchandise and administration which in Carlsberg case is
predominantly through acquisitions and mergers in developing markets (Bekaert and Harvey
2017). The organizations make and opportunity in procuring real distilleries that have the biggest
piece of the pie in various locales, for example, China and Russia and supply their items through
them which is proficient in commanding these business sectors

Carlsberg in emerging markets 9
The Porter's Five Forces
Competitive Rivalry-beer is the most popular drink after tea and water, this attracts many firs to
emerging and tap the high demand for the product. This mostly applies in the emerging markets
where there is full of potential.
Supplier power- the price of raw materials will in ost cases depict the product prices, this gives
the suppliers a bargaining power unless there are numerous supplies of the same commodity.
Carlsberg has flexible supplier choice due to the availability of numerous suppliers all .
Buyer power-consumer power is significant to the success of the firms in these emerging
markets. This is adamant in emerging markets such as china and Russia where they consumers
have a significant buying power on Carlsberg as there are many alternatives in the market
Threat of Substitution. – The Substitutes for beer are wines and spirits. Carlsberg faces a major
challenge in emerging markets where consumers may have variety of products to choose from
depending on their taste and preferences which changes from time to time (Madsen and Wu
2016).
The threat of New Entry-emerging markets is lucrative with many opportunities of explore. This
attracts many beer companies into such markets such china which is the largest developing
emerging market. Chances of monopolizing such markets are very minimal which prompts
Carlsberg in improving is products, strategic mergers and capturing strategic regions in these
emerging markets that can be lucrative(Gammelgaard 2015).

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SWOT analysis of China market
Strength-There are market opportunities that are untapped in western parts of China. However,
China itself is still a developing market which means untapped opportunities are available in the
country. The large population offers the largest beer market in terms of size
Weaknesses-South eastern part of China has already been dominated by local breweries, increase
likening to locally produced products which creates a higher barrier to entry. Requires unlimited
resources to meet the large population demands and preferences
opportunities-the increase of a segment of consumers who need premium products, which offers
expansion into the central and southern regions of China
Threats-stiff competition form domestic and local brewers, lack of a strategic brewer or pattern
in the region
SWOT analysis of the Russian market
Strength-it is current beer market leader with strong brand image and brand awareness as well as
efficient distribution channels. The acquisition of Baltika which was a dominant brand in the
beer market with close to 40%.
Weaknesses-financial difficulties since the failure on the merger of Norwegian Orkla ASA
putting the firms into a financial debt impairing its growth and development
Opportunities -taxes imposed on vodka which has led to increase in the price of vodka
improving sales for beer firms. A boom in the beer market trend in the eastern parts of Europe
and Asian markets influence the Russian beer market as well (Pogorletskiy 2016)

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Threats-Increased competitive strategy by its main competitor Heineken which acquired the five
breweries in Russia making it the third largest firm in the market. Increase in taxation and an
anti-alcoholism campaign will lead to a reduction in beer consumption
Impact of Market analysis tools on Carlsberg’s international strategy
Emerging markets are very lucrative due to the availability of untapped potential where
international firms can expand and develop in these markets. Carlsberg’s emerging markets are
mainly Russia and China. However, these markets are very volatile and a single mistake would
cost an entire firm success in developing in merging markets. Therefore, Carlberg had to
strategize for a successful dominance of the market. Merger and acquisitions strategy is now
widely used by the firms in achieving its objectives in these markets. This strategy has been
efficient since the firm has been identifying breweries that have the greatest market share and
merge with or acquire them to gain a competitive advantage over its competitors, good example
is the acquisition of Baltika beer which was one of the major consumed beer products in Russia
(Nemtsov 2016). This made the firm acquire all its prospective consumers to its brand increasing
sales and revenue from the acquisition as well as its brand awareness. Moreover, the company is
able to learn from experiences in such foreign markets such as Russia where is having a few
setbacks which will be essential in penetrating other emerging markets such as India (Sinkovics
et al 2014). Carlsberg has also deployed product and price diversification to counter dominance
of local products in emerging markets which have a home advantage. The china market has over
200 local breweries due to the fact that chines consumers are more reluctant in consuming
foreign beer to the local brewed products. This is influenced by price where foreign products
tend to be expensive due to incorporation of taxes, moreover local beer tend to relate with the

Carlsberg in emerging markets 12
local culture this has led to product and price diversification to counter these setbacks and
increase market share in the emerging markets (Mcpheat, 2010).
Conclusion
Much has occurred for Carlsberg amid the most recent year regarding development and
advancement of the organization. It appears that they have been fruitful in their technique to
develop and extend. With the development of the organization and the adjustments in the earth,
both as far as contenders and the current money related circumstance, it is essential for Carlsberg
to have the capacity to adjust and build up a procedure that empower them to perform well in the
developing business sector. This is vital as the market is stagnating, yet it has turned out to be
significantly more essential with the current money related emergency and their expansive
obligation. In the short run, it appears to be vital that Carlsberg tries to build their income and
diminish their obligation however much as could be expected, to guarantee that they are seen as
a decent speculation for both present and potential investors (Pogorletskiy 2016). This is likewise
crucial for Carlsberg to achieve their key goal of further development and extensions. In the long
haul, Carlsberg should endeavor to utilize their solid and gainful position in their present markets
to develop and acquaint new items with the business sectors. In two or three years, the money
related market is probably going to wind up more steady and customers will probably purchase
premium brew items than today and this is an open door that Carlsberg can exploit (Jin 2017).
Development has dependably been imperative for Carlsberg and now that time and inclinations
change quicker than at any other time, this is a capacity that can enable them to keep up their
situation in the market.

Carlsberg in emerging markets 13
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