Competitive Strategy for Carlsberg Group: International Expansion Strategies for Russia and China

This paper discusses the international expansion strategies of Carlsberg Group, a leading player in the brewery industry, focusing on their strategies for entering the Russian and Chinese markets. It also covers the overview of the organization, value creation, innovation strategy, and barriers to entry.

Running head: COMPETITIVE STRATEGY
Competitive Strategy
Name of the Student
Name of the University
Author Note

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Executive summary
The purpose of the following paper is to determine the international strategies. The chosen
organization for this paper is Carlsberg i.e. the leading player in the brewery industry. The
current condition of the brewery industry and the market position of the company have been
provided. The overview of the company has been given in this paper as well. Apart from that, the
different strategies of the company while trying to enter Russia and China has been discussed
here as well. Other issues like the barriers to the entry of the organization have been discussed
here in this paper as well. The ways the organization could cope up with the problems and make
the best utilization of the opportunities have been discussed here properly. These things will help
the organization to be successful in the competitive business environment.

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Table of Contents
Introduction......................................................................................................................................3
Overview of the organization..........................................................................................................3
The international strategy................................................................................................................4
Value creation..................................................................................................................................6
Innovation strategy..........................................................................................................................6
International strategies for Russia...................................................................................................7
International strategies for China.....................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
The following report will describe upon several issues on the expansion of the
multinational companies into the different countries. The importance of taking the several
international strategies is very much important since the organizations will always look to focus
on the various issues while opting for their strategies. The expansion of the organizations will
depend upon the various strategies that they will follow. There are various international
strategies that could be followed by the different types of the organizations in the several
industries (Hitt, et al., 2016).
These strategies are based on the various things like the cultures of the regions and the
mindset of the employees in the various ways. The competition in the global market is immense
so all the organizations will try to provide the best offers, products and services to their
customers. These services should be provided based on the customer profiles of the areas in
which they are operating. However, the chosen organization for this paper is Carlsberg. The
various business strategies that the company has opted will be discussed(Hitt, et al., 2016). They
provide their services to different countries and it is very integral to adopt the best strategies for
the international expansion of the organization.
Overview of the organization
The organization that has been chosen in this paper is Carlsberg group. The company is
considered to be the global brewer. It was established in the year 1847 (Carlsberggroup.com
2018).The company operates in the beverages industry and it has a worldwide reputation in this
industry as well. The headquarters of the organization is located at Copenhagen in Denmark. The
various products that the organization provides are beers, ciders, soft drinks and the bottled

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water. The brands of beers and ciders the company provides are the Tuborg, Kronenbourg 1664,
Baltika, Grimbergen and Somersby. The total number of the Carlsberg Group is more than
40,000 (Carlsberggroup.com 2018). The company provides their services mainly in Western and
Eastern Europe and Asia. The various strategies they have taken to cater to their international
expansion will be discussed in the following section (Collis, , 2014)
The international strategy
The adoption of the international strategies has been one very important matter in the
case of Carlsberg. The organization will look to enter the new markets besides providing their
services to the areas that they already are the market leaders (Collis, , 2014).The financial
expansion is very much important as well as catering to the needs of the customers of the
organization. It has been found through the proper research of the experts that the main markets
of the Carlsberg group had existed in the Western part of Europe. This is where they would
provide their customers with the regional brands like Tuborg, Baltika and Holsten. The various
local brands also produced their items under the label of Carlsberg.The company had targeted the
Eastern European market and the Asian market in the countries like Russia and China (Kotabe &
Helsen, 2014)
It has been reported that the main feature of the global brewery industry depended on the
intense consolidation process of the elements. The global brewery industry had faced a huge
setback since the customers’ habits of the beer drinking began to change and the production costs
also began to rise as well (Collis, , 2014)This had made the life of the beer producing companies
to be much tough since the organizations faced a tough competition from the various new market
competitors. The merger process saw Carlsberg buy a large portion of the shares from Orkla. It is

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because Orkla had around 50% of the ownership in the Baltic Beverages Holdings (BBH). This
could give Carlsberg the option to make their position stronger in the brewery market indeed.
However, in the recent times, it has been seen that the company has put much stress on the
Indian market as well (Kotabe & Helsen, 2014)This will be very much important for the
organization since they would look to expand into Asia and capture a huge market share. The
company would be highly benefitted if they captured the booming Asian market and catered to
the desires of the company in the best ways. They would be able to acquire the higher revenues
as well (Buckley, 2015). One important barrier that Carlsberg had been facing in the traditional
American and European markets is that of the growing health consciousness of the people. The
people are much cautious about the diseases that alcohol can cause to them. This is why they
have to adopt some strategies that could fit their needs in the best ways. They must be able to
overcome the financial problems regarding the excessive production costs and the labor charges
(Buckley, & Ghauri,, 2015)
The company is also facing some growing competition from the wine and spirits. This is
why they will to adopt some business strategies worldwide. The costs have been rising for the
prices of glass, aluminum and hops. The cost cutting procedures must be there for the Carlsberg
Group as well (Solomon, , et al., 2014). However, Carlsberg understood that they were becoming
a regional company though their quest was to become a global company altogether. One strategy
that they could apply was to merging or getting the acquisition of the local companies so they
could gain the access to them (Buckley, & Ghauri,, 2015)These things could be much helpful for
them in many ways. In order to survive in this tough and competitive business environment they
should take up some plans so they could get the wide access to the entire Asian market and in the
countries like China and India. Carlsberg was unable to capture the market of North and South

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America since the other big brewery companies dominated the market there (Buckley, &
Ghauri,, 2015)
Value creation
One of the biggest issues in the success of the business strategies for the organization is
their value creation strategy for the profitable growth(Verde, , 2015)The company began to
concentrate on tapping the various emerging markets since they understood that they would not
be able to become the market leaders indeed (Hitt, , et al., 2016)They would like to focus upon
and strengthen their strategies on their emerging and current markets. They always want to be ‘fit
for fight’and this is their primary target to be the market leaders in which they are already
catering (Gilligan, & Hird,, 2012)
Innovation strategy
As discussed by the experts, one of the most important factors for the development of
their reputation in the international arrays is the innovation strategy. They have to focus on their
innovation properly so they can overpower their competitors in their own markets. They will
have to adopt the different strategies for the different markets in countries like China, India and
Russia (Czinkota, & Ronkainen, , 2013)The booming market in Asia in the countries like India
and China are so immense that the organization would like to keep aside all their competitors and
cater to the success of Carlsberg in these areas (Hitt, , et al., 2016)The large workforce might be
one of their biggest resources for the success. They would look to increase their brand reputation
in the best ways by the innovation process (Hoenen, & Hansen, , 2013)

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The marketing strategies will have to strengthen and surveys should be made properly to
identify the needs of the customers. The customer preferences will have to be understood
properly and the company must look to provide the company with the proper innovative
strategies (Gilligan, & Hird,, 2012)The target positioning should be made according to the
demographics of their customers. The development of the market positions should be done
according to the pricing and promotional strategies. The social media should be used for the
proper innovation within the market. In Asia, Carlsberg will have to work very actively and they
should focus on providing various types of products and services to their customers. The sales
work would have to be improved in the Asian market so the consumers can be attracted could
know about the quality of their products. They should also maintain the proper health standards
as well (Terpstra,, et al., 2012)
International strategies for Russia
Russia has been considered as one of the most profitable markets for brewery despite the
regional dominance of Vodka in their country (Terpstra,, et al., 2012)In this scenario, Carlsberg
have tried to adopt the Russian market through the merger of Orkla ASA. This is why they
would want to gain the benefits of the Russian market in the best ways indeed. The best
distribution facilities through the best supply chain network should be their first priority in these
markets as well (Verde, , 2015)As Carlsberg tended to merge with Orkla ASA and BBH, it was
very clear that they would be able to get the opportunity to get hold of the countries like
Uzbekistan, Kazakhstan, Russia, Ukraine and Belarus. The average consumption of beer was
more than the East European countries than the Scandinavian countries (Solomon, , et al.,
2014)It has been seen that the new taxes on liquor had been the main reason behind the
consumption of Vodka.

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International strategies for China
China is also a very big emerging market for the Carlsberg group. There has been a big
absence of the national breweries in China for a long time due to the regionalization of the beer
market. China has been considered as the largest market for the production of consumption of
brewery(Solomon, , et al., 2014)The non-premium brands were the dominators of the beer
market in China. This is why Carlsberg decided to provide the opportunities for the national
platform for the sale of the beer all over China. This would increase their sales along with the
chance to make good promotions for the organization. The market was much capital-intensive
and there were many barriers for the entry of Carlsberg. In this context, Carlsberg decided to
enter into the Chinese market with a joint venture on a 50-50 market share with the Thai
company Chang Beverages Pte Ltd. The Carlsberg Asia Ltd (CAL) was created in order to
strengthen their market position in Asia in alarge level.
After overcoming the initial setbacks, Carlsberg continued to move forward with the goal
in mind that they would surely have to make their positions to strongly enough to survive in the
national beer and alcoholic beverages market (Gilligan, & Hird,, 2012). The motivational
leadership among the employees was their main strategy to capture the Chinese market along
with the Indian market later on. The intensified consolidation process was the outcome of the
tremendous competition in the Asian market (Solomon, , et al., 2014).This is why Carlsberg had
attempted to cater to the daily needs of the people in the area. In this scenario, it can be
concluded that Carlsberg would have to make the proper demographic analysis of the entire
China since the western sides of the country are very much poor than the eastern sides
implementation and practiceimplementation and practice(Czinkota, & Ronkainen, ,
2013)Carlsberg was in the hope that the living standards of the people in China would surely

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increase so they could gain the higher profits from all over the country. This required the growth
of the national economy as well. As they are much competitive, they will look to develop the
capabilities of their internal management system (Paliwoda, & Thomas,, 2013)This will surely
be helpful for preparing the proper strategies for the organization and meet the requirements of
the customers. However, they should also try to explore the Indian market since high benefits
can be gained from their due to the high consumption of the alcoholic beverages all through. The
joint venture strategy of Carlsberg should be highly useful for this matter (Paliwoda, & Thomas,,
2013)
Conclusion
As per the above discussion, it can be concluded that Carlsberg has various opportunities
in front of them to prosper in the international market. This is why the company will surely look
to engage in tapping the new and emerging markets. This will be beneficial for them since the
number of competitors in these markets is not as high as the others. Thus they could explore the
Chinese and Russian markets properly and get the attention of the local and regional customers
in the best ways indeed. Carlsberg must utilize the opportunities to meet the needs of their
customers effectively as well.

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