Competitive Strategy

This document discusses the competitive strategy in the international market and the challenges faced by Carlsberg. It explores the international strategies adopted by the company to cope with these challenges and maintain its goodwill. The document also provides recommendations for the company.

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Competitive Strategy
5/31/2019
(Student Name)

Competitive Strategy 1
Table of Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................3
Analysis of issues in case study.......................................................................................................3
International Strategies adopted by company..................................................................................4
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

Competitive Strategy 2
Executive Summary
Carlsberg is one of the repudiated companies in the international market. The company has
expanded its roots in most of the countries that made them as the leading company worldwide.
However, the expansion of business in Russia and China did not give a great return to the
company. The uncertainty involved in the political environment of Russia gives a great amount
of loss to the company. Moreover, the company also penalized with a fine in China that affected
the overall profit of the company at a greater level. Therefore, it is required for the company to
analyze the market more efficiently and should also stop continuing its business from the places
where they do not get a good return.

Competitive Strategy 3
Introduction
Beer is one of the most consuming alcoholic drinks worldwide. Some of the author states that
beer is furthermost prevalent drink subsequently after water and tea. There are major fermenting
firms however stress is majorly made to the Carlsberg in this case. Carlsberg is one of the
leading companies in the international market (Verde, 2015). It has earned a maximum share in
the market that made the leaders in the global market. The Carlsberg Group is the fourth largest
brewery group in the international market (Beaumont, 2018). The group is illustrious by a high
degree of selection of products, philosophies as well as markets. The actives of the company are
focused on the marketplaces where the group has the forte as well as the accurate products to
protect a foremost position in the international market. Due to the reason of variation of the
markers, the contribution to growth, earning as well as development within the Group differs and
fluctuated (Brownsell, 2011). The international market is full of uncertainty. Most of the other
companies have also entered in such a market that makes the environment more competitive for
Carlsberg. The company has faced various issues in managing its business in China and Russia
due to certain reasons (Buckley and Ghauri, 2015). Therefore, in the following part, there will be
detailed discussion on the international strategies that can be adopted by the company that helps
them in competing up with the challenges faced by the company and can able to maintain its
goodwill efficiently and effectively.
Analysis of issues in a case study
Carlsberg has covered most of the countries to target its consumers. In republics where the
company has no breweries, the team vends its products through the process of exports as well as
permitting covenants. The main aim for establishing as well as develop the robust market
positions for its global superior brands through vibrant businesses with authorizing, export as
well as duty-free associates around the globe. The portfolio of the company comprises more than
500 brands. They majorly vary meaningfully in capacity, targeted audience, terrestrial
penetrations as well as price (Carlsberg Group, 2019).

Competitive Strategy 4
It highlighted that the beer the company can able to meet the sell requirement of beer in the
international market and do not face considerable participants that suggest it is not challenged
with the pressure to cut-down its cost edifice. It inclines to unify the growth function of beer
such as exploration as well as growth in its domestic country and inaugurate the industrial with
the promoting purposes in the Republic it functions (Carlsberg Group, 2019). Therefore, it
represents that the company has adopted an exporting strategy to expand its business in the
international market. Moreover, for entering n the international market the company has also
adopted a joint venture method to expand its business in the international market. In the year
2000, Carlsberg and Chang Beverages Pte Ltd which is a Thai based company entered into a
joint venture where that exercised equal share control in the business. It benefits both the
companies, due to the reason the investing companies limits the possible barriers by making the
use of the local companies expertise on the prevailing economic as well as political condition
(Carlsberg Group, 2019).
However, the company has expanded its business in China and Russia. There are high political
as well as social barriers to entry in China. The company has faced a major issue in such a
market. The government of China has imposed a huge fine on the company and it also lost three
years of development time in China. Moreover, the country Russia has fluctuating external
environment that would affect the business at greater level (Carlsberg et al., 2016). The company
has faced a great level of competition in the market of Russia. The country has also political
uncertainty that would affect the overall profit margin of the company at a greater level. The
government of Russia was contemplating worrisome taxation proposals for alcohol in general as
well as beer in particular. The sources of revenue of the company majorly depend on the Western
European market if any changes occur in the market that would affect the overall performance of
the company negatively (Chesbrough eta l., 2018).
Furthermore, the main current strategy of the company is expansion of the business in the
international market at a maximum level as well as to become important in the arcades they are
in, however, the section of the company in Western Europe wanted to make worth as well as
enhance the efficiency of the company in an effective manner (Ghose, Heiman and Lowengart,
2017). It is majorly done by the company through strengthening its brands, being innovative as
well as expanding its portfolio. Due to the strategy of expansion, the company is able to keep an

Competitive Strategy 5
eye out for trifling breweries to obtain or amalgamate with, since it might support them in
enhancing the market share or deliver them with the main situation in that specific market (Hatch
and Schultz, 2017). While analyzing its data, after the overthrow of S&N, Carlsberg has full
possession over the BBH that stretches them a robust position in the Eastern Europe market.
Even though for expansion of business, the company has adopted an acquisition and merger
strategy that played a vital role for the company at a greater level. The company will not require
making a large investment in such events in the nearby upcoming as they have a great duty after
the acquisition of 50% of S&N Company (Grunig and Morschett, 2017).
International Strategies adopted by the company
The international market is full of opportunities and threats. It is required for the companies to
adopt the strategies to cope up from the threat and can able to grab the opportunities more
efficiently. Therefore Carlsberg is required to adopt effective international strategies in its
business to cope up from the challenges that are majorly faced by the company such international
strategies are explained in below points as they are:
 The company should not rely on specific country for its revenue. It will increase the risk
to the company due to the reason if any fluctuation occurs in the market will affect the
overall performance of the company at a greater level. Therefore, Carlsberg should target
different countries to distribute its risk that is involved in the international market as if
any fluctuation occurs in one country that can be covered by earning from different
countries. It is required for the company to distribute its risk (Jeyacheya, Lee and
Hampton, 2017)
 The company should stop continuing its business in Russia due to the reason such market
is covered with the uncertainty that can give big loss to the company. The company
should expand its business in the international market but should expand it at those places
from where they can able to achieve revenue from such market (The Drink Business,
2015).
 The company is required to standardize its product according to different countries rather
than tailored to the local market. Such a strategy will decrease the risk for the company
in an effective and efficient manner.

Competitive Strategy 6
 Carlsberg should also stop continuing its business in China due to the main reason the
external environment of the country is not positive for the company. The company has
already faced huge competition in such a market and also penalized with a huge amount
of fine. It can expand its business in other Asian countries to earn maximum level of
profit and earnings
 The company should analyze the market first while entering in such a market. The
external market should represent a positive aspect that can help in expanding the business
of the company in a more effective and efficient manner (Wiyo, Fiwa and Mwase, 2015).
Conclusion
From the above analysis, it can be concluded that the expansion of business in the international
market can provide great opportunities to the company. However, the international market is
covered with threats and opportunities. The company is required to analyze such a threat and can
able to change the threats into opportunities. One of the leading company Carlsberg deal in the
international market has expanded its business globally. The company is considering as one of
the fourth leading company that made them successful in the market. The company has expanded
its business in most of the countries such as Europe, Asia, and Hong Kong Russia and so on. The
company has entered in the market through exporting, joint venture as well as merger &
acquisition. However, the international market is full of threats. The company has expanded its
business in Russia that created the biggest issue for them due to the reason of a change in the
taxation policy of the country and other fluctuation in the political environment of the country
created create an issue for the company. Moreover, china also seemed as an unsuccessful
expansion for the company. The company was not able to expand it properly and also faced
various challenges in that. Thus, it is required for the company to analyze the market efficiently
and should stop continuing its business in unfavorable countries to enhance its revenue.

Competitive Strategy 7
References
Beaumont, S. (2018) How the global beer category will face the growth challenges of the future
[Online]. Available from: https://www.just-drinks.com/comment/how-the-global-beer-category-
will-face-the-growth-challenges-of-the-future-comment_id127295.aspx [Accessed 31/5/19]
Brownsell, A. (2011) Carlsberg unveils new global brand strategy [Online]. Available from:
https://www.campaignlive.co.uk/article/carlsberg-unveils-new-global-brand-strategy/1063944
[Accessed 31/5/19]
Buckley, P. and Ghauri, P., (2015) Case study I: Internationalization of brewery companies: the
case of Carlsberg. In International Business Strategy (pp. 122-128). Routledge.
Carlsberg Group. (2019) About Us [Online]. Available from: https://carlsberggroup.com/
[Accessed 31/5/19]
Carlsberg Group. (2019) Annual Report [Online]. Available from:
https://carlsberggroup.com/media/28928/carlsberg-as-2018-annual-report.pdf/ [Accessed
31/5/19]
Carlsberg Group. (2019) SAIL ’22 The Carlsberg group strategy [Online]. Available from:
https://carlsberggroup.com/who-we-are/about-the-carlsberg-group/our-strategy/[Accessed
31/5/19]
Carlsberg, M., Mazaux, J.M., Wiart, L., Coste, E., Koleck, M., Simion, A. and Soriano, V.,
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Chesbrough, H., Bogers, M., Strand, R. and Whalen, E., (2018) Sustainability through open
innovation: Carlsberg and the green fiber bottle. The Berkeley-Haas Case Series. University of
California, Berkeley. Haas School of Business

Competitive Strategy 8
Ghose, S., Heiman, A. and Lowengart, O., (2017) Isolating strategy effectiveness of brands in an
emerging market: A choice modeling approach. Journal of Brand Management, 24(2), pp.161-
177.
Grunig, R. and Morschett, D., (2017) Determining the Generic International Strategy.
In Developing International Strategies., Berlin: Springer
Hatch, M.J. and Schultz, M., (2017) Toward a theory of using history authentically: Historicizing
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Jeyacheya, J.R., Lee, D. and Hampton, M., (2017) The political economy of international dive
tourism. Published in Tourism Geographies (10.1080/14616688.2017. 1357141).
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Verde, C., (2015) Strategy and Green business model: The case of Carlsberg
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