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.
Contribute Materials
Your contribution can guide someone’s learning journey. Share your
documents today.
Competitive Strategy1 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 Strategy2 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 Strategy3 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 500brands.Theymajorlyvarymeaningfullyincapacity,targetedaudience,terrestrial penetrations as well as price (Carlsberg Group, 2019).
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
Competitive Strategy4 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 Strategy5 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: ï‚·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) ï‚·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). ï‚·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 Strategy6 ï‚·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 ï‚·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.
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
Competitive Strategy7 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. InInternational Business Strategy(pp. 122-128). Routledge. CarlsbergGroup.(2019)AboutUs[Online].Availablefrom:https://carlsberggroup.com/ [Accessed 31/5/19] CarlsbergGroup.(2019)AnnualReport[Online].Availablefrom: 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., (2016) Quality of life and coping strategies of brain injured patients in context of support for social and professional reintegration.Annals of physical and rehabilitation medicine,59, p.e132. 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 Strategy8 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.andMorschett,D.,(2017)DeterminingtheGenericInternationalStrategy. InDeveloping International Strategies., Berlin: Springer Hatch, M.J. and Schultz, M., (2017) Toward a theory of using history authentically: Historicizing in the Carlsberg Group.Administrative Science Quarterly,62(4), pp.657-697. 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). The drink Business. (2015)top strategies for beer and cider in 2015[Online]. Available from: https://www.thedrinksbusiness.com/2015/03/top-strategies-for-the-beer-and-cider-market/ [Accessed 31/5/19] Verde,C.,(2015)StrategyandGreenbusinessmodel:ThecaseofCarlsberg group.Calitatea,16(148), p.75. Wiyo, K.A., Fiwa, L. and Mwase, W., (2015)Solving deforestation, protecting and managing key water catchments in Malawi using smart public and private partnerships.Journal of Sustainable Development,8(8), p.251.