Holmes Institute HI6006: Carlsberg Competitive Strategy Report

This report presents a comprehensive analysis of Carlsberg's competitive strategy, focusing on its application of various management frameworks and strategic models. The report begins with an executive summary and introduction, outlining Carlsberg's background as a leading international brewer. It then delves into the company's mission, values, and goals, followed by an examination of opportunities and threats, incorporating PESTLE and SWOT analyses to assess the external and internal environments. Furthermore, the report applies Porter's Five Forces model to evaluate the competitive landscape. The analysis includes a discussion of Carlsberg's core competencies, strengths, and weaknesses, leading to a proposed future strategy with recommendations for international expansion and differentiation. The report concludes by emphasizing the need for sustainable practices and collaborative partnerships for long-term success, referencing relevant academic sources throughout.

Carlsberg Strategy

Executive Summary
■ Carlsberg has developed as due to a cooperation capacity with the diverse
components and this is the min strategy to create monopoly in the market
and dominating the Brewer Association.
■ This presentation offers glimpse about Carlsberg business strategy in relation
with management framework such as SWOT Framework, PESTEL Framework
and Porter Five forces analysis.

Introduction
■ Carlsberg Group is one of the world top five brewers founded in 1847, operating on
b2b and b2c market. In Australia, Carlsberg has been brewed by Coopers since
2012 with its old recipe in relation to its flagship beer in markets.
■ The case concerns about the company success in China and Russia where growth
in emerging markets in China and Russia present several opportunities to the firm

Mission, Values and Goals
■ In relation with Carlsberg mission and vision, the company mission is to be a
dynamic provider of quality beers and it also brings its innovative culture, exciting
brand and committed teams which will bring individuals collectively and increase
greater enjoyment in life.
■ Considering the vision statement, it is “possibly the leading beer company among
the world” so as to become the first selection of the customer and employees
while steering market development in advance (carlsberggroup.com, 2019).

Opportunities and Threats
■ Carlsberg has an opportunity to support its digital transformation while
applying agile ways of working in cross functional teams so as to develop and
test new products and services in an agile and minimal way.
■ Carlsberg also has an opportunity to expand and develop more in India after
steeping its footprint into Russia and China.
■ Considering threats, it is related to the intense competition from Budweiser
and whisky drinkers and with people trading up from beer as of higher
disposable income drink less beer and more of wine and whiskey.
■ Furthermore, government laws in relation with the drinkers also create various
challenges for the brand.

PESTLE Analysis
■ In relation with political factors, the government in Russia has executed
various laws to lessen down the alcohol consumption level and they also
uplifted the tax rate while directly influences individual behaviour to purchase
of liquor products in the marketplace.
■ Considering economic factors, it also has a greater influence on the company
business like the economic situation of Eastern European market was also
negative regardless of its fastest growing marketplace and this indicates
Carlsberg to discover many emerging market having the attributes of more
per capita income.

PESTLE Analysis
■ The social factors include various behavioural patterns and cultural
characteristics of different market segment like the northern part of India is
completely different from the southern part. In relation with technological
factors, importing beer from different countries result in high taxes from the
government.
■ Considering environmental factors, many brewer organisations suppliers
emphasis on improvement of the beer packaging that leads to increase of the
recycling rate of waste plastic, glass, aluminium and cardboard that are used
to manufacture and in packaging of beer bottles. Legal issues can impact beer
industry in terms of advertising, labelling and packaging .

Porter Five Forces
■ In relation with threat of new entrants, it is low for Carlsberg as the company
is strong brand with culture and excellent advertisement with having 95 %
market share globally (statista.com, 2019). Considering threat of substitute,
one of the most powerful substitute for beer is soda although it does not
contain alcohol.
■ In terms of bargaining power of buyers, it is high due to presence of local
beers shops in the respective market domains and also due to low switching
cost. The competitive rivalry is medium as Carlsberg stands out in top 5
positions globally and there are only limited numbers of top players in the
market.

Strengths and Weakness
■ In relation with strengths, the organization Carlsberg is present in the list of
top five brewers working in the worldwide environment that is its biggest
strength. Good brand image helps in attracting people in the environment to
purchase goods and services.
■ Strong alliance (collaboration) with several profitable companies also helps
the organization to promote its brand image in the international markets like
Russia and China.
■ In terms of weakness, increasing debt ratio of the organization is their biggest
weakness because it reduces their financial competency. Domination of local
brands in both the new markets made it difficult to attain a reputable position
in the initial years.

Core Competencies
■ The resources of Carlsberg are the biggest advantage for them as they
increase the core competencies of the company. The company was able to
come in joint venture with several organization and acquire many because
they had vast resources to perform such actions and maintain authority in the
market.
■ The company attained access to growing market by aligning with BBH with
50% ownership. Further, below mentioned is the analysis of effectiveness of
the resources of the company Carlsberg.

Core Competencies
Resources Valuable Rare Imitable Organization Advantage
Financial Resources Yes Yes Costly to
imitate by
competitors
Yes Highly crucial
factor
Employees Yes No Yes Yes Can be used to
optimum extent
Diversification Yes No Yes No Wide potential
Research
Development
No Yes No Yes Wide potential
Cost Structure No Yes Costly to
imitate by
competitors
Yes Permanent
Supply Chain
Integration
Yes Yes No Yes Permanent
competitive
advantage
Intellectual Property
Rights and Patent
Yes Yes No No, as so far the
company has not
utilized the full
extent of IPR and
other properties
Has Potential
Local and Regional
Products
Yes No Costly to
imitate by
competitors
Yes Average
advantage

Future Strategy
■ The international strategy will help the organization to become comfortable in
the environment Russia and China with facing high losses. In terms of
international strategy, the company should make use Greenfield investment
in both the markets. This strategy would help the organization to eliminate
the control of other parties from their business and serve to the customers in
the ways they want. The company has adequate financial resources to setup
their business in the international environment.