Business Strategy: Carlsberg's Challenges and Evolution in Cyprus

This report provides a comprehensive analysis of Carlsberg's business strategy in Cyprus. It begins by outlining the major strategic forces impacting the company over the past 2-3 years, including increased competition, economic downturns, changing social dynamics, and environmental concerns. The report then delves into Carlsberg's current strategies, such as long-term planning, product relaunching, technological advancements in production and marketing, and sustainability initiatives. It also examines the company's distribution strategies, focusing on collaborations with retailers, wholesalers, and e-commerce platforms. The report further analyzes Carlsberg's financial strategies, including increasing investor participation. Using strategic analysis tools like Bowman's Clock and the Ansoff Matrix, the report assesses Carlsberg's strategic positioning. Finally, the report recommends future strategies for Carlsberg, emphasizing the development of technologically skilled employees, data-driven decision-making, and improvements in logistics and supply chain management. The report highlights the importance of adapting to the changing business environment to ensure long-term success.

BUSINESS STRATEGY

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Carlsberg in Cyprus
Companies in the modern day business environment are facing many kinds of challenges.
These challenges have impact on the way an organisation is dealing with its strategic affairs.
There are major strategic factors that have impacted upon the business of the company in the
last few years. It is critical that companies understand the level of their impact and work
accordingly to manage the skills and other resources so that in the long term their growth is
not hampered. Future strategies need to be developed on the basis of the current strategies
used by the firm. A company must have long term plan to identify the needs of the coming
future and the way in which they will evolve in the future. Carlsberg is a global brewery
company which was established back in the year 1847. In the year 1967 this company was
granted the license to produce Carlsberg beer in Cyprus. This was the first nation where this
company produced its beer outside Denmark (Photiadesgroup, 2020). This essay will discuss
the major strategic forces that have impacted the business in the past 2-3 years. It will also
illustrate the current strategy pursued by the firm along with the ways in which they need to
evolve in the future.
Carlsberg in the current time had faced lots of challenges especially in terms of the
competitive environment they are facing in the countries like Cyprus. Cyprus developing
itself as a tourist destination and hence the market of brewery is going to expand in the
coming years. However in the past 2-3 years the dynamics have changed and this change in
the dynamics has impacted the business of the company. It can be seen that in the coming
years there had been changes in the competitive environment all across the globe. This is true
in terms of the fact that in the past 2-3 years there had been increment in the competitors that
are from different parts of the world. It is due to this that the sales growth especially in the
beer product has reduced considerably especially when it comes to Cyprus however the total
growth of the profit is not impacted by it. This increase in the competition has direct impact
on the amount of marketing that is done in the market. It is seen that the expenditure on the
marketing of beer products had impact on the prices of the products (DeSalle and Wynne,
2019). Since due to competition companies like Carlsberg are unable to raise the prices as
much as they want hence it has become critical for them to downsize the product quantity that
they are offering. This is done by redesigning the packaging mechanism of the company.

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It is seen that in the last few years the refugee situation in the region has increased especially
in the time when the European economy is already seeing a downfall. This has resulted in
company finding new sources of investment for them. At the same time even the markets
where the consumer purchase cycle for the brewery products were higher, there is decrease in
the sales (Masouras, Komodromos and Papademetriou, 2019). In Cyprus also there is
decrease in the growth of the traditional sectors which had impact on the product’s sale. The
economy is acting as a major strategic force that is acting as a challenge for the company in
past few years. The marketing expenses have increased and this has caused challenges for the
finances within the company (Skordou and Sergiou, 2017). At the same time there is an
increase in the taxation on the production and sales of the alcoholic products and this is
creating a challenge for the company especially in terms of selling products at lower cost.
This is why organisations have to reduce the operational cost. The trade war between China
and United States has impact on the business of many brewery firms. As China is one of the
biggest markets for the Carlsberg hence this trade war has negative impact on their growth
hence showing the impact on the production of the beer in the Cyprus.
The social dynamics have also changed in terms of the fact that there are large numbers of
young people that are coming up which is the major target segment for the company.
However it is to be understood that in the past two or three years there had been increase in
the health related concerns of the people. It is due to this that people are going away from the
alcoholic products. This is creating negative environment for the company’s growth
(Gammelgaard and Hobdari, 2013). This company controls 53% of the market share in the
Cyprus hence negative environment in the sales will have impact on the growth of the
company.
The environmental concerns also have impact on the quality of the raw materials that are
used in the organisation. The grape quality has decreased due to the climate change. This
company is working on developing hybrid quality crops whose quality and production does
not get degraded due to the climate change. However this challenge is going to increase in the
coming time. Company had to seriously think on packaging especially in terms of utilisation
of single use plastics (Buckley and Ghauri, 2015).
Strategic factors such as technology also have impact on the development of the industry.
This can be understood in terms of the fact that there are highly advanced technologies that is
being used in the firms and the cost of these technology is very high. It is due to this there is

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higher pressure on the companies like Carlsberg to continuously invest on technologies. The
major areas of focus will be on the digital marketing technologies and the data technologies.
The data technologies are important because it will help the organisation in its development
process (Stefánsson, 2011). It is seen that with the help of data technologies an organisation
will be able to reduce the challenges related to the understanding the environment. It is seen
that their competitors have highly leaned into the data technology which is a very big race.
There are different kinds of strategies that are used in the Carlsberg to understand the
intensity of the strategic challenges confronting their business and to overcome them. In the
recent times this company has focused upon dealing with the strategic affairs with the help of
long term planning. For this, company has different types of plan to operate in Cyprus. In this
country Carlsberg beer is produced by another company named Photos Photiades Breweries
who has performed its role in an effective manner from the past 50 years (POKRIVČÁK, et
al 2019). In their strategies they have included Cypriot culture and the lifestyle of the people.
Relaunching of products in a new form and with a new design helps them in holding the
market.
Their strategies are highly dedicated towards utilising technology in all the aspects of the
business. This can be quite seen in the area like use of technology where they are
continuously upgrading their technology to ensure that their production capacity increase and
they can control the production as per their demands. This helped them in constantly
delivering quality. They have constantly improved the raw materials that they are using and
the packaging materials that are being used in the organisation (Vrontis, Thrassou and
Czinkota, 2011). Reinvestment in the technology has helped them in staying ahead of the
competitors. Automated technology is being used in the supply chain and logistics area as
well which allows them in maximising their operational efficiency and increasing the lifetime
of their products. In order to manage quality in their products they have strictly adhered to the
Carlsberg standards.
They have also concentrated upon the digital marketing strategies. This is because there are
many ethical challenges that companies had to face when it comes to traditional marketing
techniques especially the age related constraints. The platforms like You-tube provide them
with a base to target their exact customer segment. They have focused towards improving the
value of their shareholders for which the participation of different shareholders has been
increased and focusing on their growth (Carlsberg Group, 2020). In Cyprus they have made

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the distribution strategy in which they have made collaboration with wide variety of retailers
and hotel chains that sells only Carlsberg products. Apart from this they are also selling their
products with the help of strategic partners, Wholesalers and e-commerce platforms. They are
concentrating on the music and festivals which allows them to sell larger amount of beers.
Since Cyprus is developing itself as a tourist location hence such events are also increasing
which is a positive sign for the growth of the sales in the country.
They are also working towards sustainability. It is due to this that they are working with their
partners to improve the packaging material where they are rethinking packaging with the
Green Fibre Bottle. This is the part of their strategy to achieve Zero carbon footprints from
their business. They are working towards developing 100% bio-based and recyclable paper
beer bottles (Carlsberg Group, 2020). For achieving sustainability they have worked towards
training their employees which could help them in improving their working capacity and
efficiency.
In Cyprus they are working towards increasing their partnership with more numbers of
people. They have also increased the global supplier’s base hence they are supplying large
amount of products outside Cyprus which are produced in Cyprus only. The financial strategy
of the company is to add more numbers of investors in their pool (Vrontis and Thrassou,
2011). This is because it allows an organisation to reduce the chances of failure especially on
the greater platform. In the environment where the financial risks are increasing, this is
critical for the financial sustainability of the firm.
On the basis of the strategic analysis tool Bowman’s Clock tool, it can be said that this
company is utilising the strategies that can be said to as hybrid. This type of positioning on
the strategy clock suggests that this company has understood the market and they have
strategies for every type of situation they are in. This will help them in managing their
operations in current and future scenarios.
Other tool that can be helpful in understanding the strategies made by Carlsberg in Cyprus is
Ansoff matrix. According to this tool it can be said that they are using diversification
strategy. There are different types of products produced by the company and they try to
differentiate them on the basis of the diversification they bring in the market. From their
financial strategies to their sustainability strategy, this company tried to make strategy for
each and every aspect of the business.

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Since the business environment is changing at much faster speed and it has become
unpredictable hence it is critical for the management to have long term plans for different
functional areas. In order to evolve in future this company needs to focus on developing skills
as it is an integral part of the higher performance. In the future it is skills that an organisation
has plays a critical role in its development (Uchenna, Mary and Okelue, 2012). Since they are
focusing on the development in the long term and are continuously upgrading their
technology to make it more automated hence they need to improve the numbers of people
that are technologically skilled. They also need to focus on the data which they have gathered
in their process and marketing which will help them in improving their business processes
and the standards. Since data forecasting has become highly critical for the success of the
organisation hence it is critical that this firm enhances their expenditure on data and data
technology.
As a part of the future strategies this company needs to reduce the challenges related to the
logistics and supply where they need to focus on increasing the lifetime of their products.
This can only be possible if the company is able to reduce the challenges in the fields like
logistics handling where they need to improve on the areas like management of raw-materials
and finished products. Strategies such as business expansion and diversification can be
helpful for the organisation both in the local markets and the international markets (Fogarty,
2010). They need to boost their research in the areas like developing new kinds of taste and
improve the quality of their existing products. This can be achieved by long term planning
and investment in the research and development.
In conclusion it can be said that Carlsberg is operating in Cyprus with different mechanism
where they need to improve the pace with which they are growing. They need to improve in
the areas like training and development that would help them in enhancing the skills which
will be required in the future. They need to evolve in the areas like research and development
with the help of the skills that they will develop in the future. They need to add more
numbers of suppliers that could help in improving the quality of the products. However they
need to add more numbers of products that are of different taste. This is necessary for
achieving higher market share.

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