Carlsberg's Strategic Entry into Emerging Markets: A Case Study

This case study examines Carlsberg's expansion into emerging markets, focusing on the strategic challenges and opportunities faced in Russia, China, and India. The analysis covers the company's background, SWOT analysis, and the causes of both successes and failures in these markets, including issues like debt from acquisitions, competition, and regulatory hurdles. It explores the strategies Carlsberg can employ, such as strengthening international business strategies through partnerships and brand image creation, to overcome barriers and achieve market leadership. The case study emphasizes the importance of understanding local cultures, predicting market trends, and differentiating products to succeed in the competitive landscape. References to academic sources are also provided to support the analysis. The study also discusses the impact of financial partnerships and brand building to enhance market presence and profitability.

Carlsberg Entry in
Emerging Markets
and Strategic Issues

 Carlsberg is fifth largest
brewery company in the
world.
 Founded in 1987
 Founder was Jacob
Christian Jacobsen
 Products are beer and soft
drinks
 Net Income was $1.24
billion
 Subsidiaries are
Kronenbourg 1664,
Tuborg, Baltika, Somersby.
Introduction

 Russia
 China
 India
 European Union (EU) Countries
Emerging Markets

SWOT Analysis of Carlsberg

 Large number of Competitors in
Russian and Chinese market
 Poor Partnership with its Strategic
Partners that increased the debts on
the company
 Poor Assessment of International
Market for Beer Products
 Based on wrong estimation of
increasing income of people and
demand of its products in Western
China (Madsen, 2019).
 Poor image in China and conflict with
its joint ventures
 Fear of growing competition in Indian
market
Strategic Issues of Carlsberg in
Emerging Markets

 Causes of Failure in EU: The acquisition with a
major Scottish brewer Heineken increased the debt of
the company in 2008. The large number of competitors
and decreasing market share is the anther cause of
failure.
 Causes of Failure in Chinese Market: Poor
estimation of Chinese market and its conflict with joint
venture company resulted in a huge loss and heavy
penalty in South/East Chinese Market (Buckley and
Ghauri, 2015).
 Causes of Failure in Russian Market: Heavy
competition in the market and strict rules and
regulations of Russian government (Buckley and
Ghauri, 2015).
Causes of Failure in EU, Russia,
and China

 Increasing Market Share
 Facing Strong Competition
 Differentiation in Products
 Maximising the long-term
profit
 Partnership with those
Firms that are financially
strong to avoid any
further debt (Buckley and
Ghauri, 2015).
Goals of Carlsberg Before Making
Entry in Emerging Markets

 Knowing the Culture, history, consumption
Pattern of Customers in emerging markets
 Barriers on Entry on Emerging Markets
 Trends in International Market
 Local Competition
 Government and political Supports
 Brand Image of the company
Factors that Determine the Entry
of Carlsberg in Emerging Markets

 The company needs to strengthening its
international business strategy by using various
strategic decisions such as exporting, licencing,
partnership, franchising etc. (Grünig and
Morschett, 2017).
 The company should focus on establishing a good
partnership in the emerging that will help the
company to increase its market share in Emerging
markets (Søderberg, 2015).
 The company needs to focus on tie-up with those
companies which have strong financial position
and strong holding in the market.
Strategy to Enter in Emerging
Market

 Company should focus on
using its resources
 Sufficient Budget Allocation
 Create a Brand image that
will boost the demand of the
products
 Strategic Partnership with
local firms
 Predicting Trends in Western
China and Indian Market to
ensure high market demand
 Take the Market to the People
Strategies to Became a Successful
company in Emerging Markets

 Creating Brand image through Advertising
and giving value for money
 Differentiation of Products
 Focus on World of Mouth Advertising
 Low Cost Strategy
 Strategic Partnership with Other Brewery
companies
Techniques to Establish Carlsberg as a
Market Leader in the Emerging Markets

 Grünig, R. and Morschett, D. (2017) Determining the Generic
International Strategy. In Developing International Strategies, 15(1),
pp. 175-184.
 Madsen, E.S. (2019) From Local to Global Competitors on the Beer
Market [online]. Available at:
https://pure.au.dk/portal/files/162346591/wp19_11.pdf [Accessed:
16/09/2019].
 Søderberg, A. M. (2015) Recontextualising a strategic concept within
a globalising company: a case study on Carlsberg's ‘Winning
Behaviours’ strategy. The International Journal of Human Resource
Management, 26(2), pp. 231-257.
 Buckley, P.J. and Ghauri, P. (2015) Case study I: Internationalization of
brewery companies: the case of Carlsberg. International Business
Strategy, pp. 122-128.
 Buckley, P.J. and Ghauri, P. (2015) International business strategy:
theory and practice. UK: Routledge.
References