Carlsberg Group: External Environment & Industry Analysis Report

This report offers an in-depth analysis of the external environment and industry dynamics of the Carlsberg Group, with a specific focus on its Carlsberg Green Label business unit. It begins with an introduction to the importance of environmental scanning and industry analysis in today's competitive business landscape. The report then delves into seven key segments of the general environment: demographic, economic, political, socio-cultural, technological, global, and physical factors. It also applies Porter's Five Forces model to assess the competitive intensity within the industry, evaluating the threat of new entrants, the power of suppliers and buyers, the availability of product substitutes, and the intensity of rivalry among competitors. The report highlights the major issues, trends, and factors impacting Carlsberg's operations and overall competitive advantage. The conclusion summarizes the key findings and suggests strategic implications for Carlsberg's future success, emphasizing the importance of adapting to evolving consumer preferences and technological advancements.

Running Head: CARLSBERG GROUP 0
Environmental and Industry Analysis
Student Details:

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Introduction
In today’s competitive business world, every company analyse the external
environment to know the impact on the business by developing required skills. It helps a
company to identify its opportunities and threats for attaining strategic competitiveness and
gaining profitability. There is a necessity for companies to acquire information about their
customers, competitors and stakeholders to build new core competencies and understand the
external environment so that it will get easy for a company to build barrier from perceiving
threats. This report will focus on the external environmental scan and industry environmental
analysis of Carlsberg Group from the perspective of Carlsberg Green Label as its business
unit. In this report, seven segment of the general environment and five forces of competition
model will be analysed along with outlining issues, trends and factors impacting the
operations of business unit and the company’s overall competitive advantage in future as
well.
Seven segments of the general environment
Demographic
Across the globe, socio economic group considering managerial and professional
workers and skilled manual workers (i.e. upper and upper-middle classes and skilled working
class) are most like to prefer drinking lager. The highest usage is between the ages of 25 to 34
which are predominantly drunk by 86 per cent of men considerably where they can easily
afford higher on-trade prices (Hattersley, 2019).
Economic
There is an increase in economic crisis due to which there was a rise in alcohol prices
that showed a slow decline in the sales volume of alcoholic drinks. Carlsberg’s profit and
income is impacted substantially by exchange rate fluctuations where purchases and revenue
are translated in the currency of Carlsberg that is DKK (Carlsberg Group, 2015). Also, there
is uncertainty of interest rates which has an adverse effect on consumers and the company.
Political
There is an increase in public health issues of individuals due to the impact of alcohol
consumption where politicians are trying to measures for reducing the general consumption

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rate by increasing alcohol taxes and legislating restrictive policies at high. This can impact
Carlsberg in terms of lower revenue, sales and market value. As stated in section 2.3, “Binge
Drinking” is a political issue where Prime Minister is getting pressurised for planning to set
minimum pricing of 45p per unit to handle the problem (Triggle, 2012).
Socio-cultural
Nowadays, consumers are becoming more heath conscious; also, the government
requires facing costs in relation to individuals’ poor health. In this regards, initiatives such as
Change4Life aims at encouraging consumers to eliminate less healthy drinks such as alcohol
and promote healthy lifestyles (Charles, 2011). Along with Carlsberg, many other beer
brands were affected in the market. So, Carlsberg decided to introduce range of lagers with
low-calorie for consumers thinking of their health.
Technological
Carlsberg is allowed to use highly developed technology for incorporating solutions
of sustainable packaging in their corporate strategy as the increase in natural resources
scarcity. There is continuous growth in rising Internet users where Carlsberg take an
advantage of connecting its potential customers through using popular applications and
campaigns such as Facebook, Instagram, or Snapchat (McCarthy, 2019).
Global
Across all the media platforms, there are mandatory rules applied under the
Advertising Standards Authority for under-aging drinking and minimising binge (Bray &
Lloyd, 2019). There is no permission of Carlsberg to direct their ads due to people who are
under 18 and also reflects the youth culture consists of social success, irresponsible behaviour
or sexual attractiveness.
Physical
One of the rising concerns for consumers is CSR (Corporate Social Responsibility)
where Carlsberg responded and built its corporate strategy. The company strived to deliver
sustainable packaging solutions, provide environmental efficiency in the Carlsberg’s
breweries, reduce the consumption of fuel by “global route planning tool” enforcement to all
logistics and explore new ways for enabling sustainable water use and reducing consumption
of water (Carlsberg, 2019). Carlsberg declared to take social responsibility and to be eco-
friendly for gaining competitive advantage against its competitors.

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Five force of competition
Threat of entry
There is low threat of new entrants as there is not easy for smaller brands while
entering in the market as it is difficult to differentiate strong market share of Carlsberg and
other beers. Also, Carlsberg have the strength due to its strong brand (Malviya, 2019).
Power of suppliers
There is a low power of suppliers as Carlsberg represents strength of minimal brand
within producers having low switching costs and highly substitutable ingredients (Baker,
2015).
Power of buyers
The power of buyers is considered as moderate where with various buyers, there are
competitors in large quantities as well (Johnson, 2020). There is less number of competitive
substitutes in terms of beer brands of Carlsberg.
Product substitutes
The substitute of products is high where there are multiple beer brands and other
drinks as refreshments as well. Also, Carlsberg can cause lack of customer loyalty due to
differentiation of products (Arthur, 2019).
Intensity of rivalry among competitors
Carlsberg have an indirect competition within the categories of alcoholic drinks where
the close one is Cider growing rapidly in recent times along with driving growth. Direct
competition Carlsberg face with is Becks, Heineken, Carling, Stella Artois, Budweiser,
Fosters and Guinness considered in beer brands. Thus, the intensity is moderate where
Carlsberg holds 63 per cent in the beer market (Carlsberg Breweries, 2017).
Conclusion
In conclusion, Carlsberg offers broad variety of products where one of its business
units is Carlsberg Green Label. The group focuses on finding individual target group for each
of its main brands along with adopting activities to fulfil the needs of those customer groups
which will help Carlsberg in increasing its preferences and boosts sales; also, it is important
to take care of this issue of technological advances by improving its digital landscapes

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overall. It is essential for the company to broader its targeted audience along with beating
online presence of its competitors on the social media platforms. In terms of socio-cultural
factor, there is lack of mobile apps for Carlsberg to push its awareness where its Instagram
trial went to be unrealistic due to differentiating laws in distinct countries. It is not easy for
Carlsberg to differentiate against its competitors and there is presence of negative perception
of people due to opposing the proposal of governments while introducing unit pricing at
minimum for alcohol. Lastly, consumers are becoming more health conscious is one of the
rising trends for Carlsberg which is required to be taken care of.

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References
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Baker, N. (2015, November 11). CARLSBERG CRITICISED FOR NEW SUPPLIER TERMS.
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Johnson, B. (2020, February 27). Global Lager Market 2020|by Top Key Players- Carlsberg
Group, Anheuser-Busch Companies and Heineken N.V. Retrieved from Market
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27
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branding-its-beer-the-rancid-piss-satan
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