Report on Carlsberg's International Strategy: HI6006 Analysis

This report examines Carlsberg's international strategies for penetrating the European market, focusing on achieving a competitive advantage. It analyzes diverse markets and the company's approach to growth through mergers, particularly in the challenging Western and Northern markets. The report suggests minimizing balance dues to improve cash flow and promote future growth through strategic acquisitions. It highlights the importance of international strategies for securing significant market share and maintaining competitiveness against rivals. The analysis includes the company's background, strategy, prospective partners, acquisition targets, barriers, and portfolio management, ultimately concluding that a strong focus on international strategies is crucial for Carlsberg's success in the European market. Desklib provides a platform for students to access similar solved assignments and past papers.

Carlsberg International Strategy 1
CARLSBERG INTERNATIONAL STRATEGY
Student’s Name
Professor Name
Institution Affiliation
September 30, 2018

Carlsberg International Strategy 2
I. Executive Summary
The paper examines various approaches that the Carlsberg firms employ in its objectives
to reach the European marketplace. It main aim was to figure out how the company’s staff
members make use of Carlsberg international strategies in order to gain a competitive advantage
over its rivals. The international market was selected since it was diminishing for Carlsberg;
moreover it was because of its economical unsteadiness in the outside marketplace. By doing this
the paper has conducted thorough analysis of diverse markets centered on the first four biggest
brewing trading firms worldwide. The international strategy put into account the merger theory
which is focused on growth and expansion in the European marketplace. Carlsberg great rivals
are the Western and the Northern markets since it encounters severe difficulties, thus it is
essential for the company to maintain a constant market share.
An immediate action that Carlsberg should consider it that they should minimize balance
dues and therefore boost the rate of cash flow which will greatly assist smoothening the
company’s price share and promise every shareholder that the company is suitable for doing
business. This technique will be accommodating in the present market Carlsberg is involved in.
Additionally, this aids in promoting future breakthrough since the company will be in a position
of executing their desired strategies by merging and acquisition of its products. According to
research analysis, it is deduced that Carlsberg Breweries should be focused more on their
international strategies in order to attain great shares in the European. In reference to Karaulov
and Mirolubov (2015), the Company’s performance it determined on how it carefully employees
it international strategies to obtain positive competitive advantage.

Carlsberg International Strategy 3
Contents
I. Executive Summary.................................................................................................................2
II. Introduction...........................................................................................................................4
III. Background...........................................................................................................................5
IV. Strategy and Prospective Partners........................................................................................5
V. Acquisitions Targets and Strategic Responses.....................................................................8
VI. Barriers...............................................................................................................................10
VII. Portfolio Management and Consolidation..........................................................................10
VIII. Conclusion......................................................................................................................11
IX. Reference............................................................................................................................12

Carlsberg International Strategy 4
II. Introduction
There is rapid transition in globalization across the world today. Various prospects often
appear and vanish instantaneously therefore it is vital for tech firms to be prepared and get hold
of such chances at the quickest time possible. Based on the paper every company should have a
strategy in order for it to achieve its target goals. Every firm must formulate its strategies in order
to inform its employees on what they are to achieve at the end of every fiscal year. Due to the
drastic changes in data sharing and technology change it is essential for each company to adjust
immediately on their strategies. It is the core reason why this paper has deepened its focus on
companies’ strategies. In this report, our company of choice is Carlsberg Industry, which is a
Danish firm that has exhibited fruitful results and has gained traffic all over the world markets
(Levine, 2014). Initially, it was a small company with a relative small size with data that is
within reach.
The Danish communities have acknowledged Carlsberg to be the leading exporters of its
brands in the oversea markets. The company has a great opportunity to be exploited in the near
future which is why they need to employ effective strategies for them to meet such opportunities.
The paper’s focus is on Carlsberg international strategies in its aim to reaching the international
markets (Western and Northern European markets) since the current market it is in will diminish
in due time. The Western and the Northern markets are Carlsberg biggest market which draws
more profits for the Carlsberg Industry (Mandel and Humphrey, 2002). It is advisable the
company should uphold the current international strategies due to the high level of competition
with other companies offering the same products. The 3 great rivals of Carlsberg are all in the
market making it hard for Carlsberg as a company.

Carlsberg International Strategy 5
III. Background
The company was established in 1847 by Jacobsen. Its main operational headquarters are
in Copenhagen, Denmark. Upon the death of Jacobsen the company was preceded by the
Carlsberg Foundation which currently is in control of every activity done the Carlsberg
employees. Carlsberg is the company’s brand name which was depicted from Jacobsen’s son
who was known as Carl. It employee are about 41,000 in number mostly positioned around
Eastern, Western Europe and Asia. The company’s portfolio is estimated to be around 500
brands which significantly vary in terms of geographic penetration, target audience, price and
volume of its products. It is the fourth largest brewery industries in the world. The main
distinction that differentiates the company’s products and its rivals is its traditions, markets, and
trademark. As a result of the fluctuation of the market there has been great emphasis by
managers on growth, and development in order achieve long-term objectives (Dzikevičius and
Šaranda, 2011). In remote places where the company has not established its brewery industry the
group often markets its products via exportation and various licensing conformity. According to
Thorsøe and Noe (2015), the main objective of the company’s managers is to institute and
expand the market through employing international strategies appropriately which will create
strong partnership worldwide.
IV. Strategy and Prospective Partners
A brilliant international strategy has been employed by the company which entails that
the beer is first manufactured for the company’s local markets and therefore it trades the beer
internationally consideration minimum domestic modification. This exhibits that the beer that the
company produces is of high quality thus meeting international standards (Chin et al., 2010).
Therefore they do not encounter significant number of rivals which shows that there if reduced

Carlsberg International Strategy 6
pressure making its cost structure become constant. Carlsberg intends to consolidate the process
of making beer through conducting of extensive research in its country while introducing
production and promotion roles in any country it works in. The main reasons why the Carlsberg
Company selected an international strategy is due to:
1. In order to enhance profit and sale increase through trying different markets and
promoting in the local markets (Ghani, Kerr and O'Connell, 2011).
Since the company’s exports are distributed to countries in South America since there is no
brewery industry there while in many occasions by the licensing concurrence such as
Charrington and Tetley in the UK being granted the permission of brewing and bottling
Carlsberg brand beer and on the other hand the country acquires some royalty payment.
Additionally, the company formed cooperation with the Scottish and the Newcastle together with
the brewery industry in Hong Kong which is now owned by Carlsberg. Carlsberg merged with
the Ruborg, Orkla, and the Danish rival of Norway which currently are Carlsberg property
(Moretto, 2008).
According to Lai and Chen (2014), a company involves itself in competitive markets cautiously
through relying on its potential partners who reduces additional data, perils, and some fears such
as some hindrance to trade which is linked to distant involvement. The company is in a position
of studying the distant marketplace through joint ventures thus being in a position of overruling
the other companies.
2. Carlsberg domestic markets share fortification
Since the company will be operating in foreign markets, it will be in a position of drawing away
other rivals business through providing customers different selections thus making competitors

Carlsberg International Strategy 7
realize that they will encounter the same challenges if they ought to attack Carlsberg home
marketplace. Moreover this is a strategy that Carlsberg can employ in eradicating various
malpractices in within their home country (Stubbs, 2011). It shows that working within other
country’s territories minimizes the impact of economic swing for example the downturn within
the domestic home country. In spite of Carlsberg apparent rapacious intuition of total governance
and possession, other potential stakeholders merge with Carlsberg due to:
 Outstanding profits from intangible assets – For example based on the licensing process
the licensee always possess the permission over Carlsberg assets which include its
trademarks, exclusive rights, and processes. This correlates to other co operations since
the prospective ally gets down to be acquainted of every process concerning the business
(Aribarg and Arora, 2008).
 Carlsberg will provides its allies a vast variety of products and services – This aspect is
shown where Carlsberg Company provides privileges such as logical properties, through
the cooperation the partner is in a position of exploiting more businesses opportunities
because not only will be put on the market their individual products but also Carlsberg
Company’s products, thus showing that their prospective buyers will have a wide range
of products to select.
 Chance to be sanctioned to Carlsberg promotional processes – During the processes of
Carlsberg advertising the partnered company’s products may be shown in situations
where there is merging.
 Equality sharing of financial risks and fixed costs – this means that from the partnership
that company can strive hard solving problems that may lead to failure of the business

Carlsberg International Strategy 8
until the company meets certain standards (Geppert et al., 2012). This often occurs
where there is a joint scheme.
 Pooling ideas which creates alternative resolutions through cooperate partnership with
Carlsberg – It happens when different partners forms cooperation with Carlsberg
(Birdsall, Kelly and Moteetee, 2007). Therefore, every customer will be enthusiastic
since their problems would have been handled easily which will thus develop consumer
service practice.
V. Acquisitions Targets and Strategic Responses
According to the data in chart 1 below, it is evidenced that Carlsberg internationally owned about
7.5% by volume. It is the 4th leading brew manufacturing industry after Heineken. It has an
average capital of over 80 billion (Danish Kroner). During 2009, the company acquired about
15.8% profit margin of its total operations worldwide.
Anheuser-
Busch
InBev
SAB Miller Heineken Carlsberg China
Resource
Enterprise
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Biggest Global brewers Market Share
Biggest Global brewers
Market Share
Chart 1: Shows global share by volume of the largest brewing corporation in the world
According to the chart it shows the possible upcoming achievements for other partnered
breweries for example AB Inbev will be based on the below factors:

Carlsberg International Strategy 9
1. The largest brew manufacture industry in the market will aim at amplifying the
company’s sales in the market which will instantly lead to uplift in the pricing ability. A
firm that lacks great pricing aptitude in that case a rise in price of the subsequent product
will decrease the need for the product being offered.
2. Since Carlsberg industry has been in the market for so long it has gained vast knowledge
of the local markets where it has established its own brewery industries, therefore, other
groups would love to access the same entry mode in these markets (Dunne et al., 2009).
3. Carlsberg is considered as a precious brand; therefore larger groups will be focused in
attaining intellectual property for example, exclusive rights, research and development of
laboratories with an aim of product development, trademarks, databases which are hard to
create, and production processes.
4. Since Carlsberg is the fourth largest brewery group around the world there in order to
minimize competitors from other markets then other smaller groups such as AB Inbev
can be purchased in order to minimize the level of competition.
5. Besides it is often hard to acquire various consumers and make them adjust to other
brands since they are always trustworthy and love the brands. Therefore the best way to
go about that is by purchasing the brewery industry itself. For instance, in some regions
where Carlsberg dominates with the absence of the larger brew groups, they acquire the
markets trust by buying the whole brewery firm since all consumers are used to products
produced by Carlsberg.
6. The competitive groups might desire to gain special rights to Carlsberg sales and its
supply channels. Through its possession it can be used for the supply of its own products.
Various sales techniques employed can be used in profiting the telemarketing industries.

Carlsberg International Strategy 10
VI. Barriers
A greater turnover rate brought about by conflicts that would have resulted due to
Carlsberg employees being in odds with the obtaining assembly’s methods of operation thus
ought to abandon the firm. In the long run, it will negatively affect the operation of the brewery
industry since the management and professionalism would have vanished and with Carlsberg
will discard during the event of being sold (Homburg, Schäfer and Schneider, 2012).
Amalgamation with other firms is hard because of the outstanding disparities within the
management and the company’s cultural norms. It is will result to slow decrease through the
assimilation of such operations. A factor that could severely affect this is national culture which
should be considered in advance.
For instance, disparities in the languages being used can be factor that would result in the
rejection of contracts between Carlsberg and AB Inbev which will negatively affect the business.
Additionally, Carlsberg is a large company, therefore is may refuse any efforts to be sold which
will make it lose its brand name. These companies may go an extra mile of placing bids based on
buying other breweries and a way of defense against other larger companies. Therefore this will
enable it acquire many shares which makes it hard for other companies to purchase it without
ant-trust; a policy that protects every enterprise from any unusual practices which makes it very
hard for any other company to access it (Harrington, Rayner and Warren, 2012).
VII. Portfolio Management and Consolidation
Carlsberg has employed an international strategy that is very accommodative with over
500 brands which is probably right since it will generate more profits thus being in a position of
harvesting cost reductions which would have come from various learning influence and

Carlsberg International Strategy 11
economies of scale which will have a low cost approach based on a global standard (Ceria,
Saxena and Stubbs, 2011). This means that this type of international strategy being deployed
will be accommodated in places where burly pressure for minimization of cost and the
stipulation of local responsiveness in minimum. Generally, Carlsberg comprises of about 500
brands and they always modify their products in small scale in order to achieve certain local
conditions and the modification always entails duplication of functions, and shorter production
runs which is purposed to increase expenditure (Omoto, 2012).
VIII. Conclusion
Conclusively, there has been great progress over the past years at Carlsberg Company
based on its rapid expansion both internally and externally. Using the international strategy
Carlsberg has been able to grow and expand to the outside marketplace. Due to the expansion
and growth of the company it will be easy adjusting the international strategy which will boost
its financial situation and enable it perform highly in the international marketplace. To conclude,
I strongly believe that Carlsberg ought to uphold their current international strategy with their
objective to pursue both the Western and the Northern European markets. Although it is a risky
market but it comprises conditions where Carlsberg Industry can be established. Therefore, there
international strategy should be considered as a long term strategy in order to attain maximum
profits.

Carlsberg International Strategy 12
IX. Reference
Aribarg, A. and Arora, N. (2008). Brand portfolio promotions. Journal of Marketing Research,
45(4), pp.391-402.
Birdsall, K., Kelly, K. and Moteetee, M. (2007). Pioneers, partners, providers. Braamfontein,
South Africa: Open Society Initiative for Southern Africa.
Chin, V., Brown, R., Dandurand, Y. and McAskill, E. (2010). Handbook for prison leaders. New
York: United Nations.
Dzikevičius, A. and Šaranda, S. (2011). Smoothing techniques for market fluctuation signals.
Verslas: teorija ir praktika, 12(1), pp.63-74.
Dunne, T., Klimek, S., Roberts, M. and Xu, D. (2009). Entry, Exit, and the Determinants of
Market Structure. Cambridge, Mass: National Bureau of Economic Research.
Geppert, M., Dörrenbä cher, C., Gammelgaard, J. and Taplin, I. (2012). Managerial risk-taking in
international acquisitions in the brewery industry: Institutional and ownership influences
compared. British Journal of Management, 24(3), pp.316-332.
Ghani, E., Kerr, W. and O'Connell, S. (2011). Local industrial structures and female
entrepreneurship in India. Cambridge, Mass.: National Bureau of Economic Research.
Harrington, S., Rayner, C. and Warren, S. (2012). Too hot to handle? Trust and human resource
practitioners' implementation of anti-bullying policy. Human Resource Management Journal,
22(4), pp.392-408.