INTERNATIONAL BUSINESS

BRL Hardy: Globalizing an Australian Wine Company

Group 2
Members:

MANOJ KUMAR PGP/22/142 manojk22@iimk.ac.in

MEGHA PGP/22/143 megha22@iimk.ac.in
MEHAK KHURANA PGP/22/144 mehakk22@iimk.ac.in
PREETY KUJUR PGP/22/153 preetyp22@iimk.ac.in
NEHAL IMAM PGP/22/145 nehali22@iimk.ac.in
 1. How do you account for BRL Hardy's post-merger success?

Ans: Following are the factors that can be identified as the contributor of the remarkable success of BRL Hardy
following its merger:
a. Concentration on Home Market:

At the time of merger both the companies BRL and Hardy were bleeding financially. Top management set itself to
consolidate first in financial terms. Australia also happened to be the place form where vast bulk of the profit was
originating. This led BRL Hardy to concentrate on the domestic market to set its financial fundaments correct.
b. Protect the Bulk cask and grow with Branded Bottle:

To hit upon the financial distress that both the companies were facing they devised a balanced strategy. As BRL
had the specialization in bulk cask selling of wine as compare to Hardy’s competency in selling branded wines,
Millar decided to vision the company growth in Hardy mold and to just try and protect the BRL mold. They also
understood that Quality is the only savior for the support of brands.
c. First getting the merger efficiency and then implementing new strategy:

Merger was between two completely different companies in terms of their product profile and also in terms of their
managerial styles. So to work together for a successful venture it was of prime importance that sufficient amount
of concentration should be given to make the merger efficient before launching new strategy
d. Change in company’s culture and management style:

In ex-Hardy team, mangers’ approach towards coordination was HQ centric. Specially the midline managers and
subsidiary mangers. They were mere implementer of strategies rather influencer of strategies.
Millar wanted to change it. He wanted to have more decentralized environment were ideas can flow from all sides.
Manager’s post was envisioned as entrepreneurial. He wanted 20 decisions to be made by 80% success then 1 or
2 decisions with 100% success.
e. Earn your stripes:

Though Millar vouched for a decentralized environment but at the same time he believed in controlled decentralization.
Hence for that he gave freedom to those who proved themselves by doing something considerable. This increased
the sense of purpose and motivation in mangers to excel in their respective locations
f. International Relaunch:

While the Initial concentration was the cleanup of domestic operation problems to overcome the financial distress, Millar
also appointed Davies is see and device a strategy to consolidate its international position.
Davies started it by the marketing slogan of “Making Quality Wines for the World”. He rationalized the wine product
line for export to increase the focus on few lines and hence better performance.
g. Strategic shift-International wine company instead of Quality Exporter:

Down the line company didn’t try to bind itself as just an Quality Exporter, rather he tried to envision itself as an
International Wine Company something that was nonexistent in the world arena.

Q2. What do you think are the characteristics of a 'global' company that Australian HQ wants for BRL Hardy?
Ans: The HQ wanted brand to be designed as an Australian brand with international appeal.
• BRL Hardy initially focused on multi-domestic corporate strategy by catering to local responsiveness, but presently
it is trying to become a truly international wine company by adopting a global standardization strategy
• This shift could also be seen through their intent of centralized decision making vis-à-vis decentralized decision
making

Q3.Do you think Christopher Carson and his UK team is following in the direction? How or how not?
Ans: UK was a part of the emerging new world trends, which marked drastic shifts in consumer behaviour. Consumers
appreciate “Value for money”, tend to go for recognisable brand or grape variety.
• The European subsidiary has marketing and distribution competence and is strategically important as is has a
growing market potential
• The subsidiary works as a partner with the Australian management giving it a lot of autonomy in operations

Q4.What is the tension between Stephen Davis and Carson? How does Steve Millar want BRL Hardy's UK business to
shape up? How effective is his role in BRL Hardy?

Ans: BRL was bulk oriented seller and inclined towards centralization where as Hardy was having local approach and
emphasized the importance of retailer relations when deciding how to label and position the brand

Davies’ belief: Centralized Management

• Davies was part of BRL before merger

• According to Davies Reynella headquarter had to be global brand owner
• Too much decentralization would lead to loss of control over the brand

Carson’s belief: Decentralized Management

• Carson was part of Hardy Co. before merger and used to work in decentralized organizational structure
• U. K. market was very different from Australia market
• Retailers’ own labels dominated in U.K. market
• For managing progression distribution is key, retailers support is important & labeling plays a vital role
• He didn’t want to lose the autonomy over operations in U. K. market

How Steve Miller handled the differences

• Millar’s objective from the beginning was to create a decentralized approach to expanding the newly merged
company but to still maintain management accountable
• Davies & Carson were of conflicting opinion, according to Miller positive conflict is good for organization & he
was open to new & creative ideas
• Carson was reporting to Davies for marketing and brand strategies whereas was submitting profit reports directly to
CEO Steve Millar
• His role in negotiation between Davies and Carson could be viewed as indicator of weak executive management

Q5.Should Millar approve Carson's proposal to launch D'Istinto? Why or why not?

Ans: The cannibalization effect and lack of sales team’s strength in carrying out another brand makes a strong case
against the launch of D’istinto. As no matter how strong brand proposition is on paper you can’t jeopardize your
existing successful brands. Here the probable cannibalization will lead to same effect.

At the same time as Carson himself agreed that European wine market needs more of Pull strategy then the push strategy
for a wine to succeed. Hence it calls for strong sales team. Whereas case clearly mentions that sales force strength
was not as such as they could carry one extra brand. Hence launch of D’istinto in such a resourced constraint
scenario with a market in which Pull works better then push doesn’t make much of a case for itself.

Hence D’istinto should not be launched.

Q6. If you were Millar what would you launch- Kelly's Revenge or Banrock Station? How consistent would your
decisions be with the past?

Ans: Launch Banrock:

Reasons:

1) Parent Company’s management was against Paul Browne’s controlling nature

2) Launching Kelly’s Revenge would mean excessive decentralization of branding and marketing which was against
the global strategy they were trying to achieve
3) Banrock Station can be re-positioned to appeal to UK consumers. The marketing campaign can be locally adapted
4) Kelly’s Image ran the risk of seeming too Australian, thus alienating and failing to attract consumers in the UK,
particularly among the young crowd
5) Kelly’s revenge cannot be established as a global brand, hence would be excessive resource usage for one particular
market

Q7.If you were Carson which among Kelly's Revenge and Banrock Station would you launch and why?

Ans: Launch Kelly Revenge

Reasons:
1) Kelly’s aggressive/flashy label will be good for targeting youth or first time consumers in the growing wine market
in Europe
2) Banrock had dull & colorless label design and its eco-friendly position will not appeal to European youth
3) Choosing Banrock would mean Ignoring local knowledge, underutilizing UK subsidiary’s strengths, demotivation
for UK management
4) Banrock also had similar values as D’istinto (warm, relaxed), hence there may be a conflict if both are launched
5) Banrock may also pose risk of currency fluctuation greater, price equality would be difficult