This Study Resource Was: Strategic Management (BUS 4476) Case Analysis

Strategic Management (BUS 4476)
Case Analysis
Case Name: CARLSBERG
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Group members: Vinh Nguyen 1391585
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Minh Le 1391501
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Date: November 18, 2017
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Carlsberg Introduction
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Carlsberg founder Jacob Christian Jacobsen was born in 1811 in Copenhagen. He

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then went to Bavaria where he learned the brewing technology for Carlsberg
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brewing. In summer 1845, with two yeast spaten box were contained in a
homemade box, he boarded a carriage back to Denmark. Carlsberg is ranked 5th

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in the world after Inbev, SABMiller, Anheuser-Brusch, Heineken in 2007.
Carlsberg’s vision was ‘’ our bands will be the consumer’s first choice and we
will lead our industry in profitability and growth through a culture of quality,
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innovation and continuous improvement ‘’.Core business of Carlsberg A/S were
brewing, marketing, selling beer. Carlsberg opened first brewery at Copenhagen
in 1847. After that time, the first foreign brewery in Malawi in 1688. Carlsberg’s
area of operation focus on Western European, and the they want to grow Eastern
European and the emerging Asian market. They want to have strong position in
Asian market and they will build strategy long- term in this place.
In 2007, the company had 33,000 workers in the around the world with net
revenue about 6,000 million, they have had great strategy to enter new market as
well as emerging market.
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1. Conduct an industry environment analysis. Is Carlsberg A/S in an attractive
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industry? rs e
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 Industrial environment is an industry with diversified products as well as service.
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It may be the same in terms of design and quality; they must compete harshly to
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capture the market. With companies in the industry, mergers or acquisitions by
large companies are inevitable.

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 The global brewing industry in the mid-2000s tended to consolidate strongly,
moreover, the number of brewery drops continually for various reasons. By 2007,
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the beer industry was controlled by the world's four largest breweries (inbev,
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SABMiller, Anheuser-Busch, Heineken).

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This consolidation process can be change the consumer's beer habit as well as increase
the cost of production. In the European and US markets, people are more health
conscious, beer consumption has decreased due to increased health awareness and
increased competition from wine and spirits, while the Eastern market Europe and Asia
are booming. Moreover, because of rising input costs such as glass, aluminum and hops,
large mills are seeking to consolidate and increase market share as they look for
economies of scale related to everything from production to advertising.
As the world market consolidates, Carlsberg acknowledges it is unlikely to become a
truly global company because North American and South American markets have been
lost to other well-known and potential brewers. In addition, they have to compete with
leading breweries such as Inbev, SABMiller, Anheuser-Busch, Heineken.
In my opinion, with the variety of products as well as the price, the choice of products
will be easier with customers. For example, they can use wine instead of beer or other
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products.
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Based on the above analysis, I think Carlsberg is not an attractive industry because it has
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so much uncertainty in the market as the products, prices and competition of the top four
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beer companies as well as new companies. However, having the right policies and
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strategies helps Carlsberg grow in the market and get top 5 in the market.
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2. Identify the reasons for Carlsberg A/S’ mergers and acquisitions (M&As)? What
type of the
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M&A strategy does Carlsberg A/S use?

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a. Identify the reasons for Carlsberg A/S’ mergers and acquisitions(M&As)?

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According to what I read the case in the book, I think there are much reasons for
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Carlsberg A/S M&A, and they are:
 The first reason for Carlsberg merger and acquisitions is Carlsberg can learn and
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develop new capabilities that are only available in other markets such as Russia
and China. This helps Carlsberg find and develop weaknesses that need to be
overcome in the operating system as well as the production of new items. For
example, when buying BBH, Carlsberg introduced to the world a new brand was
upgraded from the old brand is Baltika with a delicious taste for barley. This
reduces the risk of failure when creating a new product on the market because
Baltika has been on the Russian market since then.
 Besides that, another reason for M&As is easy for Carlsberg to break down entry
barriers to enter the markets of other countries thereby facilitating the
development of their goods in those countries. In the case of Russia, Russia is
considered the fastest growing beer market in the world, so the possession of
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BBH has helped Carlsberg grow back and continue to be strong beer company in
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terms of revenue and output in the world.
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After implementing M&A, both parties can exploit mutual advantages, increase
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market share, utilize customer relationships, sell products and services, thereby
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enhancing competitiveness and create new business opportunities.

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 They were losing ground as one of the strongest brands in the world at beginning
of the 2000s. So they need to buy shares of other well-known brewers to grow
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there. companies. for example, Carlsberg A / S acquired Orkla ( with 60 percent of

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the new entity and owns a 50 percent stake in BBH and eventually gains 100%
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control of BBH.
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This table shows the key financial number that it has not grown very much since
2003:
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Reference: Exhibit 1 in case 4: Carlsberg In Emerging Markets
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a. What type of the M&A strategy does Carlsberg A/S use?
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In my opinion, the M&A strategy used by Carlsberg A/S is that they have acquired all
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the well-known companies in the same industry in different countries such as Russia
and China. This makes it easy to grow your company in overseas markets and
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minimize the risk you will get in these markets.
3. Describe Carlsberg A/S’ international corporate-level strategy

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Carlsberg's international-level strategy A / S is based on development in many
different areas, with clear strategies for investment. First of all, to invest in new
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markets, they used the M & As strategy. Initially, they had gained positive part.
Using this strategy, Carlsberg A / S have learn knowledge to gain competitive
advantages with local company. First of all, Carlsberg A / S started in Western
Europe after that was United States , and then they moved to emerging markets
in Eastern Europe and Asia. Our goad focus on value creation and profitable
growth. In Western European strategy was '' improved profitable by through
innovation and streamlining''. In Eastern European, they were rapid growth and
higher earnings while in Asian market, Carlsberg was long term growth through
building up market position. CEO Nils Smedegaard Andersen Carlsberg say that
'' we want to ensure that we have positions with future growth potential, and we
will be relatively patient ''
To know detail about Carlsberg 'strategies, we can see in exhibit 5 Carlsberg A/S
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Regional strategies table in eBook.
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4. Integrating the results of the analysis, do you think Carlsberg A/S’ decision to go
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into
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the emerging markets is a good decision? Summarize your findings and propose
recommendations that could improve Carlsberg A/S’ market performance in the

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industry. ( Minh Le – 1391501)

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a Integrating the results of the analysis, do you think Carlsberg A/S’ decision to go into
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the emerging markets is a good decision?

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Throughout the data and analysis of the above questions, I think Carlsberg A/S's
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decision to enter the emerging market is a good one. Because, as I and my

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teammates have analyzed, entering the emerging market has benefited many
Carlsberg from the development of their beer market but also made them easy to
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access the foreign markets easily and minimize certain risks.
b Summarize your findings and propose recommendations that could improve
Carlsberg A/S’ market performance in the industry.
By what I read in the case and the figures as well as the tablets, I see the CB made
a wise decision when implementing the M & A campaign because that strategy
has helped the CB company to develop easily in the market. Other schools. But
CB is also unreasonable by focusing solely on Eastern European and Asian
markets which are also attracting the world's top beer companies.
We also analyze the brewing industry environment in the mid-

2000s. Carlsberg's M & As a strategy, as well as other breweries, is also
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strong. Moreover, there are many changes when the demand for use of the
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customer changes, the cost to invest a brewery is also more expensive.
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Carlsberg has used the M & As a strategy to expand the new market and they
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do not spend the time to build their brand.
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We analyze the strategies of market development in Carlsberg, first of all,
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in Western Europe they want to improved profitability through innovation

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and streamlining'' secondly, in Eastern Europe they were rapid growth and
higher earnings'' and then, in Asia they want to build new market in Long-
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term growth through build-up of market positions'' and the competition

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from other top brands.

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In my opinion, in order to improve the market performance of Carlsberg A/S in

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the industry, they first need to improve and enhance existing or developing items
to boost customer demand. Goods that promote the production. They should then
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use local people who have experience in local or regional goods and try to
advertise other areas. In addition, focusing on Eastern Europe and Asia will make
the development of Carlsberg is not developed strongly because in these two
markets are many powerful companies in the industry such as Heineken,
Anheuser-Busch, InBev ... So Carlsberg company need to develop in many other
markets in the world to raise the brand and product to attract the attention of
customers. Strategies in Eastern Europe and Asia are only successful if the current
CEO can afford to make shareholders feel secure about their long-term goals and
can earn a high profit each year.
Reference: Reference:
https://jigsaw.vitalsource.com/api/v0/books/9781305856288/print?from=C-41&to=C-50
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https://carlsbergvietnam.vn/vi/ve-chung-toi/lich-su-hinh-thanh/tap-doan-carlsberg/
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Strategic Management (BUS 4476)

Case Name: CARLSBERG

Carlsberg founder Jacob Christian Jacobsen was born in 1811 in Copenhagen. He

homemade box, he boarded a carriage back to Denmark. Carlsberg is ranked 5th

in the world after Inbev, SABMiller, Anheuser-Brusch, Heineken in 2007.

brewing, marketing, selling beer. Carlsberg opened first brewery at Copenhagen

well as emerging market.

capture the market. With companies in the industry, mergers or acquisitions by

large companies are inevitable.

 The global brewing industry in the mid-2000s tended to consolidate strongly,

SABMiller, Anheuser-Busch, Heineken).

economies of scale related to everything from production to advertising.

As the world market consolidates, Carlsberg acknowledges it is unlikely to become a

leading breweries such as Inbev, SABMiller, Anheuser-Busch, Heineken.

M&A strategy does Carlsberg A/S use?

a. Identify the reasons for Carlsberg A/S’ mergers and acquisitions(M&As)?

Carlsberg A/S M&A, and they are:

Baltika has been on the Russian market since then.

barriers to enter the markets of other countries thereby facilitating the

development of their goods in those countries. In the case of Russia, Russia is

enhancing competitiveness and create new business opportunities.

there. companies. for example, Carlsberg A / S acquired Orkla ( with 60 percent of

minimize the risk you will get in these markets.

3. Describe Carlsberg A/S’ international corporate-level strategy

Carlsberg's international-level strategy A / S is based on development in many

Using this strategy, Carlsberg A / S have learn knowledge to gain competitive

advantages with local company. First of all, Carlsberg A / S started in Western

growth. In Western European strategy was '' improved profitable by through

will be relatively patient ''

recommendations that could improve Carlsberg A/S’ market performance in the

industry. ( Minh Le – 1391501)

the emerging markets is a good decision?

decision to enter the emerging market is a good one. Because, as I and my

access the foreign markets easily and minimize certain risks.

b Summarize your findings and propose recommendations that could improve

Carlsberg A/S’ market performance in the industry.

CB is also unreasonable by focusing solely on Eastern European and Asian

We also analyze the brewing industry environment in the mid-

in Western Europe they want to improved profitability through innovation

term growth through build-up of market positions'' and the competition

from other top brands.

In my opinion, in order to improve the market performance of Carlsberg A/S in

the development of Carlsberg is not developed strongly because in these two

Anheuser-Busch, InBev ... So Carlsberg company need to develop in many other

can earn a high profit each year.

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