Business Strategy of Carlsberg

The strategies that are formulated by business organizations are based on the ways by which they plan to continue their operations in the international market. The multinational organizations need to devise successful strategies so that they are able to operate in a profitable manner in the international market. Global organizations thereby need to formulate different strategies for the different needs in international markets. The organization that is taken into consideration for this analysis is Carlsberg which is a global brewing organization and is located in Eastern Europe, Asia and Western Europe (Brewster 2017). The company was established in the year 1847 and employs greater than 40,000 people in the various locations. The organization was taken over by the Carlsberg foundation after the death of the founder in the year 1887. The flagship brand of the company is Carlsberg Beer which is provided to customers all over the world. The other major products that are brewed by Carlsberg are, Tuborg, Kronenbourg and Somerby Cider (Carlsberg Group. 2018). The organization operates in various areas of Eastern Europe under the name of Baltic Beverages Holding. Carlsberg had entered this area with the collaboration of Baltic Beverages. The Aldaris Brewery was taken over by Carlsberg to enter the marker of Eastern and Western Europe in 2008. St. Killain Import Co. is responsible for the distribution related activities of Carlsberg in the United States. The products of Carlsberg are exported to countries like Hong Kong and China (Carlsberg Group. 2018).

The analysis will be mainly based on the various strategies that have been implemented by Carlsberg in the various areas of its operations. The different areas which will be analysed in the report are the business strategy and the corporate strategy of Carlsberg and the international acquisitions that are made by the company. 

Carlsberg has always aimed at providing the best quality of beer to the customers by pursuing the perfection that is needed for the production of better quality items. The celebrations of any kind are not complete without the products that are manufactured by the company in the market. The company also aims at creating a better future for the customers and the other stakeholders. Carlsberg has delivered sustainable growth to shareholders and the employees and they have also been provided with high value (Rugman and Verbeke 2017). The new strategy that has been devised by the company is mainly focussed towards four important priorities which are, deriving the growth in various segments and areas, strengthening position of Carlsberg within the industry, trying to derive growth in areas and segments where long-term opportunities have been detected and the creating a winning type culture in the organization (Purce 2014).

Corporate Strategy of Carlsberg

The consumption of beer in the various areas of the world have increased in the past few years. The organization has thereby gained fourth position in the industry in the entire world among its competitors in the industry. The products of the company are exported to other countries where Carlsberg does not operate its breweries. The product portfolio of the organization contains 500 major brands (Galpin 2018).

Carlsberg has applied the strategy of producing the beer in the domestic market and then supplying the same to the various countries. The levels of customization that are done to the products that are supplied to other countries are low. The company has concentrated its activities in the areas where the sales are high and it has high opportunities of growth as well. The organization exports its products to those countries where it has not been able to set up breweries. The production based process of the company is mainly centred in the home country of the company (Gazzola and Colombo 2014). The international business based strategy pf Carlsberg has been selected due to the following reasons,

• The company aims at increasing the profit and the sales with the help of expansion into the new market areas. The increase of sales in the existing markets are also a major strategy of Carlsberg. The objective of increasing sales in different areas is achieved by exporting the products of the company to various areas (Hitt et al. 2017).
• The other major reason behind implementation of the international strategy is the protection of the market share which the company holds in the home country. The organization understands that is easier to retain the shares in the domestic markets rather than trying hard to acquire the international market (Hitt, Li and Xu 2016).
• The company also aims at diversifying the functions so that the uncertainties are reduced and the risks related to the domestic market of the operations can be decreased as well.

The second level and the middle level of the business strategy of the organization is based on diversification goals of Carlsberg in the international and the domestic market as well. The organization has maintained the strategy of brewing products in the domestic areas of operations. The strategy of Carlsberg has been successful for the efficient operations of the company in various international areas, especially in Europe (Tallman and Pedersen 2015). 

The international business strategy that has been formulated by Carlsberg has not been successful in the operations of the company in China. The political and the social issues that have been faced by the company in this area has been a major reason behind the failure of this strategy. The organization has thereby failed to maintain similar strategy and profitability in different areas of its international operations. The organization has targeted the market of Western China for the purpose of providing the products that are manufactured by them. The operations of Carlsberg in Russia has also been quite successful as the organization has to face high levels of competition in the industry (Luthans and Doh 2018). The company has thereby faced many political threats in the Russian market which has caused the huge reduction of sales of the company in this area.

Carlsberg has developed a new and innovative corporate strategy which can be helpful for the growth of its revenues in the coming years. The strategy of Carlsberg has been named as SAIL’22 and the has been declared by the company in the year 2016. The success of the organization has been measured by the sustainability of the growth in an organic manner. The growth of the company is mainly based on the suppliers and their capabilities to provide the best materials that are required for brewing high quality beer (Öberg 2014). The strategy has been implemented in the organization in the year 2016 in all the Asian operations of Carlsberg. The local operations based priorities of the company have been decided in a strategic way by the senior leadership team of Carlsberg. The position related to the care, value and the growth of the company is a part of the corporate strategy of the company. The seven major priorities of the organization include,

• The growth of Carlsberg in mainstream areas with brands like, Carlsberg Green Label and Carlsberg Smooth Drought.
• The “Win in Store” concept has also been implemented by the company for the purpose of improving the process of store execution (Deng and Yang 2015).
• Another concept that is a part of the strategy is “Fund the Journey” which has been implemented for efficiencies related to delivery in the areas, such as, supply chain efficiency, value management and operating expenses.
• The other priority which is based on premium brands of the company is related getting huge success in the marketing based processes of these brands. The premium brands of the company thereby include, Asahi Super Dry, Connor’s Stout Porter, Kronenbourg 1664 Blanc.
• The plans of the company related to building new revenue streams is also a part of the corporate strategy.
• Achievement of the organic growth of the company.
• Delivery of high and stable dividend for stakeholders (Sarala et al. 2016).

International Acquisitions by Carlsberg

The priorities of the organization have been developed and executed in operations of Carlsberg in Malaysia and Singapore. The strategy can prove to be successful for the operations of the company in various areas like, China and Russia. The SAIL strategy can be implemented in a successful manner in all the global locations and operations of Carlsberg (Junni et al. 2015). 

Carlsberg Group has divided its operations in three major market areas which are, Asia, Northern and Western Europe and Eastern Europe. The entry of the company in Russia was based on the help that was provided by Baltic Beverages Group and further Carlsberg went on to acquire the entire organization. Carlsberg has created a suitable position in the areas like, Ukraine, Baltic countries and Russia. The major shares of Baltic Breweries are held by the Carlsberg Group. The company has however faced major issues in the areas like Uzbekistan due to the factors like unreported revenues and the illegal processes of production (Ning et al. 2014). The organization had to thereby withdraw its operations from this country and employees were also sent on leave without pay. The Aldaris Brewery was acquired by Carlsberg in the areas of Western and the Northern Europe. The subsidiary of the organization in Poland has been named as Carlsberg Polska. Carlsberg also gained 100% shares of the organization named Okocim Brewery in Poland. The company has further gained the shares of the Falon Brewery in the area of Falkenberg. The brands that are operated by the company in Norway are. Arendals, Dahls, Ringnes, Frydelund, Tou and Nordlands. The products of the company are provided to the customers in the US by the organization named St. Killian Import Co. The operations of Carlsberg had started in Europe with the exportation of beer to China (Elango, Dhandapani and Giachetti 2018). Two breweries were owned by Carlsberg in the areas like, Huizhou and Shanghai. The beer manufactured in these areas are supplied to the regions like, China and Hong Kong. The company also became a major stakeholder in Lhasa Brewery in 2004. The headquarters of the company is India is named as Carlsberg India Pvt. Ltd. The organization had entered the booming Indian market by the process of foreign direct investment (Carlsberg Group. 2018). The products manufactured by Carlsberg are available in many states of India. Carlsberg has faced major issues in the areas like China and Russia where the strategies formulated by the company had failed. The revenues of Carlsberg need to be improved in this area so that the organization is able to maintain its position in the industry in an effective manner. 

Issues Faced by Carlsberg in China and Russia

Carlsberg Brewery provides wide variety of products to the customers all over the world. The products of the company range from light strength to mid strength beer products. The company has always employed a multi-market strategy to operate successfully in all the areas. The strategy related to the products of Carlsberg are related to the sponsoring activities and the other promotional activities as well. The quality of Carlsberg Green Label has been promoted to the various market areas effectively. Carlsberg A/S foundation manages and operates all the areas of the company. The departments of the Carlsberg Foundation are responsible for collecting the funds (Carlsberg Group. 2018). The operations of the company in the various market areas are thereby managed by Carlsberg foundation in an effective manner.

Conclusion

The report is concluded by stating that Carlsberg Group has developed the effective strategies that are based on the corporate levels and the business levels. These strategies are based on the improvement of the operations of Carlsberg in the regional and the domestic markets. The company has however not been successful in some of the major areas of its operations which had caused a loss of revenues in these areas. The highly growing markets of China and Russia has been the most problematic for Carlsberg and its profitability. The strategies that had been initially implemented by Carlsberg therefore need to be changed for the future growth of the company 

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