The Brewery Group Denmark Essay

Words: 6627
Pages: 27

Exploring Corporate Strategy

The Brewery Group Denmark: Faxe, Ceres and Thor
Flemming Agersnap
The case study explains the strategic moves of Brewery Group Denmark (BGD), a small Danish brewery fighting for a position in a world market. The case shows how small companies can co-exist with giant competitors in an international context and how a coherent international strategy can be built whilst allowing for different local strategies. BGD is an example of a firm which has achieved a distinctive position in a highly competitive industry by focusing on importing Danish beer into selected markets, through a network of alliances. The case provides an opportunity to consider the strengths and weaknesses of the company’s
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The co-operation led to export to Italy based on the transportation of meat and beers in refrigerated vans. Ceres joined this co-operative venture at the invitation of the slaughterhouse, but in 1996 beer export accounted for 75 per cent of turnover and more than 95 per cent of profit – and the joint sales company in Italy had been bought fully by BGD, though still acting as agent for the slaughterhouse. Claus Nielsen commented: We are the largest exporter of beer to Italy and dominate the ‘duplomolto’ [strong beer] segment. Our success has been largely due to our marketing strategy. For the last 30 years we have been concentrating on the on-licence trade – restaurants, discos, bars and so on. We have achieved a very strong position in such outlets, which has given us a strong brand presence in Italy. In these outlets we have strongly promoted out bottled Ceres brand at point of sale. We would prefer people who go to restaurants and discos to be holding our bottle with our brand name on than drinking draught beer out of a glass without a brand name on it. In the last ten years we have also started to develop our presence in the off-licence retail trade – the shops selling beer. As in so many markets, the retailers have become more powerful, but a good indication of our brand strength is that we are able to resist the pressure they put on us for increased discounts. If they want to press us for such discounts, we simply refuse. They can delist us if they like, but