UNIVERSITY OF THE EAST

CALOOCAN
College of Business Administration

Ann Margarette I. Sambilay

BMG 114
BSAcT3H / MWF / 11:30-12:30
Dr. Rosalinda B. Lacerona
 I. TITLE OF THE CASE: Carlsberg in
II. TIME CONTEXT: 2007 (The Company is still operating in the present.)
III. SUMMARY/ABSTRACT: Emerging
Markets
Carlsberg was founded by J. C. Jacobsen, a philanthropist and
avid art collector. With his fortune he amassed an impressive art
collection which is now housed in the Ny Carlsberg Glyptotek in
central Copenhagen. The first brew was finished on 10 November
1847, and the export of Carlsberg beer began in 1868 with the export
of one barrel to Edinburgh, Scotland. Some of the company's original
logos include an elephant, after which some of its lagers are named,
and the swastika whose use was discontinued in the 1930s because
of its association with political parties in neighboring Germany.

Jacobsen's son Carl opened a brewery in 1882

named Ny (New) Carlsberg forcing him to rename his
brewery Gamle (Old) Carlsberg. The companies were
merged and run under Carl's direction in 1906 and
remained so until his death in 1914.
The author wanted to find an effective and
efficient strategy for the company to have a clear
competitive advantage towards their competitors.

A. VISION:

“Our brands will be the consumer’s first choice, and we will lead our industry in
profitability and growth through a culture of quality, innovation and continuous
improvement.”

B. MISSION:

“To be a dynamic provider of quality beers and it’s also bring its exciting brand,
innovative culture and committed teams which will brings people together and add more
enjoyment in life.”
 C. CORPORATE SOCIAL RESPONSIBILITY:

Together Towards ZERO

In 2017, we devised an ambitious new sustainability
programme, Together towards ZERO.

The programme expresses our vision for a better

tomorrow, at a time of serious challenges such as climate
change, water scarcity and public health concerns. It
consists of four ambitions: ZERO carbon footprints, ZERO
water waste, ZERO irresponsible drinking and a ZERO
accidents culture. Each of these is underpinned by individual
and measurable targets, leading up to 2022 and 2030.

D. AWARDS AND RECOGNITION RECEIVED:

IV. STATEMENT OF THE OBJECTIVE

To be able to develop the strategy of Carlsberg in the emerging market.

To be able to maintain their good relationship with their current business partners.
To be able to create more variety of their products to suit the taste and preference of
their consumers in different countries.
To be able to campaign for the health of their consumers even though their product
is contradicting to this objective.
To be able to dominate the beer-brewing industry.

V. CENTRAL PROBLEM

How can the Carlsberg dominate the drink brewing industry despite of their bad
acquisitions in the past?

VI. AREAS OF CONSIDERATION (SWOT ANALYSIS)

a. Bad acquisition. Carlsberg’s acquisition of

the BBH shares was the result of a troubled
and expensive partnership with Norwegian
a. Their most important markets were in the
Orkla ASA. In addition to this, before
Western Europe but they held a strong
Carlsberg had become successful in the
position in the growing markets of Eastern
western provinces of China, the company
Europe, Asia, India, Russia and China.
had spent plenty of their valuable time and
b. Their central strategy focused on the value
resources trying to enter the rich provinces
creation and profitable growth..
of southeastern China.
c. They widely accept the competition from
b. When they established the Foundation, it
other brewing companies. They made sure
hindered the quick release of the capital
that every country has its own strategy
and it blocked the potential fusions with
and focus suitable for the competition.
large, foreign breweries.
d. They created the Carlsberg Chill. This is a
c. Even though they seem to dominate the
brand designed for their Chinese market.
European and Asian countries, they cannot
This lead to a more profitable segment in
be considered a global company because
the consumers in China.
they easily lost their markets due to the
e. They have an optimistic CEO Jorgen Buhl
other well-known manufacturers of beer.
Rasmussen and he understands that the
d. Disagreement arise between the Carlsberg
company might not be earning a lot today
and Chang Beverages, this led to Carlsberg
from the new segments but in 5-10 years,
pulling out of joint venture. It is said to be a
this will be their major consumers.
violation of contract between them and the
f. They are able to establish a neat and
Carlsberg is forced to pay compensation of
accessible website for everyone in the
KR734 Million and this actually lead to bad
world.
company image.
e. The taste of their product can be easily
imitated by other and sell it in a lower price.
 a. People are more becoming health
a. Consolidation of foreign markets,
conscious and in the past years, their beer
acquisitions and joint ventures with local
consumption is decreasing.
firms. This will allow the companies to
b. The production costs are increasing. These
gain access to local brands, distributional
include materials for inputs like glass,
networks and local markets.
aluminum, hops and the beer ingredients
b. Creation of the new trend in the markets,
itself.
the flavored beers.
c. The competition among the manufacturers
c. The redesigning of their bottle and their
of wine and spirit drinks are as well,
logo because it is somehow similar to the
increasing.
looks of Heineken.
d. In some countries, vodka consumption was
d. Letting their brewers be trained in order
declining due to the new taxes being
to produce a more delicious beer using a
imposed to the liquors and this resulted
less inputs and alternatives.
into high prices of vodka.
e. Since there are countries that are still
e. Economic instability. Because of having
using vending machines, they can partner
low income and high prices of goods, the
with this businessman so that they can
individuals are most likely to spend their
have their products in their vending
money on more important things rather
machines.
than a beer.

VII. ALTERNATIVE COURSES OF ACTION (SWOT ANALYSIS)

a. Upon examination, they a. It is certain that it will

1. Carlsberg needs to
scrutinize the industry’s
stability prior to merging
with international or
local markets.
can be able to establish
contingency plans if their
market in other country
will fail.
b. This can lessen the
possibility of having
another bad acquisition.
c. It will help them to know
the suitable product for the
market like what they have
done in China in which
they created the Carlsberg
Chill.
d. Carlsberg will have enough
time to process the papers
and contracts to qualify in
the country’s government
rules and regulation.
e. They will know what
strategy will be effective
and efficient in the long
run of the business in that
certain area.
take a lot of their time and
Carlsberg may be left
behind by other big
brewing companies.
b. There is no stability in the
long run in the economy
because the taste and
preferences of their target
markets are constantly
changing.
c. They may know every
effective strategy but
there is no assurance that
they can dominate the
beer brewing industry.
d. There is a need to adjust
in every country to
beseem the market.
Launching new products
will be costly.
e. The government is
tightening the import and
export regulations
because of drug issues.
 a. Being in the business a. In the current business,
brewing for a long time San Miguel become
helps them gain an successful with this and
advantage on the right people might think that
amount of ingredients to Carlsberg are imitating
be used. this strategy.
b. This will be a new line of b. Even though they might
business for them and know every ingredient, it
people will be curious on will be costly to create a
2. Catalyze various products
their new products. new product.
suitable in all ages to
c. It will change the c. There is no assurance that
earn different markets.
stereotype image of the it will be popular on the
(e.g. flavored carbonated
company. masses because there are
drinks)
d. They can gain a new set of other known brands
partners because fast food prioritizing making the
chains can now put their product. (Coke, San Miguel
products in the menu Flavored Beer etc.)
especially if they decided d. There might only be few
to create a soda drink. companies wanting their
e. A more profitable market new products be aligned
since anyone can now taste with their stores because
their product. it is new.

a. Their over-all cost of a. The non-value segments

running the business will might be valuable in the
be lessened. right market and in time.
b. Upon removing the non- b. It is not easy to remove
profitable products, there the acquisition and
will be few products and products easily and the
choices for the customers. displacement costs will be
c. This will gave the enormous.
3. Remove the non-value
Carlsberg an idea on what c. Under the IFRS and GAAP,
added segments of the
innovation will be made discontinued operations
Carlsberg and
and what taste is popular needed to be reported
concentrate on the value
to their market. disposed or held for sale
added segments.
d. This will help them and it creates losses under
generate more revenues in the pre-tax and after tax
a fewer products. income.
e. There will be more clarity d. When a company drops a
on the consumer’s segment, this would mean
perspective on what antagonizing their
product this company is consumers especially the
specializing. loyal ones.
VIII. STRATEGY FORMULATION OR RECOMMENDATION
I therefore conclude that the best solution to the problem is alternative course of
action number 1 which is to Carlsberg needs to scrutinize the industry’s stability prior to
merging with international or local markets. Actually, there is already an assurance that the
company is examining the business enterprises they wanted to engage in. But, they still
incur bad acquisitions and relationship with their other partners. Considering this
situations, I came to a conclusion that Carlsberg needed not only examine the companies
they are going to merge with but also the market they are engaging in that country or local
places. The Carlsberg needs to be careful in choosing their partners because it can either
made them or break them. So that whenever they encounter disputes with their business
partners, they will not loss their profits in big time and can stand on their own.
More than their business partners, they need to analyze carefully their target
markets because they are the reason why they are generating profits in the first place. It is
true that there is no economic stability in the long run but at least the company does have
contingency plans to be able to operate the business amid the disputes they might be having
in their business partners. To dominate the brewing industry would mean knowing every
aspects of the business. Knowing the environment prior to the merging of companies will
help them gain an advantage in the industry because, they will know how to handle the
fortuitous events in the future.

IX. PLAN OF ACTION

1. Carlsberg need to review their current business partners and the environment they are
engaging in if they will be profitable in the next years.
2. If they found out that there might be economical problems that might arise because of
the constantly changing government regulations in every country, they need to
establish contingency plan to minimize the risks.
3. And then, since they are operating in different countries, make sure that the company
is serving the market suitably and according to their taste and preferences.
4. In some occasions, Carlsberg can offer discounts, merchandise or new product design
so that the people may feel the presence of the occasion and the company.
5. Look for potential products that might be popular to the market and launch it
according to the specialization of the company. (E.g. flavored beers, carbonated drinks,
or any drink that might have a flavored beer in it.)

X. POTENTIAL PROBLEM
1. What if the government tightens their regulations that it affects the import and export
duties of Carlsberg and might result in pulling out the brand in the local place or
country?
2. What if the input costs in making the product becomes unbearable for the company to
attain?
3. What if the businesses experience a trough stage in the economy in the following
years?
4. What if Carlsberg undergo again into dispute with their merging company?
5. What if the people become more health conscious and Carlsberg generating low sales?
 XI. CONTINGENCY PLAN
1. Carlsberg will be need to increase their prices in able to serve still their market in the
particular place or country.
2. Carlsberg as well as the other brewing companies might set a meeting to the
government to compromise their business deals.
3. Carlsberg needs to use alternative products without sacrificing the quality of their
products to be able to continue in their business.
4. When the businesses experience a sudden trough stage, they, as well as the Carlsberg,
needs to adjust the prices so that their products can still be available in the market.
5. Carlsberg needed to be careful in their actions and be sure to follow the policies of their
business partners.

Works Cited
Business overview of Carlsberg. (2015, March 23). Retrieved from UK Essays:
https://www.ukessays.com/essays/marketing/business-overview-of-carlsberg-marketing-
essay.php

Sustainability. (n.d.). Retrieved from Carlsberg Group:

https://carlsberggroup.com/sustainability/sustainability-at-carlsberg/