Case study
Carlsberg
www.carlsberggroup.com Carlsberg, based in Copenhagen, Denmark, is the world’s third largest brewer after ABinBev and Heineken. The main brands are the flagship Carlsberg, premium Kronenbourg 1664, Somersby cider and Tuborg. It manufactures, markets and sells 500 mainly local brands of beer from 85 breweries in more than 40 countries. In the financial year to the end of December 2018, its net revenue was 62.5 billion DKK, from which it generated an operating profit of 9.3 billion DKK, and an operating margin of 14.9 per cent (up from 14.6 per cent the previous year). It employs 45,000 staff, Carlsberg’s first significant investment outside Denmark was in 1968 when it opened a brewery in Malawi. In 2001, it began a more determined over- seas expansion by acquiring Norwegian brewer Orkia, so becoming the dominant Nordic brewer. In 2008, it acquired Kronenbourg (France) and Scottish & New- castle in the UK, which also owned Baltic Beverages, market leader in Russia and the Baltics. These acqui- sitions gave it access to local brands, distribution networks, and local knowledge of the beer market. It later acquired Chongqing Brewery in mainland China. These tumed the company into a multinational busi- ness, which led to organisational change.
Bamy Masonry Stock Photo It has adopted a regional structure, in which local companies provide manufacturing, marketing and Russia where, in 2017, the government reduced the distribution expertise, reporting to regional manage size of bottles that could be sold, causing a further fall ment, while the centre manages support services in sales. In contrast, there has been a strong growth such as IT and finance. The company also hired in demand for craft and speciality beers. managers from fast moving consumer goods (FMCG) The Board also recognised a need for cultural as companies who were enthusiastic about moving the well as structural change.
A former CEO commented: company rapidly towards centralised systems and The most important thing was to create a com- brands, while simultaneously respecting the belief pletely new winner culture, and to develop our that brewing will always be local’. staff so that they constantly take the lead in the In 2018, the geographical distribution of sales by market (quoted in Soderberg, 2015, p.239).
volume was Western Europe 58 per cent: Eastern Europe 17 per cent; and Asia 25 per cent. The West- Sou Sederber 2016 Catwy Amar Peport and Accounts em Europe business is ‘mature’, with limited scope for 2018: Pracal Times, 15 August 2018, p. 10, growth, so it aims to improve profits by innovation and efficiency – and is very profitable.
The company uses Case questions 4.1 these profits in part to support the Eastern Europe business where the aim is to achieve rapid growth
• What contextual factors may have encouraged and higher earings, and the Asian one where the Carlsberg’s management to expand overseas, aim is to achieve long-term growth through building and to which areas of the world?
a strong market position. Carlsberg owns and man
• How will a growing overseas operation have ages breweries in each of these areas, and services affected the tasks and processes of manage the rest of the world through exporting and licensing ing?
Try to identify two of each arrangements. Beer consumption is declining in West
• What are the main risks of expanding rapidly em Europe as people seek healthier lifestyles or prefer in overseas markets? wine and spirits. The same is happening in China and
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"
