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CASE STUDY IV.1
Absolut Vodka: defending and attacking for a better position in the global vodka market
On a lovely day in March 2009 the CEO of V&S Absolut Spirits, Ketil Eriksen, packs his suitcase for the third time in the month for a business trip to the subsidiary in New York. In March 2008 France’s Pernod Ricard won the battle to buy the maker of Absolut vodka in a costly 35.63 billion (US$8.9 billion) deal that brings it nearly level in sales with global spirits leader Diageo. Pernod’s Richard’s main gain with the acquisition of V&S Absolut Spirits was V&S’s Absolut Vodka. It is the world’s second-largest vodka brand, and the world’s leading premium vodka. Before the acquisition Penod Richard had a limited vodka portfolio and was only among the world’s leading 20 vodka manufacturers. After the acquisition Pernod Ricard becomes the second-largest vodka producer, behind Diageo. Now Pernod has also a total annual volume of 91 million 9-litre cases of spirits (in 2009), up from 75 million before, putting it just behind Diageo’s total of 93 million. While packing he thinks of how hard the company must fight to keep and increase its market share for Absolut Vodka in the United States and other markets. In the last five years Absolut Vodka has increased its world market share, but can it continue? Absolut accounts for more than half of all imported vodka sales in the United States: it is the third-largest international premium spirit and is available in 130 markets. Among premium vodkas Absolut Vodka is no. 2 worldwide, after Smirnoff. When Ketil gets on the plane at Stockholm’s airport bound for New York, there are two things that worry him: Apparently the market share of Absolut Vodka in the United States has reached saturation point. Has V&S Absolut Spirits reached its maximum market share in that country or is it time for a frontal attack on the number one brand, Smirnoff? Until now, the market share for Absolut Vodka in Europe (especially in Eastern Europe)
Absolut Vodka: defending and attacking for a better position in the global vodka market
On a lovely day in March 2009 the CEO of V&S Absolut Spirits, Ketil Eriksen, packs his suitcase for the third time in the month for a business trip to the subsidiary in New York. In March 2008 France’s Pernod Ricard won the battle to buy the maker of Absolut vodka in a costly 35.63 billion (US$8.9 billion) deal that brings it nearly level in sales with global spirits leader Diageo. Pernod’s Richard’s main gain with the acquisition of V&S Absolut Spirits was V&S’s Absolut Vodka. It is the world’s second-largest vodka brand, and the world’s leading premium vodka. Before the acquisition Penod Richard had a limited vodka portfolio and was only among the world’s leading 20 vodka manufacturers. After the acquisition Pernod Ricard becomes the second-largest vodka producer, behind Diageo. Now Pernod has also a total annual volume of 91 million 9-litre cases of spirits (in 2009), up from 75 million before, putting it just behind Diageo’s total of 93 million. While packing he thinks of how hard the company must fight to keep and increase its market share for Absolut Vodka in the United States and other markets. In the last five years Absolut Vodka has increased its world market share, but can it continue? Absolut accounts for more than half of all imported vodka sales in the United States: it is the third-largest international premium spirit and is available in 130 markets. Among premium vodkas Absolut Vodka is no. 2 worldwide, after Smirnoff. When Ketil gets on the plane at Stockholm’s airport bound for New York, there are two things that worry him: Apparently the market share of Absolut Vodka in the United States has reached saturation point. Has V&S Absolut Spirits reached its maximum market share in that country or is it time for a frontal attack on the number one brand, Smirnoff? Until now, the market share for Absolut Vodka in Europe (especially in Eastern Europe)