Carlsberg Diversification
Table of contents
Question 1 Pressures for National Responsiveness…………………………………….………2 Strategic Role in Relation to Structural Context…………………………………...4 Managerial Recommendations……………………………………………………..5
Question 2 The Speed of a Rival’s Attack……………………………………………………..6 Managerial Recommendations…………………………………………………….9
Appendices…………………………………………………………………...….10
References……………………………………………………………………….17
Question 1
Pressures for National Responsiveness (incl. measures and data)
For the sake of clarity, I have defined local responsiveness as ‘the extent to which parent managers understand, respond and adapt to host country conditions, so that their decisions and policies pertaining to foreign subsidiaries are geared to the unique parameters of the local environment’ (Luo, 2003).
My area of focus is Carlsberg’s subsidiary (SUB) in China. I have chosen to view the Chinese SUBs as one in order to collect the best data, because Carlsberg denotes them as one in their Annual Report and because Carlsberg has a one CEO of ‘Carlsberg China’ (carlsberggroup.com). This case is interesting as it was vital for Carlsberg to enter through FDI to attain a sustainable competitive advantage through the creation and transfer of dynamic capabilities (Teece, 1997) and to create a shared context - a differentiated network - to share knowledge and relationships (Moran and Ghoshal, 1996). Carlsberg did succeed in getting access to the in-imitable resource (Barney, 1991) of the SUBs informal networks and also in sharing and appropriating knowledge (Carlsen et al, 2010). Using the framework of Dunning (2008) and Lassere (2007), other drivers for Carlsberg’s FDI were ‘Consolidation’ and Global Reach’ (Carlsen et al, 2010; Wong, 2006).
Carlsberg entered China gradually but made the first acquisition of Huizhou Brewery in Guandong in 1995 (Meyer & Tran 2006). I will divide the pressures for local responsiveness in external and internal pressures.
External:
Question 1 Pressures for National Responsiveness…………………………………….………2 Strategic Role in Relation to Structural Context…………………………………...4 Managerial Recommendations……………………………………………………..5
Question 2 The Speed of a Rival’s Attack……………………………………………………..6 Managerial Recommendations…………………………………………………….9
Appendices…………………………………………………………………...….10
References……………………………………………………………………….17
Question 1
Pressures for National Responsiveness (incl. measures and data)
For the sake of clarity, I have defined local responsiveness as ‘the extent to which parent managers understand, respond and adapt to host country conditions, so that their decisions and policies pertaining to foreign subsidiaries are geared to the unique parameters of the local environment’ (Luo, 2003).
My area of focus is Carlsberg’s subsidiary (SUB) in China. I have chosen to view the Chinese SUBs as one in order to collect the best data, because Carlsberg denotes them as one in their Annual Report and because Carlsberg has a one CEO of ‘Carlsberg China’ (carlsberggroup.com). This case is interesting as it was vital for Carlsberg to enter through FDI to attain a sustainable competitive advantage through the creation and transfer of dynamic capabilities (Teece, 1997) and to create a shared context - a differentiated network - to share knowledge and relationships (Moran and Ghoshal, 1996). Carlsberg did succeed in getting access to the in-imitable resource (Barney, 1991) of the SUBs informal networks and also in sharing and appropriating knowledge (Carlsen et al, 2010). Using the framework of Dunning (2008) and Lassere (2007), other drivers for Carlsberg’s FDI were ‘Consolidation’ and Global Reach’ (Carlsen et al, 2010; Wong, 2006).
Carlsberg entered China gradually but made the first acquisition of Huizhou Brewery in Guandong in 1995 (Meyer & Tran 2006). I will divide the pressures for local responsiveness in external and internal pressures.
External:
References: Barney, Jay. 1991. Firm Resources and Sustained Competitive Advantage. Journal of Management, vol. 17 Chen, J., 1997 Dieng, S., Dörrenbächer, C,. & Gammelgaard, J,. 2009. Subsidiary Brands as a Resource and the Redistribution of Decision-Making Authority Following Acquistions. Advances in mergers and acquisitions, vol. 8. Li, J., Yang, J Luo, Y. 2003. Market-seeking MNEs in an emerging market: How parent-subsidiary links shape overseas success. Journal of International Business Studies, vol. 34. Meyer, Klaus E. & Tran, Yen Thi Thu (2006): Market Penetration and Acquisition Strategies for Emerging Economies, Long Range Planning, 39, no. 2, 177-197. Nohria, N. & Ghoshal, S. 1996. The Differentiated Network. Organizing Multinational Corporations for Value Creation. Compendium North, D Olsen, J. 2010. Heineken presset tilbage. Børsen 19th March 2010. Teece et al Yu, T., Subramaniam, M., & Cannella, A., 2009. Rivalry deterrence in international markets: Contingencies Governing the mutual forbearance hypothesis. Compendium Yu, T Dunning, J. & Sarianna , L., Multinational Enterprises and the Global Economy, Edward Elgar, Cheltenham, 2008. Eisner, A., 2009. Strategic Management – Creating competitive advantage, 5th edition. McGraw-Hill, New York. P. 350-393 Kotler, P, Lasserre Philippe, ␣Global Strategic Management␣, New York: Palgrave Macmillan, 2007 Databases: Businessweek: Carlsberg current ratio. http://investing.businessweek.com/research/stocks/financials/ratios.asp?ticker=CARLB:DC. (Accessed 15th April 2011) Businessweek: Heineken current ratio Carlsberg Asia Procurement. 2009. http://www.made-in-china.com/showroom/ansoncxhsir. (Accessed 14th of April 2011) Carlsberg Brand Portfolio Carlsberg Glocal Matrix www.staack.biz/index.php?option=com_docman&task=doc...1.... (Google ‘Carlsberg Glocal, sixth hit) (Accessed 14th of April 2011) Carlsberg Strategy Geert Hofstede – Cultural Dimensions. http://www.geert-hofstede.com/hofstede_dimensions.php?culture1=23&culture2=86#compare. (Accessed 14th of April 2011) Global beer market trends Global Competitiveness Report, 2010-2011. https://wefsurvey.org/index.php?sid=28226&lang=en&intro=0. (Accessed 14th of April 2011) Heineken annual report 2010 Heineken annual report 2009: http://www.annualreport.heineken.com/other_information/shareholder_information.html. Accessed on the 14th of April 2011) Heineken headquarters Political Stability Index. http://viewswire.eiu.com/site_info.asp?info_name=social_unrest_table&page=noads&rf=0. (Accessed 15th of April 2011) Measuring distance Premium beer brands need a local flavor. http://www.marketingweek.co.uk/analysis/features/premium-beer-brands-need-a-local-flavour/3021144.article (Accessed 14th of April 2011) Report on Alcohol in Europe 2010 The Role of Guanxi in Wine Distribution In Shanghai. http://www.just-drinks.com/analysis/the-role-of-guanxi-in-wine-distribution-in-shanghai_id84869.aspx. (Accessed 14th of April 2011) --------------------------------------------