Case 1 Carlsberg
CASE BACKGROUND
David had been working as a consultant with ABC Consulting Sdn. Bhd for 3 years. The firm specialized in businesses turnarounds and reviving distress businesses in the past decades. At this month’s meeting, David’s boss, Robert Stanley had voiced out his concerns about the amount of time taken to resolve their cases. He mentioned that although their overall business is considered profitable, but the firm’s cash inflow had become irregular considering the nature of their business. In order to be sustainable, Mr. Stanley suggested that they start looking into proposing schemes to cash-rich firms that wanted to expand, diversify or venture into profitable businesses. David, who was anxious to prove himself, readily took up the challenge when he was offered the task of pioneering the move. David immediately remembered reading somewhere that the beer and stout industries was at crossroads because of high excise duties in Malaysia. Therefore, he began his research on the industry and came up with some preliminary findings:
1. Carlsberg Brewery Malaysia Berhad (Carlsberg) was a market leader with more than a 50% share of the beer and stout market.
2. Incorporated in 1961, Carlsberg began brewing Carlsberg Green Label Beer for the Malaysian market 2 years later.
3. Over the years, Carlsberg led the beer market in innovation, quality and product launches and campaigns.
4. Carlsberg held no less than 12 products of beer and shandy, was 51% owned by the Carlsberg group of Denmark and listed on Main Board of Bursa Malaysia, locally marketing its products via 100%v subsidiary in Carlsberg Malaysia Sdn. Bhd.
5. Since its operations, the company was able to enjoy sustainable profits, an increase from RM 14 million in 1977 to RM 138 million in 1999.
6. Even when profits declined, it still maintained a respectable RM 76 million in 2008.
7. Carlsberg always rewarded its shareholders well regardless of the fluctuating profits over the years. It was able to
David had been working as a consultant with ABC Consulting Sdn. Bhd for 3 years. The firm specialized in businesses turnarounds and reviving distress businesses in the past decades. At this month’s meeting, David’s boss, Robert Stanley had voiced out his concerns about the amount of time taken to resolve their cases. He mentioned that although their overall business is considered profitable, but the firm’s cash inflow had become irregular considering the nature of their business. In order to be sustainable, Mr. Stanley suggested that they start looking into proposing schemes to cash-rich firms that wanted to expand, diversify or venture into profitable businesses. David, who was anxious to prove himself, readily took up the challenge when he was offered the task of pioneering the move. David immediately remembered reading somewhere that the beer and stout industries was at crossroads because of high excise duties in Malaysia. Therefore, he began his research on the industry and came up with some preliminary findings:
1. Carlsberg Brewery Malaysia Berhad (Carlsberg) was a market leader with more than a 50% share of the beer and stout market.
2. Incorporated in 1961, Carlsberg began brewing Carlsberg Green Label Beer for the Malaysian market 2 years later.
3. Over the years, Carlsberg led the beer market in innovation, quality and product launches and campaigns.
4. Carlsberg held no less than 12 products of beer and shandy, was 51% owned by the Carlsberg group of Denmark and listed on Main Board of Bursa Malaysia, locally marketing its products via 100%v subsidiary in Carlsberg Malaysia Sdn. Bhd.
5. Since its operations, the company was able to enjoy sustainable profits, an increase from RM 14 million in 1977 to RM 138 million in 1999.
6. Even when profits declined, it still maintained a respectable RM 76 million in 2008.
7. Carlsberg always rewarded its shareholders well regardless of the fluctuating profits over the years. It was able to