The Brewery Group Denmark
Exploring Corporate Strategy
CLASSIC CASE STUDIES
The Brewery Group Denmark: Faxe, Ceres and Thor
Flemming Agersnap
The case study explains the strategic moves of Brewery Group Denmark (BGD), a small Danish brewery fighting for a position in a world market. The case shows how small companies can co-exist with giant competitors in an international context and how a coherent international strategy can be built whilst allowing for different local strategies. BGD is an example of a firm which has achieved a distinctive position in a highly competitive industry by focusing on importing Danish beer into selected markets, through a network of alliances. The case provides an opportunity to consider the strengths and weaknesses of the company’s strategy and options for future development. l l l
It is better to be dominant in a small niche than to be a marginal supplier in a big market. (Claus Nielsen, international sales director, BGD) Denmark is a beer-drinking country with a long tradition of brewing beer. The Danish brewing industry is dominated by the Carlsberg Group, holding a market share of 70–75 per cent and a worldwide position with sales and production in many countries. In the Danish market there were four mid-size breweries and a number of smaller ones competing with Carlsberg. In 1989 two of the mid-size breweries merged their brewing activities into a joint venture ‘Bryggerigruppen’, The Brewery Group Denmark (BGD). This made it the second largest brewer in Denmark and was the background to significant international expansion.
BREWERY GROUP DENMARK (BGD), FAXE, CERES AND THOR
Together BGD supplies about 15 per cent of the beer consumed in Denmark, although its share varies within the various Danish regions. Located in Aarhus, Jutland, Ceres has had a strong market position there for many years and over the last 30 years it had merged with breweries in neighbouring towns. One of these breweries was the Thor brewery in Randers. In 1996, Thor had a
CLASSIC CASE STUDIES
The Brewery Group Denmark: Faxe, Ceres and Thor
Flemming Agersnap
The case study explains the strategic moves of Brewery Group Denmark (BGD), a small Danish brewery fighting for a position in a world market. The case shows how small companies can co-exist with giant competitors in an international context and how a coherent international strategy can be built whilst allowing for different local strategies. BGD is an example of a firm which has achieved a distinctive position in a highly competitive industry by focusing on importing Danish beer into selected markets, through a network of alliances. The case provides an opportunity to consider the strengths and weaknesses of the company’s strategy and options for future development. l l l
It is better to be dominant in a small niche than to be a marginal supplier in a big market. (Claus Nielsen, international sales director, BGD) Denmark is a beer-drinking country with a long tradition of brewing beer. The Danish brewing industry is dominated by the Carlsberg Group, holding a market share of 70–75 per cent and a worldwide position with sales and production in many countries. In the Danish market there were four mid-size breweries and a number of smaller ones competing with Carlsberg. In 1989 two of the mid-size breweries merged their brewing activities into a joint venture ‘Bryggerigruppen’, The Brewery Group Denmark (BGD). This made it the second largest brewer in Denmark and was the background to significant international expansion.
BREWERY GROUP DENMARK (BGD), FAXE, CERES AND THOR
Together BGD supplies about 15 per cent of the beer consumed in Denmark, although its share varies within the various Danish regions. Located in Aarhus, Jutland, Ceres has had a strong market position there for many years and over the last 30 years it had merged with breweries in neighbouring towns. One of these breweries was the Thor brewery in Randers. In 1996, Thor had a