Post on 08-Nov-2014
description
BRL HARDY:GLOBALIZING AN AUSTRALIAN
WINE COMPANYGROUP 3: HENDRY – PAUL - VANIA
MULTINATIONAL CORPORATION MANAGEMENT
“GOOD COMPANY, GOOD WINE, GOOD WELCOME, CAN MAKE GOOD PEOPLE.” - WILLIAM SHAKESPEARE (1613)
BRL Hardy Background
OUTLINE
• Industry Background
• BRL Hardy Background
• Success in Europe
• If you were Steve Millar, what would you do?
• Any suggestions to your Dream MNC?
MULTINATIONAL CORPORATION MANAGEMENT
Industry Background
Success in Europe If I were Steve Millar
suggestions to Dream MNC
BRL Hardy Background
INDUSTRY BACKGROUND
MULTINATIONAL CORPORATION MANAGEMENT
Industry Background
Success in Europe If I were Steve Millar
suggestions to Dream MNC
1788 Introduced by Captain
Arthur Phillip
1969 wine consumption was 8.2 liters
1990 Consumption reached 18.5
liters per person
1995 27% of the
Australian wine
production is exported
2025 Potential Exports
Increased
fortified wines table wines two-liter “bag
in a box”
US$360 million (3,5% worldwide) US$2 billion
(16% worldwide)
United Kingdom / United States
Germany / Japan
BRL Hardy Background
BRL HARDY BACKGROUND
MULTINATIONAL CORPORATION MANAGEMENT
Industry Background
Success in Europe If I were Steve Millar
suggestions to Dream MNC
BRL Hardy Ltd.
HardyThomas Hardy &
Sons
BRL
Renmano Wine Coop
Berri Coop
BRL Hardy Background
BRL HARDY BACKGROUND
MULTINATIONAL CORPORATION MANAGEMENT
Industry Background
Success in Europe If I were Steve Millar
suggestions to Dream MNC
Items Hardy BRL
Founded
Founded by Thomas Hardy in 1853
Win first international gold medal in 1882
Founded in 1916 as Renmano Wine Coop.
Merged with Berri Coop. in 1982 Berri Renmano Limited (BRL)
Known for Australia’s largest
winemaker Award-wining quality wines
Fortified, bulk, value wines “The oil refinery of the wine
industry”
Culture/ Values Polite and traditional ,
Family ownership Aggressive and commercial
Cooperative (1916: 1st cooperative winery, 130 Italian grape growers)
Core competencies
“Marketing expertise, brands, and winemaking know-how”
Huge-volume grape crush Bulk packaging operations “access to fruit, funds, and
disciplined management”
BRL Hardy Background
BRL HARDY BACKGROUND
MULTINATIONAL CORPORATION MANAGEMENT
Industry Background
Success in Europe If I were Steve Millar
suggestions to Dream MNC
Items Hardy BRL
Export Experience
Track record at export 1989: acquisition of Whiclar
and Gordon
Limited international experience in Scandinavia
Goals
Looking for wineries in Europe to reach critical mass + credibility to give access to Europe.
Looking for multiple sources of supply
Struggling and looking for ways to expand and upgrade its business
BRL Hardy Background
REASON OF MERGING
MULTINATIONAL CORPORATION MANAGEMENT
Industry Background
Success in Europe If I were Steve Millar
suggestions to Dream MNC
BRL Hardy Background
NEW MANAGEMENT
MULTINATIONAL CORPORATION MANAGEMENT
Industry Background
Success in Europe If I were Steve Millar
suggestions to Dream MNC
BRL Hardy Background
POST MERGER SUCCESS
MULTINATIONAL CORPORATION MANAGEMENT
Industry Background
Success in Europe If I were Steve Millar
suggestions to Dream MNC
1992 1993 1994 1995 1996 19970.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
450.00
500.00
Sales revenue; 375.60
Net after tax profit; 28.40
Total liabilities; 205.80
Operating profit 49,20
Total assets; 455.50
Shareholders’ equity; 249.70
Post Merger Success
Year
Val
ue (
in 1
,000
)
BRL Hardy Background
SUCCESS IN EUROPE• Involving 2 key people: Stephen Davies & Cristopher Carson
Stephen Davies Strategy:• Building strengths, starting with U.K. market• Make “Quality Wines for the World” slogan• Initiated a program to rationalize product portfolio• Repositioning a few key brands
Christopher Carson Strategy:• Implementing cost-cutting plan• Reduce the product line from 870 items to 230• Reduce the headcount from 31 to 18• Install strong systems, controls, and policies put him as key
decisions makerMULTINATIONAL CORPORATION MANAGEMENT
Industry Background
Success in Europe If I were Steve Millar
suggestions to Dream MNC
BRL Hardy Background
SUCCESS IN EUROPE
MULTINATIONAL CORPORATION MANAGEMENT
Industry Background
Success in Europe If I were Steve Millar
suggestions to Dream MNC
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 20010
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
BRL Hardy Europe Historical Data
Net Sales ROI
Year
Sale
s In
£0
00
RO
I Per
cen
tage
BRL Hardy forecast
BRL Hardy Background
STEPHEN DAVIES VS. CHRISTOPHER CARSON
Industry Background
Success in Europe If I were Steve Millar
suggestions to Dream MNC
MULTINATIONAL CORPORATION MANAGEMENT
BRL Hardy Background
STEPHEN DAVIES VS. CHRISTOPHER CARSON
• Centralized Approach vs. Decentralized Approach• Centralized approach (Stephen Davies)
• Central control of branding, labeling and pricing decisions
• Long-term strategy to become a global player centralize key decisions
• Decentralized approach (Christopher Carson)• UK market is not influenced by branded bottles but by the pushing of
commodities through retailer
• Labeling should not be a centralized decision due to local market condition
• Steve Millar point of view
• Handled their differences not directly through instructions
• Valued progress more and saw the conflicts as the constructive tool
• Instead they clashed together - resulting in a volume quadruplicating BRLH UK
MULTINATIONAL CORPORATION MANAGEMENT
Industry Background
Success in Europe If I were Steve Millar
suggestions to Dream MNC
IF I WERESTEVE MILLAR
MULTINATIONAL CORPORATION MANAGEMENT
“QUICKLY, BRING ME A BEAKER OF WINE, SO THAT I MAY WET MY MIND AND SAY SOMETHING CLEVER.” - ARISTOPHANES (424 B.C.)
BRL Hardy Background
IF I WERE STEVE MILLAR…A mixed of centralized and decentralized structure is the right thing.
MULTINATIONAL CORPORATION MANAGEMENT
Industry Background
Success in Europe If I were Steve Millar
suggestions to Dream MNC
BRL Hardy Background
IF I WERE STEVE MILLAR…• Set a framework to maintain a clear policy regarding the
areas in which the headquarters would have control over and the areas which Mr. Carson can have independent control over.
• Let headquarter maintains control of the number of competing brands at a given time.• Allow regional operations a certain number of brands to capture
local markets segments that do not interfere with a global brands
• The two lines of reporting decision is pretty ambiguous Let Christopher Carson Stayed under Stephen Davies More fair
MULTINATIONAL CORPORATION MANAGEMENT
Industry Background
Success in Europe If I were Steve Millar
suggestions to Dream MNC
BRL Hardy Background
D’ISTINTOLaunch D’Istinto – Why?• Organizational Factors
True Partnership, unlike Mapocho from ChileDoes not target the same consumer as Stamp and Nottage Hill
• Financial FactorsCheap Launch (£ 100,000)Good forecast of selling (made by Carson)
• Other FactorsDiversify its suppliers (reduce risk)Providing more varieties to the retailersBrand for average consumer (£3.49 to £6.99)
MULTINATIONAL CORPORATION MANAGEMENT
Industry Background
Success in EuropeIf I were Steve
Millarsuggestions to
Dream MNC
BRL Hardy Background
KELLY’S REVENGE VS BANROCK STATION Launch Kelly’s Revenge – Why?• Local responsiveness product for U.K. market
• Backing of U.K. sales management team
• Full fill the low range of Hardy’s brand since Nottage Hills and Stamps went up• 80% of wine market in Europe was priced below £4.49
• Launching Banrock Station Ignoring local knowledge and underutilizing subsidiary strength, also demotivating their managers
• Risk of currency fluctuation will be there if the company comes up with global product price standardization will be very difficult.
MULTINATIONAL CORPORATION MANAGEMENT
Industry Background
Success in EuropeIf I were Steve
Millarsuggestions to
Dream MNC
SUGGESTION TO DREAM MNC
MULTINATIONAL CORPORATION MANAGEMENT
"FROM NOW ON I WANT EVERYBODY TO PUT THEIR EFFORTS TOGETHER AND UNITE IN FINDING A WAY TO MAKE SUPERIOR VEHICLES.“ - KIICHIRO TOYODA 1939
BRL Hardy Background
TOYOTA IN SOUTH AFRICA• Since June 1962, Toyota has been established a manufacturing
operations in South Africa (Toyota South Africa Motors Ltd.)• Main Products: Corolla, Hilux, Fortuner, Dyna
• Average of 125,000 vehicles produce per year with 7,000 employee
• Main Supplier for Europe and Africa market
Industry Background
Success in EuropeIf I were Steve
MillarSuggestions to
Dream MNC
MULTINATIONAL CORPORATION MANAGEMENT
BRL Hardy Background
TOYOTA’S APPROACH• Toyota is using a regiocentric approach to deliver its
global product.• Toyota does not offer the same products across those regions as
it would not be adapted to the local demand• Offering products to continental regions with similar economies
and culture.
• Some report notes that Toyota’s operation is too centralized• Major decision comes from Japan (recalls, communications, marketing,
and vehicle design and development)
• In North America Toyota doesn't have a single executive in charge each major department head reports to Japan.• Dismissive of outsiders
Industry Background
Success in EuropeIf I were Steve
MillarSuggestions to
Dream MNC
MULTINATIONAL CORPORATION MANAGEMENT
BRL Hardy Background
GLOBAL VS LOCAL
Industry Background
Success in EuropeIf I were Steve
MillarSuggestions to
Dream MNC
MULTINATIONAL CORPORATION MANAGEMENT
BRL Hardy Background
DECISION MAKING PROCESS (CURRENT)
Industry Background
Success in EuropeIf I were Steve
MillarSuggestions to
Dream MNC
MULTINATIONAL CORPORATION MANAGEMENT
• Executive Vice President• Executive responsible for the operations
involved• Chief Officer
Three-layer Decision making
procedure
BRL Hardy Background
DECISION MAKING PROCESS (SUGGESTION)
Industry Background
Success in EuropeIf I were Steve
MillarSuggestions to
Dream MNC
MULTINATIONAL CORPORATION MANAGEMENT
• Eliminating The executive between the Chief Officer and vice president
• By doing that:• Reducing Chance of conflicting ideas• Swifter flow of information from Divisional General
Managers to Executive Levels.• Increased clarify in organizational responsibilities• Decision making closer to frontline operations.
• Executive Vice President• Chief Officer
Two-layer Decision making
procedure
BRL Hardy Background
PRICING STRATEGIES
Industry Background
Success in EuropeIf I were Steve
MillarSuggestions to
Dream MNC
MULTINATIONAL CORPORATION MANAGEMENT
• Toyota offers similar products but there are huge differences concerning the price between some countries.
• It´s a difference of $8,000 considering that the purchasing power for Germany are much higher than people in South Africa.
• Toyota should find the way to adapt not only their products to the each region but also its Price.
Toyota PriusGermany$34,000
South Africa$42,000
BRL Hardy Background
KEY LEARNING
•More need of cooperative effort and co-option of dispersed capabilities of national units instead of a very centralized direction and control by the parent company
•Need for global integration as well as local responsiveness
•Organization design is also a key factor in organizing global operations
Industry Background
Success in EuropeIf I were Steve
MillarSuggestions to
Dream MNC
MULTINATIONAL CORPORATION MANAGEMENT
THANK YOUFOR YOUR ATTENTION
MULTINATIONAL CORPORATION MANAGEMENT