Critical Evaluation of Steve Millar's Approach - Essay Example

? Case study Analysis Part A Answer Introduction: Steve Millar, the Managing director of the South Australia Based of wine company, i.e. BRL Hardy,used to have vision of making the company as one of the world’s first truly global wine companies. In order to accomplish this vision, Miller had propagated some new strategic as well as functional changes within the existing business disposition of the company. As per the case, BRL Hardy was one of the most prominent wineries established within Australia. The company had also registered some intensive footprints within the global winery market. In direction to this, in order to make the company as an international brand, Millar has adopted two prime approaches, i.e. overseas business expansion, and decentralization of authority. Critical evaluation of Steve Millar’s approach: The above mentioned approaches of Miller had been reflected quite intensively in the decisions and strategies formulated by him. In order to be international, Miller had undertaken the route of merger and acquisition. For instance, in order to get entered within the market of France, the company acquired a century old Domaine de la Baume, which is well reputed winery brand with French market. Along with this, there are a number of different other important established domestic and exports French brand was acquired BRL Hardy for the purpose of expanding within France, in the year 1990. Six months later, the company acquired Italy’s oldest winery, named as Brolio de Riscoli for the purpose of clearing the way to get entered within the market of Italy. Along with this, UK is also one of the most prominent markets of the company in which the company earned quite intensive amount of profits. In this regard, the company established its direct subsidiary within the country. Moreover, the company undertook several crucial mergers and acquisition across Asian and American regions for the purpose of supporting it overseas diversification approach of Miller (Johnson, Scholes and Whittington 2011). This approach of Miller can be supported on the ground of growth related corporate level strategic orientation for the organization. As per this approach, business diversification at global level is one of the most efficient ways to reduce the impact of external business environment. This approach of Miller supported him to make an efficient portfolio for its business operations, which had proved quite helpful for the organization to diversify the external environmental risk (House et al 2004). For the long term perspective this strategy of Miller can be appraised. The concept of systematic risk mitigation also advocates the approach of Miller regarding business expansion at international level. However, the case reflects that in order to be international, the disposition of the company in the domestic market was weakened due to international business expansion. This is one of the most critical issues associated with the international business expansion approach of Miller (Hill 2011). In addition to this, the second approach of Miller, for the purpose of making BRL Hardy as an international brand, was related to the decentralization of the management structure of the organization within its international business strategy of the organization. As per this approach Miller was the strong believer of providing some intensive power and authority to the local administration and management of its different business location. In the context of this strategy, he handed over all the power of making decisions and planning to Christopher Carson for the purpose of managing all the operations and business activities of its UK subsidiary. This strategy of Miller was proved quite successful as UK subsidiary of the company made some intensive profits for the company in the year 1998. Miller wanted to have some intensive and deep involvement of Carson in the corporate planning and decision making for the company. However, the approach of Miller toward this decentralization was directed to align its European subsidiary’s actions and practices with the global and centralized objective of the company to be a truly international brand (Bartlett and Beamish 2011). Form the perspective of organizational structure in the international business perspective, this approach of Miller regarding the administration of its international business Units can be supported. As per the decentralized organization structure, each business units is encouraged to make some independent decision regarding their business operations. This approach allowed Carson to make some intensive changes in the business structure and products offerings of the organization as per the demand of the market of the UK. This helped the organization to be success and compatible with the demand and requirement of the domestic market. However, this approach of Miller can be criticized due to some critical issues associated with the decentralized business structure. In this context, decentralization provided some independent identity of the different business units of the organization, which is against the vision of a globally integrated brand of the company (Frynas and Mellahi 2011). Conclusion and Recommendation to Miller: On the basis of review of case conditions, Miller can be recommended to allow more scope for local responsiveness within his global strategy. As per the conditions of 1998, when the company was approaching towards availing some intensive success in it different global market, it was quite essential to have some strategic steps for continuing such growth. For instance, in the year 1998, BRL Hardy was selected as second top selling wine brand (after Gallo) in the UK market. This was one of the major achievements of the company as strategically UK was quite important and potential marketplace for the company. The company needed to focus on maintaining this growth within the UK market, which became quite competitive due to entry of different French and American wineries within the country. In this context, Carson, head of UK subsidiary of the company, suggested to enhance the local responsiveness within the manufacturing, processing, marketing and distribution of wine within the UK market (Bartlett and Beamish 2011). As the market is quite important for the organization, Miller should consider enhancing local responsiveness so that effective and desired products and services can be provided to local customers. Moreover on the basis of the international integration model of business activities, it can be recommended to the company to integrate the local demands and requirements with its international business activities and operations (Porter 1998). Answer B: Answer 2 Introduction: Christopher Carson was the appointed as the head of UK business subsidiary of the company in the year 1991. At that period of time business of the company in the UK market was going through a bad phase. In order to cope up such critical situation, Carson adopted some crucial cost cutting strategy within the UK market. With some intensive efforts of Carson in the market, the company was become not only profitable within the market place, but it also became able to grasp some significant market share. Viewing this intensive success of Carson, he was appointed as the chief Executive of BRL Hardy Europe in the year 1995. Soon after holding the responsibility, Carson has started to undertake some crucial strategic initiatives in the favor of the organization (Bartlett and Beamish 2011). Appraisal of the strategy developed by Christopher Carson: The first and foremost strategic initiative of Carson was related with the diversification of suppliers of raw material for wine. As raw material for the productions of wine i.e. grapes are the seasonal fruit, their harvesting is quite vulnerable due to weather, disease, and other factors. For the purpose of minimizing risk in the supply of raw material, he undertook the strategy of sourcing from different regions (Grant and Jordan 2012). In addition to this, another major strategic initiative of Carson in the market is the undertaking of outsourcing venture with Whiclar and Gordon for the purpose of accomplishment of its distribution and merchandising related business operations in the well spread market of Europe (Bartlett and Beamish 2011). This decision of the company has not only added scales of economies to the sales volume and distribution of the product within the market but it also provided some strategic advantages to the company. For the company, this strategy was quite effective for the organization as it allowed the company to deliver some intensive quality services to its customers. In direction to this, it also helped the company to develop some distinguished image of its business operation related competencies in the eyes of its customers (Henry 2011). Along with this, Carson also undertook some intensive and crucial strategic ties-ups with major retailer, especially with retail grocery chain, such as Sainsbury. These chains were in the process of rationing its suppliers for the purpose of simplifying its purchasing. Identifying this opportunity, Carson has undertaken some proactive approach and made some strategic tie-ups with such retail stores. With the help of this proactive approach the company became able to be established in the market of the UK quite intensively (Jones 2004). Moreover, Carson also undertook the strategy of joint venture for the purpose of avoiding any hurdle in the way of attaining success in highly potential European market. In this regard, in the year 1997, Carson undertook a 50/50 joint venture with Chilean winery, namely Jose Canopa y CIA Limitada. This was one of the most prominent wineries operating within Chili. As per the norms of this joint venture, it was decided that Chilean counterpart in this deal would provide the supply of the fruit and other important winemaking facilities to BRL Hardy (Ohmae1994). Moreover BRL Hardy would send its winemakers to the Chilean company and hold the responsibility of marketing and distribution of the Chilean brand, namely ‘Mapocho’. After this supply negotiation, the company had become quite sure about the supply of the raw material and its production level. In direction to this, the company gradually gained the competitive advantage of being easily available wine brand within European market (Bartlett and Beamish 2011). These were some of the crucial strategic initiative undertaken by Carson so that different hurdles in front of effective and successful positioning of the Brand within European market can be taken into account. On the basis of review of the entire case a different concepts of international business, it can be identified that the major focus of Carson in European market was on merger, acquisition and joint ventures strategy for the purpose of attaining some intensive growth and easy access of some required resources. The integration theory of international business supports such actions of Carson (Kay 1993). As per this theory, there are a number of different important and effective ways such as merger, acquisition, strategic alliance and joint venture, through which an organization can integrate its resources for the purpose of attaining some capabilities to combat against different external environmental problems (Friedman 2005). Moreover Resource Based approach also stated that outsourcing of business activities also allows the organization to have some intensive scope of enhancing its overall quality of services and operations (Deresky 2011). In order to be successful in the European market, Carson also capitalized the core competency of the parent company, i.e. high quality wine. BRL Hardy was the brand, which used to be known quite intensively due to its excellent quality and taste. For the purpose of leveraging the parent company’s this distinctive strength, Carson utilized the brand name and slogan of the company. In the marketing campaigning of BRL Hardy in the Europe, Carson positioned the company has one of the highly reputed and well known Non-English and international brand of wine. Moreover, same like its parent company, BRL Hardy also focused on the effective distribution of products in the market. Carson was proved quite successful in enhancing its overall capabilities regarding selling and distribution due to some crucial mergers and acquisitions within the European market (Bartlett and Beamish 2011). However, along with capitalizing the distinctive strengths of the parent company, from the future perspective, the company should enhance distinctive regional competences and capabilities within the European unit. The company should develop its own channels of distribution and supply chain management so that the company can be able to address any contingencies (DE Wit, and Meyer 2010). Conclusion: On the basis of intensive review of the discussion made in the section, it can be concluded that the development of some distinctive regional competences will provide some crucial strategic advantage to the company within the local market also. In the long term, it would be proved quite beneficial strategic step for the company (Lasserre 2012). Answer 3: Introduction: Outsourcing is the business process, which enables the management to get its different operational activities done by other specialized service vendor (Merchant 2008). Outsourcing can be recognized as one of the major measures of managing resources for the organization. Business organizations undertook this measure as it allows them to accomplish its different operations in the most professional and specialized manner (Lawrence and Beamish 2013). In this regard, the case has reflected that for the purpose of attaining operational efficiency within the European market, BRL Hardy also undertook the strategy of outsourcing as it handed over the task of maintaining proper distribution of the products within the market to Whiclar and Gordon, a domestic service provider. Although this decision of the company proved quite beneficial for the company, yet still there were some critical and strategic issues associated with the outsourcing, which was faced by the company in the later period of time (Mintzberg, Ahlstrand and Lampel 2008). Strategic challenges involved in outsourcing: The first and foremost strategic issue due to outsourcing is related with the leak of some crucial and confidential information among its competitors, which can be misused. In direction to outsource any business activities, the company has to make an outsider as a strategic partner and provide him some crucial and confidential information so that he can be able to accomplish the assigned task in the most effective manner. In this process, the role of trust on the outsourcing partner enhances quite intensively (Porter 1998). This situation can be reflected in the presented case scenario, in which BRL Hardy had provided some crucial information regarding its existing future plans to be expanded quite intensively within the market of the Europe to its outsourcing partner, namely Whiclar and Gordon. In this context, the company exposed itself in front of some of the intensive risk in the highly competitive market place (Bartlett and Beamish 2011). Another crucial challenge associated with the process of outsourcing is that outsourcing restricts the span of authority of the top level and centralized management. When a company outsources its business process, it becomes the responsibility of the service vendor to accomplish the assigned tasks to them (Phatak et al 2004). Vendor can use his own personal resources for the purpose of accomplishing the task assigned to him. In this context, there is quite less scope of liberty of make changes in the process of accomplishing the function for the in-house management. In this regard, customization in the process completion becomes quite critical tasks in the outsourcing (Stonehouse et al 2004). Along with this, from the long term perspective of the organization also, there are some critical issues and challenge that could be faced by the organization because of the outsourcing strategy of the organization. In direction to this, for the organization, it is quite essential to develop some crucial internal strength for the purpose of addressing different environmental problems that arises frequently in front of the business organization. In direction to this, it is one of the most critical problems of Outsourcing that it restricts the scope of the development of internal competencies regarding the accomplishment of its core business processes. From the strategic perspective it is crucial for the company to have some intensive in-house capabilities which can be used in the adverse time. Furthermore for the long term, adoption of the outsourcing strategy could be proved cost occurring business activities of the organization. In comparison to the outsourcing in-house production of the services and process will also be proved quite cost efficient for the organization (Stacey 2011). On the basis of this discussion it can be considered that for BRL Hardy, overreliance on outsourcing for its different operational function is quite risky. The company should put efforts for finding some new and efficient alternatives of the outsourcing. Some of the potential alternatives can be listed as below: (1) Strategic alliance: In this measure, instead of going for outsourcing, the business organization can undertake some intensive strategic alliances with other business organizations for the purpose of accomplishment of their desired tasks. Strategic alliance is the measure through which, both the participant companies undertakes an agreement which is able to fulfill all the strategic objectives of both the business organizations (Seitanidi 2010). The company has already undertaken a strategic alliance with a Chilean winery, namely Jose Canopa y CIA Limitada. This strategic alliance aimed to fulfill the requirement of the raw material and fruit for wine manufacturing. In the same manner, the company can go for other crucial strategic alliances for the purpose of undertaking the tasks of marketing and distribution of its product within the market of the Europe. This will be quite helpful for the company to avoid the requirement of outsourcing (Rugman and Collinson 2009). (2) Development of in-house competencies: Along with the strategic alliances, the company has another crucial alternative of the outsourcing for the company. in this measure, the company can undertake some crucial tools and techniques related to training and development for its employees so that the company can be able to develop its internal competencies and skills (Sitkin and Bowen 2010). for this purpose, the company is required to design an intensive training programs for its employees, in which some focused and innovative tools should be used in order to train them in the most effective manner. In direction to this, employment of such programs also leads to make employee competent and effective for the long term (Campbell, Edgar and Stonehouse 2011). These are two effective and crucial alternatives of outsourcing, which can be recommended to the organization. Conclusion: On the basis of review of the entire section, it can be understood that outsourcing can be considered as the strategic challenge for the company. It is quite essential for the organization to have some effective process and alternative which can be applied on the operational framework of the company for avoiding the harmful impact of outsourcing (Som 2009). References Bartlett, C.A. and Beamish, P.W. 2011. Transnational Management: Text, cases, and readings in cross-border management. 6th edition. New York and London: McGraw-Hill/Irwin. Pp. 612-628. Campbell, D., Edgar, D. and Stonehouse, G. 2011. Business Strategy: An introduction.3rd edition. Basingstoke: Palgrave. DE Wit, B. and Meyer, R. 2010. Strategy Synthesis: Text and readings. 3rd edition. London: Cengage Learning. Deresky, H. 2011. International Management: Managing across borders and cultures. 7th edition. Harlow: Pearson Education. Friedman, T. 2005. The World is Flat: A brief history of the globalized world in the 21st century. London: Penguin/ Allen Lane. Frynas, J.G. and Mellahi, K. 2011. Global Strategic Management. 2nd edition. Oxford: Oxford University Press. Grant, R.M. and Jordan, J. 2012. Foundations of Strategy. Chichester: Wiley. Henry, A.E. 2011. Understanding Strategic Management. 2nd edition. Oxford: Oxford University Press. Hill, C.W.L. 2011. International Business. 8th edition. New York and London: McGraw-Hill/Irwin. House, R.J., Hanges, P.J., Javidan, M., Dorfman, P.W. and Gupta, V. 2004. Culture, Leadership and Organizations: The GLOBE study of 62 societies. Thousand Oaks, California: Sage. Johnson, G., Scholes, K. and Whittington, R. 2011. Exploring Strategy: Text and cases.9th edition. Harlow: Pearson Education / FT Prentice Hall. Jones, G. 2004. Multinationals and Global Capitalism. Oxford: Oxford University Press. Kay, J. 1993. Foundations of Corporate Success. Oxford: Oxford University Press. Lasserre, P. 2012. Global Strategic Management. 3rd edition. Basingstoke: Palgrave. Lawrence, J.T. and Beamish, P. (eds.). 2013. Globally Responsible Leadership: Managing according to the UN Global Compact. Los Angeles and London: SAGE. Merchant, H. 2008. Competing in emerging markets: cases and readings. New York and Abingdon: Routledge. Mintzberg, H., Ahlstrand, B. and Lampel, J. 2008. Strategy safari. 2nd edition. London: Prentice Hall. Ohmae, K. 1994. The borderless world: power and strategy in the global marketplace. Also available in the 1991 and 1999 editions with the subtitle: power and strategy in the interlinked economy. London: HarperCollins. Phatak, A.V., Bhagat, R.S. and Kashlak, R.J. 2005. International management: managing in a dynamic global environment. New York and London: McGraw-Hill/Irwin. Porter, M.E. 1998. Cluster and the New Economics of competition. Harvard Business Review 76 (6), pp. 77-90 Porter, M.E. 1998. The competitive advantage of nations. Basingstoke: Palgrave. Rugman, A.M. and Collinson, S. 2009. International business. 5th edition. Harlow: Pearson Education / Prentice Hall. Seitanidi, M.M. 2010. The politics of partnerships: a critical examination of nonprofit-business partnerships. Heidelberg: Springer. Sitkin, A. and Bowen, N. 2010. International business: challenges and choices. Oxford: Oxford University Press. Som, A. 2009. International management: managing the global corporation. Maidenhead: Mc-Graw-Hill Education. Stacey, R.D. 2011. Strategic Management and Organisational Dynamics: The challenge of complexity (to ways of thinking about organisations). 6th edition. London: FT/Prentice Hall. Stonehouse, G., Campbell, D., Hamill, J. and Purdie, T. 2004 Global and Transnational Business: Strategy and management. 2nd Edition. Chichester: John Wiley & Sons, Ltd. Read More