BRL Hardys post-merger success - Term Paper Example

The major factors of BRL Hardy’s post-merger success can be attributed to the fact that they acquired reputable organisations in the wine industry such as Whiclar and Gordon, a UK based wine importer-distributer and its rights for a range of French, Chilean and South African wines. They also made similar acquisitions in France and Italy and these acquisitions were particularly targeted as credible organisations. It became relatively easier to effectively operate in the industry since there was a clearly defined network of distribution channels. The main advantage of mergers and acquisitions is that they give the company competitive advantage in that the resources are pulled together and new knowledge is introduced to the company by the people crossing the floor from the other company. The company immensely gained from the wealth of knowledge brought by people who moved from the other companies. On the other hand, it can be noted that acquisitions of reputable companies helped the company to gain a competitive advantage as a result of clearly defined distribution channels that already existed in the market. The other factor that contributed to BRL Hardy’s post merger success is a result of the stance taken towards changing the culture of the organisation. However, the new management which assumed top jobs at the merged companies was comprised of ex-BRL executives and focus was primarily aimed at the Australian market which was believed to be supportive of the company’s quality concerns. However, the company adopted a decentralisation approach whereby the middle managers were given the autonomy to make decisions in their operations as a way of improving the overall operations of their responsible departments. As such, the managers were empowered to make decisions while at the same time holding them accountable to their actions as a way of ensuring that there is conformity with the set organisational goals. By virtue of allowing the managers to make decisions in their operations, the organisation is likely to positively grow given that they will be motivated such that they will also develop a sense of belonging to it. Empowering the managers also helped them to be creative which positively contributed to the growth of the organisation. The other factor of BRL Hardy’s post-merger success can be attributed to the stance it took in sourcing the grapes used in wine production. Having realised that there were risks associated with the production of the grapes, the organisation decided to form joint ventures with different farmers in an attempt to ensure consistency in supply of the grapes even during periods of unprecedented events that can negatively affect supply. On the other hand, the company acquired expansive land to grow grapes and this was a good move given that it was always assured of abundant grapes should anything unfavourable occur in the environment. On top of that, the post merger success of the organisation in question can be attributed to the marketing strategies implemented such as the branding and labelling strategies. Whilst it is generally appreciated that branding a product like wine is a bit challenging from a global perspective, the company adopted a labelling approach especially in UK where it witnessed improved sales of different brands that were offered on the market. 2. Basically, the main essence of tensions between Steven Davies and Chris Carson is mainly concerned with the marketing strategies to be implemented. The head office in Australia was particularly concerned with endorsing the Australian brand of wine while Carson who operated in UK was of the opinion that this brand had been eroded especially in UK hence there was need for branding. This was the major source of tension especially with regards to the marketing strategy. Basically, branding is a basic tenet of marketing strategy given that it makes a clear distinction between different brands. Carson is of the view that there is need to relabel, reposition and relaunch the wine brand particularly in UK but this is an uphill task given that it was difficult to convince the home office which frustrated his efforts of rebranding the products offered as way of attempting to gain a competitive advantage. The head office controlled all the aspects of the brand. For instance, UK was not yet a branded wine market and retailers own brands dominated and this is the reason why Carson was arguing that it can be difficult to support a brand driven strategy given that customers are used to local brands of wine. In fact, labelling is more effective compared to branding given that it will be easier for the customers to become loyal to certain labels than brands since the wine industry was a bit different. In the UK for instance, a label appeals more to the customer than a brand. There has been some misunderstanding with regards to this situation obtaining in the market given that Steven Davies is of the view that he should be in charge of all the aspects of branding and they should represent originality of Australian wine. However, Carson argued that Women for instance account for 60 % of the supermarket wine buyers hence it was imperative for the organisation to have labels that would appeal to this particular target group. This is a source of tension given that Carson sees this move as disempowerment since he is of the view that the head office should retain greater control of the branding of the wine. The other tension has arisen from the fact that the market structure for wine in UK is a bit different from Australia hence the same marketing strategies may not apply in these two countries. Carson tries to convince David that distribution is key in UK and the retail store such as chain supermarkets are used as the main distribution channel of wine in this particular country. There is need therefore to push for acceptance of the brand on their shelves hence careful consideration ought to be taken in as far as labelling is concerned. Basically, creating acceptance for the wine brand is an uphill task hence there is need to appeal to the targeted consumers through the utilisation of the correct labels which is being resisted by Davies. This tension can also be attributed to lack of trust between these two people since it can be noted that there has been a clash of interests whereby it seems as if each of them is pushing for his own agenda which will result in great recognition at workplace following the success of the strategy. It can also be seen that the tension between the two is more of power struggle to control the brand. Davies seeks to retain greater control of the brand on behalf of the head office while Carson is primarily concerned with implementing a strategy that will result in the improvement in performance of the brand in UK in direct response to the interests of the customers. 3. The D’istinto should be launched as a result of different reasons that are going to be discussed below. First and foremost, this brand is likely to be a unique image that is built around the Mediterranean lifestyle depicting warm, passionate, relaxed as well as romantic lifestyle. As such, it can be noted that wine is not solely an alcoholic beverage but can be consumed by different people regardless of their perceptions about alcohol. In most cases, wine that goes along with food is very popular because there are likely to be many consumers of this beverage regardless of their creed and beliefs. On the other hand, the brand image is so captivating and appealing to different customers. The way a brand is portrayed to the customers has a bearing on the way they are going to perceive that particular product. In this case, in can be seen that the image of this brand is very attractive and this will go a long way in appealing to the customers. As the adage goes, “first impressions making lasting impressions.” Once the interests of the customers are captivated at first glance, there are likely chances that they will be influenced to act through purchasing the product. The strategy used in this particular case is very effective given that branding is a very important marketing tool which is mainly concerned with presenting the product in the best way to the potential customers. This brand has to be launched because it is associated with food and the strategy to hang a small booklet where the customers can write something related to free recipes is likely to give this brand a competitive advantage. This will enable the organisation to build a strong database for the customers whereby they can mail them for future promotions. It is imperative for any organisation which is concerned about its viability as well as profitability to promote loyalty among the customers for long term benefits to the company. Form the customer standpoint, there are likely to be many consumers given that thus brand is attractive and appealing to different people. As such, I think this is the most opportune time for the organisation to launch this product into the market since it is likely to appeal to a large number of people. The other reason why this brand should be launched is the fact that the cost related to packaging, branding and other launch expenses is relatively low hence the financial performance of the organisation is not likely to be impacted negatively since little money will be required to launch the product. There are likely chances that production costs will be lowered which in turn contributes to the revenue generated by the organisation in the long run. 4. If I were Carson, I will recommend that Kelly’s Revenge be launched in UK while on the other hand Banrock Station is established in Australia at first as a global brand. Given that a conflict has arisen between these two brands, it will still be fine if these are launched in different countries given that the company will still benefit. A brand developed in UK will appeal more to the consumers in that country while the one launched in Australia will have the potential to appeal to more consumers in that particular country. A successful brand is usually developed in response to the needs of the consumers hence for the sake of the company, these two brands should be launched separately as they will still give it the competitive advantage needed. It seems as if the conflict that has arisen is about out doing each other but the essence is mainly concerned with the success of the organisation. If I am Millar, I will delegate marketing specialists to establish the degree of feasibility of launching these brands in UK and Australia in order to ascertain if the markets in these countries are viable. The wine industry is a bit tricky in that it is different from other beverages which can be consumed by a number of different customers regardless of their age, gender or sexuality. If the market in UK is strong such that it can give the organisation the needed competitive advantage, I will give Carson the nod to go ahead and launch the brand since it will be an added advantage to the organisation. In some instances, product diversification is very important given that if one product fails, then the other product can take over. For the benefit of the company, Miller should ensure that there is understanding between the members of both organisations such that they will share the same vision for the organisation. Read More