Carlsberg in Emerging

Markets

Submitted By: Aditya Kaul (44)

Introduction
In 1847, Carlsberg A/S was founded by J.C. Jacobsen in
Copenhagen, Denmark
First foreign brewery was established in Malawi in 1968
In 2007, company had held a portfolio of 75 breweries around
the world and sold approximately 115 million hectoliters of
beer in more than 150 countries
Carlsberg focused on the mature beer markets of Western
Europe, the growth markets of Eastern Europe and emerging
markets of Asia
Carlsberg is the fifth-largest brewing company in the world

Continue.
In 2000, Carlsberg gets 50% ownership in Baltic Beverages
Holdings (BBH), by getting merge with Orkla ASA
2008, Full ownership at BBH
In 2000, Carlsberg did Joint venture with Thai company
Chang Beverages Pte Ltd, which was a leading player in Asian
markets for alcoholic beverages
Carlsberg faced serious loss in time and money by this Joint
venture, as they had many disagreements in between
In 2003, Carlsberg focused on western China and got first
mover advantage

Emerging Market Strategy

3 Different Markets
Western European

Eastern European

Emerging Asia

Maturing market

Fast growing
market

Changes in
consumers
behavior-health
consciousness

Strongest position Low labor cost and

in the regions
cheap raw material
main market
(Russia)
Change in market
regulations

Worlds largest market

in terms of production
and consumption
(China)

Continue.

Companys Strategies: Focus on value creation, profitable growth by

penetrating foreign markets which geographically divided into 3 regions
Western European

Porters Five Forces Analysis on the two investigated

region
Russia and China

Carlsberg in Russia

Porter five forces analysis on Russian beer market

Threat of New Entrants (Low)

Carlsberg in China
Porters five forces analysis on Chinese beer market
Threat of New Entrants (Moderate)

Firm Analysis

SWOT Analysis- Russia

Strengths
Beer market leader with strong

brand image and brand awareness

Strong distribution channel,
creates accessibility
Company owned Baltika, the
best selling brand, accounted for
38% of Russian beer market share
Economies of Scales of
Production
Effective vertical integration and
Cost efficiency

Weaknesses
Difficulties of financing the

expansion since the failure of the

consolidation, which leads to the
increase in companys debt
Company is unable to secure
growth and future

Continue
Opportunities

Threats

One of the fastest growing beer

market in the world
Hike in taxes on liquor resulted in
the increase of prices of vodka, this
will help in increase the
consumption of beer by the
Russian people
Beer market trend is also
booming in the Eastern Europe

Rapidly consolidation may

increase the competition in the

industry

SWOT Analysis- China

Strengths

Weaknesses

Untapped market opportunities

Southeast dominated by other

in western China
Developing market
High growth rate of 8%
comparing to US and EU
Large population

large players
Requires large investments in
production
High barriers to entry

Continue
Opportunities
Future extension into central
and southern regions
Product line expansion
Possibility of introducing new
premium products in future

Threats
Consolidation of competitors

Failure in acquiring partners

and doing acquisitions

Market Analysis- Russia

Beer is the second most preferable drink after vodka, it seen as
a healthier alternative by many consumers
Between 2005 to 2007, sale of beer increased to 30%
During 2008, consumption of beer started to decline due to
government plan to cut alcohol consumption
More than 80% of beer market in Russia is dominated by five
key players
In 2007, Carlsberg was the leader in the market with 37.6%
share

Market Analysis- China

Chinas beer industry has enjoyed massive growth over past
three decades
More than 200 domestic brands and 100 foreign brands are
competing to gain market share in Chinese market
Big foreign players has merge with domestic major players in
the industry and account for more than 50 percent of market
Low alcohol beer demand is growing in the market

Challenges
How can Carlsberg maintain its position in the saturated and
highly competitive market?
How Carlsberg A/S could successfully continue to capitalize
on its growing engagement in emerging markets?

Recommendations
To maintain current position in the market and expand to
untapped areas, Carlsberg should try to rejuvenate or
reposition themselves in global market
To maintain their current market position in western Europe,
they should diversify to health promoting beverages due to
new govt. policies and minimize cannibalization
To maintain position in Russia and grow in other parts of
eastern Europe, Carlsberg should acquire and expand more in
near by countries of Russia and do product line extension

Continue
To continue to capitalize on its growing engagement in
emerging markets of China they should promote premium
products in urban China and low cost but high quality products
in rural China
They should focus on improving efficiency in production by
using economies of scale, implementing new technologies in
production and better packaging
They can establish their own distribution system in China to
boost the sale and capture more market, by capturing small
vendors also

Continue
They can conduct market research in emerging markets to
understand the taste & preference of domestic consumers and
innovate their product accordingly
They can segment the market region and income wise of the
consumers, as same products cannot be served in different
categories

Thank You