Absolute Vodka: Defending A1.0-Executive Summary V&S Group, a Swedish Company Owned by the Government Created V&S Spirits to Produce Market and Sell Absolut Vodka Which Is the Company’S Strongest Brand (Created in

5052 Words Aug 22nd, 2010 21 Pages
Absolute Vodka: Defending a1.0-Executive Summary V&S group, a Swedish company owned by the government created V&S Spirits to produce market and sell Absolut Vodka which is the company’s strongest brand (created in 1979). To maximise the brand’s market share and strengthen its competitive position, the company established a jointed venture called Future Brands LLC to distribute its products more effectively strictly in the USA, which is Absolut’s strongest market. Although the brand is the second largest premium vodka, its market share is threatened by the constant growth of the market leader Smirnoff. Therefore, V&S Spirits need to take further measures to ensure its brand’s image and market share is protected and advanced. V&S’s …show more content…
Since its launching in 1979, the brand has continued to achieve enormous success with a steady increase in sales volume and is now being sold in 126 markets nationwide, with North America being its top market. In the year of 2001 and in an attempt to be more aggressive in terms of increasing the brand’s market share, V&S Spirits formed a joint venture with Beam Global Spirits called Future Brands LLC to distribute Absolut Vodka strictly in the USA which is by far considered the brands strongest market. Additionally, the company acquired shares in Maxxium Worldwide which became the distributor of Absolut Vodka in 60 other major markets around the world. Although Absolut Vodka retains a strong position in its market segment, the brand is faced by the constant and threatening growth of Smirnoff, its biggest competitor and the world’s market leader. Furthermore, Absolut’s position in its biggest market, the USA has reached saturation and has low brand awareness in major markets like Eastern Europe (which is a strong consumer of vodka) compared to Smirnoff. Therefore, further analysis and action need to be taken by V&S either to preserve or to increase its strongest brand’s market share 4.0-Advantage/Disadvantages of joint venture: The decision of V&S to form a joint venture with Jim Beam brands and establish its own distribution company in 2001 seems to

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