The Brewery Group Denmark

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Exploring Corporate Strategy
CLASSIC CASE STUDIES

The Brewery Group Denmark: Faxe, Ceres and Thor
Flemming Agersnap
The case study explains the strategic moves of Brewery Group Denmark (BGD), a small Danish brewery fighting for a position in a world market. The case shows how small companies can co-exist with giant competitors in an international context and how a coherent international strategy can be built whilst allowing for different local strategies. BGD is an example of a firm which has achieved a distinctive position in a highly competitive industry by focusing on importing Danish beer into selected markets, through a network of alliances. The case provides an opportunity to consider the strengths and weaknesses of the company’s
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Carlsberg owned 38 per cent of the predominantly nonvoting B-shares of Ceres, but without a seat on the board of the company. Carlsberg declared that it had no wish for a more active role in the management of Ceres or BGD, rather its involvement was said to be an investment for financial reasons. Others argued that the investment could be seen as a defensive investment guarding against a foreign acquisition of Ceres.

Exhibit 2 Organisation diagram (simplified)

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The Brewery Group Denmark: Faxe, Ceres and Thor

INTERNATIONAL DEVELOPMENT
Despite the dominance of Carlsberg, in its annual report BGD could lay claim to being the largest Scandinavian beer exporter. This was because Carlsberg placed emphasis on licensing agreements or local production for its foreign markets, while BGD’s strategy was export led: ‘Eighty-three out of every hundred bottles of beer that we produce are sold in foreign markets.’ By 1995 the percentage of export sales by region of the world was as follows: western Europe 63 per cent, the Americas 10 per cent, eastern Europe 22 per cent, others 5 per cent. The development of BGD’s operations in some of these markets is now reviewed.

Italy
More than 30 years ago, Ceres entered into co-operation with a slaughterhouse for pork (Tulip) in a
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