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Untitled Prezi

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Amirul Anwar

on 22 July 2013

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Expansion & Diversification
Presented by
Case Background
Carlsberg
Incorporated in 1969.
Came to Malaysia after two years incorporated through brewing Carlsberg Green Label beer for Malaysian Market.
Carlsberg Brewery Malaysia Bhd (Carlsberg) market leading company that hold 50% shares of beer and stout market.
Owned by the Carlsberg Group of Denmark.
Cont...
Carlsberg Malaysia Sdn. Bhd. one of the subsidiary that wholly owned become main marketed locally product.
Carlsberg enter into many investment and acquisition through all the years.
Competitor in the same industry Guinness Anchor Bhd.

Case Background
ABC Consulting Sdn Bhd
Consist of David as one of the consultant and Robert Stanley as a Head of the company.
Specialised in business turnaround.
Mr. Stanley suggested that the company to focus more on cash-rich company that want to expand, diversify or venture.
David grab the opportunity by looking beer and stout company and found that Carlsberg Company as a target.
Cont...
By looking through Carlsberg position, David feels that expanding is not worth it and cannot able to sustained their profit.
He prepared himself with information before approaching Calrsberg company regarding the diversification activities.
Also take and opportunity by selling his idea of manucfacturing sparkle grape juice (halal product) once the Carlsberg company tend to choose to diverse by taking Guinness as an example.

ABANG MUHAMAD ZAIM BIN ABANG ALI (AC085005)
AMIRUL BIN ANWAR (AC085019)
AZRIEE AMIRUL BIN MOHD ARIFFIN (AC085025)
EVLYN JOHNNY (AC085035)
MOHD SYIMIR BIN ABDOL RAZAK (AC085085)
MUHAMMAD IZZAT SYAMIL BIN SAMSUDIN (AC086....)
NUR AIN ZAHIAN BINTI MOHD LATIF (AC085137)

NPV Calculation
Carlsberg
NPV = [201,226(1.12)-1 + 216,774(1.12)-2 + 227,017(1.12)-3] – 200M
= - 199,485,936.8

Illustration
ABC Consulting Sdn. Bhd.
>Robert Stanley (Boss)
>David (employee)
Carlsberg Brewery Malaysia Bhd
VS
Guinness Anchor Berhad
Q1 ) STUDY THE FINANCIAL STATEMENT OF CARLSBERG AND EVALUATES ITS FINANCIAL POSITION, IN TERMS OF FINANCIAL RATIO ANALYSIS, USING THAT OF GAB AS A BENCHMARK
Ratio Analysis (Carlsberg)
Ratio Analysis (Guinness Anchor)
Ratio Analysis (Guinness Anchor)
Q2 ) DO YOU THINK CALRSBERG IS IN A POSITION TO EXPAND?
PESTLE Analysis
No, as based on PESTLE analysis.
>Political
Increase the potential of lobying and intervention of government.
>Economic
Difficulties in searching labor, capital, land and entrepeneur.
Higher cost from remaining activities might impact the cost in acquiring another sources for expansion.

Cont...
>Social
1.Create issues for the Muslim
2.Can be proved through the hard ban in Malaysia regarding the alcohol advertisement on 1995.
3.Since 1997 until now, any sponsored by hard liquor are banned in the ASEAN Football Championship.
>Technology
1.Required additional machine when expanding company.
2.Incurred more cost on maintenance and acquiring a new machine to add more capacity of the products.
Cont...
>Legal
1.More focus on tax requirement.
2.Expansion might increase the continuation of tax on beer and stout industry.
3.Proved from The Star mentioned that excies duties and taxes will increase in the future.
>Environment
1.Increase the polution (sound, air and water)
2.Lead to global warming
3.Weather and climax change (from chemical waste)
4.landslide
5.flood
6.heavy rain

Q3 ) DOES THE COMPANY HAVE SUFFICIENT FUNDS TO FINANCE AN EXPANSION? IF NO, WHAT OTHER SOURCES CAN THE COMPANY TAP INTO?
Sources For Expansion
>Issuing Debenture
1.long term loan (form of loan)
2.Issued to finance the long term requirement
3.Many type of debenture that can take by the company such as secured and unsecured.

>Issuing Preffered Stock
1.One way in increasing capital
2.In the case of profits limited, the owner will be paid their dividends after the bondholder receive their guaranteed on interest payment.

Cont...
>Selling Common Stock.
1.Another way in increasing the funds
2.Investment bank help in issuing the stock and will purchase the stock at stated price if no public purchase made.

>Acquiring loan from the Financial Institution.
1.Can acquired from investment bank
2.In return, the bank will mortgage companie's property such as shares or stock.
3.Any return made need to allocate for the monthly installment in paying the bank.

Cont...
>Public Deposit
1Easy way in mobilizing funds.
2.Companies Act permit such activities in order to increase the fund
3.Can be done by inviting the shareholders to keep invest in their company.
4.One way to decrease expense as the interest paid much lower than bank interest.

Q4) Conduct a SWOT analysis to look into the strengths, weaknesses, opportunities and threats facing Carlsberg if it undertakes the proposed sparkling grape juice enterprise.
Strength
1.To be well-known to other countries and this will improve the global presence of the brand.
2.A larger scale of production with greater capacity.
3.Strong customer and brand loyalty.
4.Capabilities of adapting to new environmental policies.
5.Market leading positions.
Weakness
1.Difficult to find expertise in areas of lacking especially in terms of creating new things.
2.The quality of main product decreases.
3.Lacking in technology aspect especially in high-end machinery.
4.Large base of total cost.
5.Facing a large Muslim population which are against this product because of their strict halal requirements.

Opportunity
1.Increase in income and liquidity and possibilities for greater advantage of economies of scale.
2.Enlarge in scale of customers.
3.Attract more investors.
4.Increasing growth in premium segment.
Threats
1.Strict rules and regulations.
2.Greater cost especially during production and research development.
3.Difference in culture and beliefs.
4.Product substitutes.
5.Highly competitive in the global market.

Q5) What are the difficulties that Carlsberg is likely to face in branding a ‘halal’ soft drink manufactured by a beer company?
Difficulties In Branding Halal Sofy Drink
Close down the factory
Acceptance of customers
Costing
Uphold investor
Highly competitive
Hard to obtain information regarding the halal product
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