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BRL Hardy Australian Wine Company

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by

Christine Chang

on 14 January 2014

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Transcript of BRL Hardy Australian Wine Company

BRL
BRL Hardy Wine
Group members
Christine Chang
Annie Pan
Sunny Chuang
Neville O'Reiley
Maria Fernanda
Quevedo
Adriana Kiel
Enrique Valladares
Juliana Burrows
Hardy
Founded by Thomas Hardy in 1853
Largest winemaker in Australia
Polite & Traditional Value
Award-winning quality wine
Acquired importer distributor & wine vineyards
Berri Renmano Limited
Formed in 1982
Aggressive & commercial culture
In 1990, 500 growers delivering 50,000 tones
Second largest in Australia
Access to fruits, funds, & disciplined management
Marketing expertise, brands, & wine-making know-how
The Merger in 1992

Critical circumstances for both:



Struggling in expansion & upgrade its business



Financial issues with banks & Recession in Europe
BRL...
Company's History
& Background

Management
& Strategy

Global Markets
BRL Hardy's
Competitive
Advantage

WHY?
BRL
HARDY
The Domestic Turnaround
Relaunching International
Q&A
Globalizing an
Australian
Wine Company

Strategic Synergy
Australia's largest wine producer
More than 150 years of experience
Brand portfolio
Industry trends
Conclusion
Following the merger...
EX-BRL executives assumed the majority of top jobs at BRLH
1st
deal with the financial situation
2nd
integrate the two organizations
How?
selecting a management team
that could both cut down the extra workforce & position BRLH for growth
and focus on the Australian
market.
Only after getting these 2 priorities straight they could focus on new strategies
New Strategies
New Management...
Strategy
Protect their share of the bulk cask business but concentrate on branded bottles for growth
Focus more on the domestic market, first getting merger efficiencies, then implement the new strategy
Then...
1st Priority
Clean up the operating problems that were the source of financial problems
To Do
Reposition key brands in a step-stair hierarchy...
Simple entry level products
Fine wines for connoisseurs
Build a strong quality brand image under the slogan :
"Quality Wines for the World"
United Kingdom
Centralization vs. Decentralization
Centralized approach:
Headquarters supported the idea that all labeling, pricing and branding decisions should be in the hands of the Australian management.
U.S.A
Japan
Australia
European Union
.
Management in expanding Companies must have a concentrate effort to avoid agency problems by combining different organizational structures that could fit in their respective objectives.
BRL Hardy's Wines Main
Consumers
Decentralized approach:
U.K. Management thought marketing decisions should be made with
key influences of the local market.
Mention 3 countries
where BRLH export their products
Please mention 3 of the
company's competitive advantages
Australia
Answer:
Answer:
More than 150 years of experience
Answer:
Australia's largest wine producer
Strategic Synergy
Brand portfolio with distinctive brand values
Management
Mergers are well suited strategies for companies in financial need or wanting to expand, however, organizational restructure is probed to be a failing point for these
.

Conservative industries, can be transformed in terms of operations, trade and marketing, without affecting the value of their output.
Transforming into a world brand...
From Local Winery and Distributors to Global Producers
Exporting and creating own production in Association with Chilean producers.
Joint
Ventures
Direct Investment
Working together with Italian Cooperatives
A global brand
The Prerequisite of Delegation
What did the CEO want?
The Road to a New Strategy
Change the company's culture & management style.
"I want to delegate the small risks ... to create a have-a-go mentality."
The objective
Managers had to be willing to :
Challenge the status quo.

Accept responsibility for the outcomes of their decisions that were delegated.

Admit when they made a mistake.
The new management style was not easy for everyone to adopt
David Woods
Integrating 2 sales forces thus ...
capturing the economies from the combination
"Many of us from Hardy felt like outsiders, unsure if we would be allowed into meetings. It became easier after the first year or so when we had shown you could perform. But you definitely had to earn your stripes"
Repositioning the product portfolio in line with the new strategy
By emphasizing quality branded bottles sales
Helped to increase profitability significantly
He "earned his stripes" by....
However...
In which country is Hardy the biggest wine maker?
United States
Japan
European Union
Australia
United Kingdom
Updated Info of Acquisition
Hope you enjoyed it!
Create a more decentralized approach, but to hold management accountable.
to have everyone trying 20 projects and getting 80% right rather than doing 1 or 2 big projects that had to be 100% right.
Steven Millar
1992
2011
Regarded by CEO as a :
"First-class Strategic Marketer"
Hired to BRLH as :
Group Marketing and Export Manager
While the rest of top management's attention was set on major restructuring and domestic operations ...
Stephen Davies
Davies...
was evaluating BRLH's international operations.
WHAT DID HE FIND?
A dispersed portfolio of marginal-to-weak market positions
a UK business selling small volumes of Hardy wine & just breaking even
a rapidly eroding BRL bulk business in Sweden
A weak Hardy US presence supported by a single representative
A virtually non-existent presence in
ASIA & THE REST OF EUROPE
Different Market Segments
Created new Strategie
s
The Objective
2008
2003
How to expand their brand to other countries which are also famous for producing wine?
Weak market positions in EU UK etc.
Operation problems induced financial losses.
Build an export strategy based on strong branding.
Brands step stair hierarchy.
First restructuring of the overseas operations by Davies/Carson:
Three key strengths they exploited to build mass market brand.
World class production facilities.
Global brand recognition.
International Distribution.
Sourcing multiple regions minimized risk as crops are vulnerable to disease weather etc.
Overcome traditionalist market view
Through the acquisition of Whiclar & Gordon
Merger Berri Renmano Limited (BRL) & Hardy BRL Hardy Ltd.
BRL had similar problems and looked for new opportunities
BRL became financial partner of Hardy Merger in 1992
Put together fruits, funds, expertise, brands & winemaking know-how BRL Hardy Ltd.
HOWEVER...
17% of the national wine exports 22% of the Australian wine market still facing losses and had to apply a huge transformation
BRL Hardy’s success
is influenced by the 2 different grown complementing companies
Hardy
An award winning traditional quality company with marketing expertise and brand recognition.
Fortified, bulk and value wines and its grape resources.
BRLwas the driving force providing the money to Hardy allocating most of the top managing jobs and the leading spirit
Full transcript