6. Risk Management
Take Pro-Active measures :
Research Before enter a new market
Understand the differences between markets and people
Monitor Political environment
Establish partnerships with Locals
Asses the Risk and create a Strategy Plan
7. The entry of Multinational enterprises in
emerging markets
• Goal : Expand Sales -> Maximize Long-term Profit
• 5 Basic Steps Before Expansion research about :
1) Local History, Tradition, Culture and Ethics
2) Currency Value
3) International market trends
4) Local Laws & Regulations
5) Local competition and try to differentiate
8. The entry of Multinational enterprises in
emerging markets
• Going From Local to Global :
1) Exporting
2) Licensing
3) Franchising
4) Partnership
• Preparation, curiosity ,Hard work, Failure & Luck
9. Porter’s Five Forces
Porter's five forces analysis : is a framework for industry analysis and
business strategy
10. Porter’s Five Forces
• Threat of Rivalry
– Brewery in Guangdong (China) is the best in terms of quality
• Bargaining Power of Buyers/Suppliers
– Highly respected globally, strong brand
• Threat of Substitutes
– Somersby
– Beo *
• Threat of new Entries
– Economies of scale
11. Western Vs New Emerging Markets
Lack of Amenities Vs Pay Extra for Safe Strategies
Insufficient resources, lower-budgets, poorer quality
Understand different cultures, develop breakthrough designs
Consumerism, willingness to pay extra for convenience e.g. super-
size
Predicable trends allow for safe planning, but stagnant?
12. Fragmented Vs well Structured Market
nation is not just one market but consists of multiple markets
Take the market to the people
Technology-intensive industries, integrated and broad network
Specialize in various areas of expertise, exploit distribution channels
13. Underdeveloped Technology Vs Developed Banking System
Fast-urbanization - lack of media, roadways and coordination
No switching costs, Room for development and convenient
solutions
Central Bank as the leading authority in the economy
Take advantage of the well-organized banking system e.g. free
movement of lenders/borrowers
14. Markets Are Changing Rapidly Vs Political Stability
Rapid change affects consumer habits
Develop with the market – meet the changing needs
Stable political conditions, international trade, integrated structure
Be as efficient as possible due to the high levels of competition
15. Carlsberg In China
• Carlsberg officially began its business
In China in 1978.
• Competitive environment:
– Dominated By big four players:
• CRB
• Tsingtao
• AB InBev
• Yanjing
– Grew from 18,9% in 2000 to 54,1% in 2009
16. Carlsberg’s Investments in Emerging
Markets
2008-Aqcuisitions of significant breweries
• Scottish & Newcastle together with Heineken
• Baltic Beverage Holdings (BBH) joint ventures
• French Brewer Brasseries Kronenbourg
• Greek beer Mythos
• Equity shares in Chinese brewer Chongqing
2008-Economic Performance Overall
• World’s 4th largest Brewer
• Progress in all geometric segments
• Full control over key parts of business and clearer growth profile
DKK Million 2007 2008
Sales of beers 115,2 126,8
Operating Profit 5,262 7,979
Net profit 2,297 2,631
Net Revenue 44,8bn 59,9bn
17. 2008-Economic Performance in 3 Regions:
Northern and Western Europe (47% of total volume)
• Second largest brewer
• Region consists 62% of Group revenue
DKK Million 2007 2008
Total beer
44,4m 51,0m
Volume(hl)
Operating Profit 3,383 3,953
Net Revenue 32,087 37,128
Eastern Europe (43% of total volume)
• Region accounts 32% of Group revenue
• Russian market accounts 85% of net revenue
• In Russia and Ukraine, very strong market position
• Investment undertaken resulted in growth
• Full control over former BBH business
• Company outperforms from rest market (Baltika)
• 69% increase in total beer volumes comparing to 2007
• Increase in net revenue
18. Asia (10% of total Volume)
• 6% of Group Revenue
• China: major growth engine
• Leading international brewery /Leading brewery group in West China
• Although Asian economies slowed down, strong growth continued
• Beer volumes increased (16% )/Net revenue climbed 23%
• 40% increase in operating profit
Carlsberg’s Financial Position and Performance in Last 4 years:
• Fourth largest brewer in the world /Large portfolio of beer and other beverage brands
• Brand of Carlsberg : one of best-known brands in world
• Baltika,Carlsberg and Tuborg : among biggest brands in Europe
• In 2011 :rising input costs and challenging Russian Market.
• Northern & Western Europe and Asia: stable growth
• Eastern Europe :decline in market of beer (loss of market shares in Russia)
• Increased revenues compared to previous years
DKK million 2008 2009 2010 2011
Net Revenue 59,944 59,382 60,054 63,561
Operating Profit 7,978 9,390 10,249 9,816
Sales
149,1 159,2 159 162
Volume(million hl)
Total Assets 142,639 134,515 144,250 147,714