Carlsberg Brewery Activities and Production
Carlsberg Brewery Activities and Production
Carlsberg Brewery (M) Bhd. is the market leader in the beer market with the share of over 60%. Carlsberg primary activities are production, sales and distribution of beer. Carlsberg emphasizes the importance of quality and strong competitive positioning of brands and services to the benefit of all links in the value chain. The group’s continued growth and increase in profit is to be ensured through reinforced activities in present markets. Carlsberg’s investment in The Lion Brewery Ceylon Ltd. also contributed to the group’s profitability. However, the group is now facing threats from the government regulations and substitute products.
With the PEST model, Carlsberg is found to be largely influenced by government policies, the economic condition and also the Malaysian social-cultural perception on Carlsberg. From the Porter’s Five forces model analysis that Carlsberg is found to be enjoying the dominance market power and facing certain threats of substitute from smuggled beer, local spirits (samsu) and soft-drinks which is the most popular thirst quenching choice for Malaysian. However, Malaysian is very brand conscious and due to the high product differentiation of Carlsberg, consumers stay loyal to the brand.
A thorough competitor analysis reveals the strength and weaknesses of Carlsberg. Overall, the group has better performance than its competitor in sales and profitability. A thorough financial analysis also reveals the strength and weaknesses of the group.
A SWOT analysis concluded the strengths of Carlsberg in its brand image, quality, strong financial position and distribution network. The weaknesses of the group were the exposure to the changes in foreign exchange and regulatory changes. Carlsberg is also facing the opportunities of new market like Thailand and Indo-China, economic factor, social factor and high demand, and the threats of concerning groups, substitute products, and taxes, at the same time.
Based on the thorough analysis conducted and the strategic options from TOWS analysis, recommendations were given, which mainly urges Carlsberg to adopt low cost production efficiency. This strategy allowed the company to concentrate on its core competency and at the same time, improve on its weakness and to overcome the challenges and volatile threats.