There's nothing serious in mortality.

All is but toys; renown and grace is dead, The wine of life is drawn, and the mere lees Is left this vault to brag of. --- William Shakespeare (1564-1616) Macbeth, II. iii. (100)

BRL Hardy:
Globalizing an Australian Wine Company
Parimal Kumar Shivendu PGP/14/285 International Business -Sec-E

2011
There's nothing serious in mortality. All is but toys; renown and grace is dead, The wine of life is drawn, and the mere lees Is left this vault to brag of. --- William Shakespeare (1564-1616) Macbeth, II. iii. (100)

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1. What are the specific factors that have contributed to the remarkable success of BRL Hardy following its merger? No success is result of one factor. Its always a combination of factors that result into success. Following are the factors that can be identified as the contributor of the remarkable success of BRL Hardy following its merger: a. Concentration on Home Market: At the time of merger both the companies BRL and Hardy were bleeding financially. Top management set itself to consolidate first in financial terms. Australia also happened to be the place form where vast bulk of the profit was originating. This led BRL Hardy to concentrate on the domestic market to set its financial fundaments correct. b. Protect the Bulk cask and grow with Branded Bottle: To hit upon the financial distress that both the companies were facing they devised a balanced strategy. As BRL had the specialization in bulk cask selling of wine as compare to Hardys competency in selling branded wines, Millar decided to vision the company growth in Hardy mold and to just try and protect the BRL mold. They also understood that Quality is the only savior for the support of brands. c. First getting the merger efficiency and then implementing new strategy: Merger was between two completely different companies in terms of their product profile and also in terms of their managerial styles. So to work together for a successful venture it was of prime importance that sufficient amount of concentration should be given to make the merger efficient before launching new strategy d. Change in companys culture and management style: In ex-Hardy team, mangers approach towards coordination was HQ centric. Specially the midline managers and subsidiary mangers. They were mere implementer of strategies rather influencer of strategies. Millar wanted to change it. He wanted to have more decentralized environment were ideas can flow from all sides. Managers post was envisioned as entrepreneurial. He wanted 20 decisions to be made by 80% success then 1 or 2 decisions with 100% success. e. Earn your stripes:

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Though Millar vouched for a decentralized environment but at the same time he believed in controlled decentralization. Hence for that he gave freedom to those who proved themselves by doing something considerable. This increased the sense of purpose and motivation in mangers to excel in their respective locations f. International Relaunch: While the Initial concentration was the cleanup of domestic operation problems to overcome the financial distress, Millar also appointed Davies is see and device a strategy to consolidate its international position. Davies started it by the marketing slogan of Making Quality Wines for the World. He rationalized the wine product line for export to increase the focus on few lines and hence better performance. g. Strategic shift-International wine company instead of Quality Exporter: Down the line company didnt try to bind itself as just an Quality Exporter, rather he tried to envision itself as an International Wine Company something that was nonexistent in the world arena.

2. Identify the specific sources of tension between Mr. Davies and Mr. Carson. How has Mr. Millar been able to handle these differences? How would you rate his performance? What feedback would you give him? Following can be specified as the sources of tension between Mr. Davies and Mr. Carson: a. Marketing Strategies (Branding and Labeling): Erosion of Entry level brands, Stamps and Nottage Hill, of Hardy that constitute 80% of sales by value and even more by volume made Carson to think of their relabeling, repositioning, and relaunch. [Davies Yielded but become more concerned about local control over branding, labeling, pricing decisions as against the companys local long-term strategy to become an International Brand.] b. Long Term Strategy Conflict:

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Against the conventional wisdom that wine consumer has anti branding mentality and for one international brand bending of branded product to help consistency in produces which doomed to have unsatisfactory results, Davies and Millar saw an opportunity of making BRL Hardy an International brand. Davies and Millar saw changes in wine-making, liberalization of global market and changing consumer profile as the pillars of their dream. Carson stood against Davies belief as he saw Australian and UK market to be at corner of stick in terms of Nature of market. He argued wine market in UK is off-trade market whereas in Australia 90% of the sales is in on trade market. Only 12% sales were of recognized propriety branded wines in UK market. c. Cannibalization of Stamps and Nottage Hills by extended Sicilian line product: Both Stamps and Nottage Hills and Sicilians line product were priced in same range- Stamps ( 4.49) and Nottage Hills (5.49) and Sicilian products (3.99 to 5.99). d. Banrock Station v/s Kellys revenge: Both Davies and Carson tried to launch new brands Banrock Station and Kellys revenge respectively in the same low price range European market. This led to biggest confrontation amongst them.

Handling of Conflict by Miller: a. Miller gave freedom to Carson based on his superior performance in U.K market. Millar clearly understood that need of both Davies and Carson. Hence to maintain the balance he changed the reporting hierarchy of Carson to avoid confrontation but he promoted the negotiation for better handling of confrontation. b. Miller always took passive role in resolving the conflicts. Instead of imposing his decision in to resolve the conflict, he tried to prove it with example that one stands the stronger position then the other as evident in the Banrock Station v/s Kellys revenge. He called for a test in U.K based grocery chain for testing the Kellys revenge product instead of imposing the Banrock Station which he was supporting on Carson.

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c. He valued progress more and he saw the conflicts as the constructive tool to progress. d. The promotion of Carson also shows how well he handled both the parties.

In my opinion he has handled it well as the progress also suggests growth of 70%. As for feedback I would say he must continue in this fashion supporting the entrepreneurial nature of mangers and balancing their wayward act by setting examples not by imposing rules. Imposing rules will only kill the enthusiasm in mangers.

3. Should Mr. Millar approve Carsons proposal to launch Distinto? Defend your response with strong evidence and arguments.

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The cannibalization effect and lack of sales teams strength in carrying out another brand makes a strong case against the launch of Distinto. As no matter how strong brand proposition is on paper you cant jeopardize your existing successful brands. Here the probable cannibalization will lead to same effect. At the same time as Carson himself agreed that European wine market needs more of Pull strategy then the push strategy for a wine to succeed. Hence it calls for strong sales team. Whereas case clearly mentions that sales force strength was not as such as they could carry one extra brand. Hence launch of Distinto in such a resourced constraint scenario with a market in which Pull works better then push doesnt make much of a case for itself. Hence Distinto should not be launched.

4. What recommendations would you make to the organization concerning the conflicting proposal for Kelleys Revenge and Banrock Station? Clearly identify a possible HQ decision and supporting evidence as well as a Subsidiary perspective before making your choice.

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[Subsidiary Perspective]

[HQ Perspective]

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Instant success of Banrock Station in other markets and the failure of Kelleys revenge in its own market create a strong case for Banrock Station. Moreover Banrock Station is getting HQ support also in making it a true International brand which is aligned with the long term strategy of BRL Hardy.