What are the driving forces behind BRL Hardy to become a global company? BRL Hardy is the result of the merger of two competing Australian companies “Thomas Hardy & Sons” and “BRL” in 1992. While both companies were financially struggling, they believed that the merger would help them to cope with their problems as one big firm. Although both companies were following rather different strategies, this merger was a win-win situation. While Hardy was bringing in marketing expertise and winemaking know-how, BRL had access to fruit, funds and disciplined management. BRL Hardy’s success can be attributed to a large extent to the complementing opportunities of both companies.
In the early 1990s the wine industry underwent a huge transformation. From then on, New World countries were exploiting the wine industry and customers were getting more sophisticated and discerning. A new market consisting of high-quality wines was created. But at that time, about 70% of BRL Hardy’s sales were accounted for low-margin French wines and they could not meet the demand of these new customers. Hardy’s business model was entirely focused on exporting high quantities of low-margin wine products. Millar, managing director at that time, decided that it was time for a new business model.
Between 1991 and 1998, BRL Hardy increased its foreign sales from $31 to $178. This huge increase was thanks to the development of the company’s new business model. After the merger in 1992, CEO Millar was going to implement a new business strategy to become one of the world’s first truly global wine company. The major objective was to become an international wine company, not just a quality exporter. World-class production facilities, global brands and international distribution were three core strengths. Before integrating the company’s new strategy, the financial situation should be recovered by concentrating on the Australian home market. A first major objective was to create a...
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