Brown Forman Corporation Case

Case Study – Strategy Report

Brown-Forman Corporation
(Jack Daniel’s)

Strategic Issues Considered:

Resource-Based View
Product/brand reputation
Organizational culture

International Expansion

Sustainability Risk

Course: Strategic Management

KEY ISSUES From reviewing the book case study and researching the Brown-Forman Corporation, there are several key strategic concepts and issues that characterize the company. The issues addressed in this strategy analysis include the strength of their product and brand reputation, international strategy, and future sustainability of Brown-Forman’s successful wine and spirits products. From a Resource-Based View, Brown-Forman has
“You don’t have to be a giant to succeed,” said John Wakely, an analyst at Lehman Brothers, “From a consumer viewpoint, the fact that they have this giant portfolio is immaterial. It doesn’t affect your enjoyment. The history of consolidation in this industry hasn’t been a very good one. The success stories have been about individual brands, not success through consolidation” (Bagli 1). However, the companies that have merged and consolidated, such as Allied and Guinness have used this process to become dominant forces within the liquor industry. Consolidation allows for companies to enhance sales and is intended to give liquor companies complete control of their products (New York Times 1). “If you don’t go out there, the best distributor will belong to a competitor,” said Fiona Mathieson, an industry analyst. “By controlling brand and product rights through the point of sale, your own management skills are at test. You are effectively wiping out the competition” (New York Times 1). Therefore, the theory of consolidation allows for a company to build a single brand with many companies, and eliminate the struggles in succeeding with a one-brand company. In all, the main objective in the liquor industry is to grab the biggest piece of market and create strength with the
is a leader in the spirits industry. They cover a wide variety of alcoholic beverages including beer, liqueur, and wine, and are the only US company to be involved in all three areas. The majority of their sales come from their wine department. They specialize in selling wine in both the US and globally across Europe. Their most famous wines are Fanciscan, Arbor Mist, and Ravenswood. The spirits division includes Fleischmann’s gin/vodka, Black Velvet whiskey, and Skol gin/vodka. They are present in over 150 countries and strive to market the diversity of their spirit inventory (Hoovers, n.d.). They sell products in North and South America, United Kingdom, Europe and Asia. Their strategy is not to rely on one specific category for their business to grow. Although wine does account for 55% of their sales, they like to keep their options open for numerous other spirits to be marketed and distributed to target a vast