Jack Daniel Market Entry Strategy

Topics: European Union, Member State of the European Union, Jack Daniel's Pages: 11 (3752 words) Published: April 22, 2013
Market Entry Strategy for Jack
Daniels (Brown-Forman) to Germany

Products Being Exported
Consumer: Jack Daniels Old #7 Whiskey
Industrial: Jack Daniels signature Whiskey Barrels

International Business Policy 490

Market Entry Strategy for Jack
Daniels (Brown-Forman) to Germany

Brown-Foreman Company
The Brown-Forman company who is the owner of the Jack Daniels brand since 1956 was founded in 1870 by George Gavin Brown, a young pharmaceuticals salesman in Louisville, who had the then-novel idea of selling top-grade whiskey in sealed glass bottles. Since then it has grown into a company that in fiscal 2006 had sales of 2.4 billion dollars. The Brown family controls more than 70% of the voting shares. “This isn’t a History Lesson, This is Jack Daniels”

“Was it simply his lucky number? Some say that Jack Daniel had seven girlfriends or the #7 train carried his barrels. Only Mr. Jack knows the real reason.” Jack Daniels was founded in 1863, at age 13 Jack Daniel owned his first whiskey still. The United States licensed its first ever distillery in Lynchburg, Tennessee in 1866. This site is where Jack Daniels whiskey is still produced, today. Jack Daniel’s whiskey has become the top-selling whiskey in the United States due to few safety concerns involved in the distilling process. Also, prioritizing quality was Jack’s other focus, he said, “Every day we make it, we’ll make it the best we can.” Market Overview

Germany is politically as well as economically one of the most important countries in Europe and the European Union. Due to its geographical position, its good infrastructure and its legal certainty, Germany is the first choice for many foreign companies when establishing a Representative Office or a subsidiary for their entry into the European market. The German economy is the world’s fourth largest and accounts for more than one-fifth of the European Union’s Gross Domestic Product.

The United States largest European Union trading partner is Germany, also, being the sixth largest market for United States exports. Germany’s economy follows free market principles with a considerable degree of governmental market regulations and generous welfare programs. Germany has a welcoming attitude towards foreign direct investment (FDI). The German market is open for investment in practically all industry sectors, and business activities are free from regulations restricting day-to-day business. German law makes no distinction between Germans and foreign nationals regarding investments or the establishment of companies. The legal framework for FDI in Germany favors the principle of freedom for foreign trade and payment. There are no restrictions or barriers to capital transactions, currency transfers, real estate purchases, repatriation of profits, or access to foreign exchanges. Economic Data

Year| Average Unemployment rate| Annual Inflation rate|
2008| 7.8%| 2.6%|
2009| 8.1%| 0.4%|
2010| 7.7%| 1.1%|
2011| 7.1%| 2,3%|
2012| 6.7%| 2,1%|

Consumer: The largest consumer market in the EU is Germany, with a population of over eighty-two million. Enormous amounts of trade are conducted in Germany. Germany’s geographic location in the middle of the 27-member EU makes Germany a favorable gateway for many US companies to build their global expansion strategy. With Germany being the largest consumer market it gives the opportunity for Jack Daniels to gain a high value in market share. Industrial: A recent study conducted by the American Chamber of Commerce highlights the positive regard, in which the German business environment is held by US companies. US companies indicated that for the industrial market, 73 percent of participating American companies named Germany as their first choice for market entry; followed by Eastern Europe (57 percent),and Western Europe (33 percent). This is a good statistic for Jack Daniels because it shows that other companies are...
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