Strategic Analysis - Brasseries Kronenbourg

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Outline the main resources and competences of “Brasseries Kronenbourg”, identifying the ways in which they contribute to its strategy. ____________________________________________________________ __

Rather than immediately delving into an analysis dealing with resources and competences, attention first turns to Brasseries Kronenbourg’s strategy. No reference to concepts of strategy would be complete without referring to Michael Porter who in his article ‘What is strategy’ comments that the

Essence of strategy is in the activities – choosing to perform activities differently or to perform different activities to rivals .

From the onset therefore it is clear that a company’s strategy should be what ‘distinguishes it from the rest of the crowd’, that which gives it that ‘edge’ over its competitors. A simple definition of strategy helps put the above into better context.

Johnson and Scholes (2005, pg. 9) define strategy as

The direction and scope of an organisation over the long term which
achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations.

The bottom-line of every strategy is wealth creation. Within this context the resources and competences that an organisation can tap into play a very fundamental role. Companies achieving competitive advantage do so because they have “capabilities that the others do not have or have difficulty in obtaining. ” Brasseries Kronenbourg was certainly no exception and achieving competitive advantage was a priority. How successfully it was depended (in part) on how well its resources and competences fed into its strategy and vice versa.

Despite a certain degree of autonomy with regards to operational functioning, Brasseries Kronenbourg was not a standalone business, but a small part of a much larger business. Part of the Danone Group, Brasseries Kronenbourg was the main department of the Kronenbourg SA. We are told that while organisational structure was as ‘flattened’ as possible to facilitate communication and decision-making, strategy was a centralised affair falling within the remit of the Group’s top executives. With the Group having a significant input into the businesses strategic orientation, one expects certain parallels to be evident between overall Group strategy and the strategy of Brasseries Kronenbourg. For the Group to succeed in its strategic objectives it was vital for all the businesses forming part of it to ‘pull at the same end of the rope.’

In line with the long-term vision of becoming ‘leader or number two in each area of business, first at European level, the at the world level’, we see a three-pronged strategy emerging at Group level:

To strengthen leadership in Europe
To accelerate international extension
To innovate and strengthen corporate image

An analysis of Brasseries Kronenbourg’s strategy, its approach to Productivity, Quality and HR Development as well as its Marketing, Innovation and Image helps to highlight how the large part of its decisions were motivated by Group strategy. The table below puts the discussion into context:

Strengthening leadership in Europe
Accelerating International ExtensionInnovating and Strengthening Corporate Image

Pluton Merchandising System
Pluton Merchandising System

Long-term contracts with cafés and restaurants

Merging the sales forces of Kronenbourg and Kanterbrau
Merging the sales forces of Kronenbourg and Kanterbrau

International Development

Acquisition of 60 warehouses

Restructure and investing in HR

Development of various brands to address all market segments Development of various brands to address all market segments

Producing beer with a geographical tie

Investing in non-alcoholic beers

Exporting premium products first because of higher margins

Partnerships and acquisitions to increase presence in foreign...
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