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Executive Summary

Describe about the Company Structure, Capabilities and Resources,Competitive Analysis and Industry Situation and PESTEL Analysis of Bundaberg Rum, an Australian rum company?

Bundaberg Rum, an Australian rum company wants to expand their business in India which is a totally new market for them. In this country they already have well- known competitors who are ruling not only in India but also all over the world. For launching their products they have to do the SWOT analysis which will help them to analyze their strength, weakness, opportunities, and threats and by that they can plan out their strategies and take calculated risks. As they are expanding their business in India they have to analyze the PESTAL factors also. India is a modern yet traditional country and the laws of this country are totally different. The company has to plan out their strategies seeing their competitor that how they are behaving in the market and making profits and after that they can proceed with their marketing and branding plan.

Bundaberg Rum is a type of dark rum which is produced in Bundaberg, Australia. Often it is referred as “Bundy”. The company has its own facility of producing cola and supplies cola for their ready-to-drink- Bundaberg Rum and their cola products. This Rum was originated due to the problems in the local sugar mills because there was a question that what they should do with the waste molasses after extracting the sugar from it because it was difficult to transport and the cost price was increasing and it was not worthy for them. At first the sugar men thought of earning profits from distilling (Zhao, Huo,  Sun, & Zhao, 2013). A meeting was held with the chairman and the sugar mill owners and after that the operation started of the Bundaberg Distilling Company in the year 1888. In 1889, Bundaberg Rum was first produced. In the starting of 20th century the production was stopped but later in the mid 20th century the production was again started (Doole, & Lowe, 2012).

Company Structure

In more than 100 countries Bundaberg Rum operates and in Australia it is among the top brands. In Australian market share is almost similar like the European market, US market and Asia Pacific market. The sustainable growth and the investment of this market is very important to stay in the market. Their main motive is to contribute in the Australian market and also in the international market by showing their capabilities and records of this area in the market. More than 500 people work in this company which is located in around 8 cities of Australia. They have 2-3 producing units.

As a company of rum, their main focus is to expand their business in the Asian market where they can target new customers by keeping the price of the products according to the market scenario. By innovating different tastes of rum so that people can experience totally standard drinks on different types of occasions.

The company always keeps a record of their resources, customers and distributers. They have segregated their business into different sectors so that they can easily track the records and if any problems occur they can easily solve those. The company’s main asset is their people who deliver the company with their performance and their new innovations to the customers.

Company Structure, Capabilities, and Resources

Competitive Analysis

As the Company will be expanding their business in India and it is totally a new market for them. In India already there are various alcohol brands that are successfully doing their business. So, opening a totally new brand of Rum in the country where other brands are successfully running is really a tough job (Gligor, & Holcomb, 2012). In India, the existing brands of Rum are Malibu, Bacardi, Havana Club, Captain Morgan and all this brands are very popular in all over the world. Bundaberg Rum has to compete with these brands to settle their market in India (Bharadwaj, El Sawy,  Pavlou, & Venkatraman, 2013).

 In India the industry situation of Rum in India is in a quiet high position. In the northern side of India is very chilled during the winter season. So, people consume rum to keep their body warm (Tang, & Musa, 2011). According to many people if you are suffering from high fever or cough and cold then if you drink rum with hot water on the next day you will be totally fit and fine. As Bundaberg Rum is mainly the waste form of sugar molasses then the company can launch themselves by stating themselves different from the other brands and by that they can attract new customers for their brand (Iirajpour, Hajimirza, Alavi, & Kazemi, 2012). As they are expanding their business in India they have to keep few important facts in their mind. India is a modern up to date yet a traditional country. In the year 2014 the international alcohol industry is expected to earn around $ 1 trillion and be in the top positions. The industry is segregated into three segments which covers the market almost. The products have to the key product of the market like other alcohol brands. Now there is new demand in the market that the alcohol need to be of low calorie and organic and as the Bundaberg is totally new in Indian market so they can improvise in their products before launching their products. In recent few years the alcohol brand is earning more profits because of internet retail and China is becoming the new rival country for other countries for alcohol markets. Mainly Bacardi, Malibu are the market leaders but companies like Bundaberg Rum are also coming up and giving tough competitions to these existing brands. For these reasons the outlook of the market is changing gradually.

Top Brands

Q4 2013

Q1 2014

Growth

Heinekan

5013331

6150456

22.68%

Jack Daniel

2422093

2871448

18.55%

Barcadi

2074254

2576422

24.21%

Bud Light

2112240

2560003

21.20%

Dos Equis

1887500

2016089

6.81%

Bundaberg

2064200

2500450

23.18%

Malibu

1500887

2488871

4.50%


Figure- 1 – Growth and Market Share of the leading Rum Brands

The market growth of the leading rum brands in the last two years and of the Bundaberg Rum company as they are planning to launch their product in the Indian market.

PESTEL Analysis

Before launching their products the company has to see the PESTEL factors of the country (Terpstra, Foley, & Sarathy, 2012).

Political-There should be clear regulations about the communication of alcohol brands. Taxation should be put on the brand up to a limit.

Economic-As India is a developing country so their economic condition is also developing. The expenditure of India is 20-30% more than China. Buying of spirits of premium level is increasing among the higher class and also in the middle class people (Ozawa, 2014).

Competitive Analysis and Industry Situation

Socio-Cultural-The middle class people of India have already becoming brand aware and so they are consuming spirits of well-known brands only. The number of pubs and night-clubs are increasing day by day. Indian consumers of higher class mainly prefer gifting well-known brands to people (Chailan, & Ille, 2015).

Technology-Technology of today’s generation is really fast and any new news about any new item reaches to the customers very easily.Now the new trend is about digital marketing so the company can advertise their products on social cites and people can know about the newly launched products  (Cotula, 2012).

Legal-The legal factors of India are very tough. Before launching their products the company has to follow all the legal rules and regulations of the country (Graham, 2013).

Environment-The environment of India is different in each place. People of north India will consume more than the people of south India. As India is a multi religion country so as a brand the company should keep these things noted that at what time they should sell their products more and they will gain profits (Hill, Jones, & Schilling,2014).

Figure 2- PESTEL Factors

The normal distribution of the alcohol industry mainly has three steps including the delivery through their value added service by the distributers. The supply chain mainly consists of merchandising, distributing, selling the products and delivering them to the end customers. In India, the company of Bundaberg Rum has to first launch their product and for that they have to keep free samples of their products in different outlets and from there people will get to know about this product (Puffer, McCarthy, Jaeger, & Dunlap, 2013). After tasting if they like it then they will order for more than from there the company will get to know that people about liking their products and then the company will approach their distributers of this country so that they can easily deliver their  products to their customers through distributors and retailers (Chattopadhyay, Batra, & Ozsomer, 2012).

Bundaberg Rum is a well-known brand in the rum industry. They are planning to launch their products among the vast line of brands.

The company is doing different commercials so that they can easily reach their customers through social media. They have tie-up with different clubs and parties (Hitt, Ireland, & Hoskisson, R.2012).  Further, research has also found that the organization evidenced strong customer base, which ultimately enhance the brand images in the new market place.

They have a presence of strong brand via advertising. Bundaberg Rum will be a strong brand for the other well-known brands and local products but their market growth will get restricted and the Indian government has many rules and policies on people’s drinking habit and this will be affecting their performance in the market and their sales growth (Gabrielsson, Gabrielsson, & Seppälä, 2012).

For Bundaberg Rum there are many opportunities like penetrating in the international market, new different ways of distilling and also various new ways of branding and marketing their products (Thompson, Peteraf, Gamble, Strickland III,  & Jain,2013). The addition of new flavor is one of the major opportunities to enhance the market share. In addition to this, the increasing trend of parties and events also enhance the demand for the products.

PESTEL Analysis

As threats, Bundaberg Rum has to face many problems like many well-known brands as their competitors, who are already ruling the market and for a new company like Bundaberg planning to open up in a totally new country. The drinks should be off calorie which has now become a competition among all the alcohol brands and there cost is increasing for giving good services to the customers (Piercy, 2014). 

According to the above SWOT analysis, following strategies needs to be taken by the organization:

  • S-O: Since, the brand image of a company is strong which increase the demand of that product and growth of the company should be the prior concern;

  • Since, the company reputation is very high, it needs to bring variation on their product while during R&D of that product;

  • S-T: Since, the brand image of the company is high; it will help them to sell their product more and more, but it will definitely increase their competition level;

  • Well reputed companies are simply define that there product are manufacture while taking care of their customers safety;

  • W-O India is one of the major developing nations and the growth rate is increasing. Due to this, price of product are to be fixed according to the economic growth rate since they are on the process of developing the price would be low to fluctuated;

  • Company R&D team coming with new ideas and technology, they bring new variation on their product, but the companies are too busy in their R&D research that they forgotten to mention the price of their product in their online websites;

  • W-T Exchange rate of company is keep on fluctuating, due to this reason, in India market the growth of their product are declining over a year and this will effect in the overall business;

Conclusion

In a nutshell it can be said that before expanding a business in totally new country the company should see all the benefits and drawbacks they will face in the totally new market (Maloni, Carter, & Kaufmann, 2012). They have to strategies their planning so that they can compete with their competitors without facing much loss and also they can stay in the market. The SWOT analysis and the PESTEL factors help the company to see their growth in the India market which will help them in analyzing (Ellram, Tate, & Petersen, 2013).

References

Doole, I., & Lowe, R. (2012) International marketing strategy Cengage Learning

Chattopadhyay, A., Batra, R., & Ozsomer, A. (2012) The New Emerging Market Multinationals: Four Strategies for Disrupting Markets and Building Brands. McGraw Hill Professional

Piercy, N. (2014). Export Strategy: Markets and Competition (RLE Marketing). Routledge.

Thompson, A., Peteraf, M., Gamble, J., Strickland III, A. J., & Jain, A. K. (2013) Crafting & Executing Strategy 19/e: The Quest for Competitive Advantage: Concepts and Cases. McGraw-Hill Education

Gabrielsson, P., Gabrielsson, M., & Seppälä, T (2012) Marketing strategies for foreign expansion of companies originating in small and open economies: the consequences of strategic fit and performance Journal of International Marketing, 20(2), 25-48

Hitt, M., Ireland, R. D, & Hoskisson, R (2012) Strategic management cases: competitiveness and globalization Cengage Learning

Puffer, S. M., McCarthy, D. J., Jaeger, A. M., & Dunlap, D. (2013) The use of favors by emerging market managers: Facilitator or inhibitor of international expansion?. Asia Pacific Journal of Management, 30(2), 327-349.

Hill, C., Jones, G., & Schilling, M (2014) Strategic Management: Theory: An Integrated Approach. Cengage Learning.

Chailan, C., & Ille, F (2015) Branding from emerging countries: how to compete internationally Critical perspectives on international business, 11(1)

Ozawa, T (2014) Multinationalism, Japanese style: The political economy of outward dependency. Princeton University Press

Cotula, L. (2012) The international political economy of the global land rush: A critical appraisal of trends, scale, geography and drivers. Journal of Peasant Studies, 39(3-4), 649-680.

Graham, A. (2013). Managing Airports 4th Edition: An International Perspective Routledge

Terpstra, V., Foley, J., & Sarathy, R. (2012) International marketing Naper Press

Iirajpour, A., Hajimirza, M., Alavi, M. G., & Kazemi, S. (2012). Identification and evaluation of the most effective factors in green supplier selection using DEMATEL method Journal of Basic and Applied Scientific Research, 2(5), 4485-4493

Tang, O., & Musa, S. N (2011) Identifying risk issues and research advancements in supply chain risk management. International Journal of Production Economics, 133(1), 25-34.

Bharadwaj, A., El Sawy, O. A., Pavlou, P. A., & Venkatraman, N (2013) Digital business strategy: toward a next generation of insights. MIS Quarterly,37(2), 471-482.

Maloni, M., Carter, C. R., & Kaufmann, L (2012) Author affiliation in supply chain management and logistics journals: 2008-2010. International Journal of Physical Distribution & Logistics Management, 42(1), 83-101.

Ellram, L. M., Tate, W. L., & Petersen, K. J (2013) Offshoring and reshoring: an update on the manufacturing location decision. Journal of Supply Chain Management, 49(2), 14-22.

Zhao, L., Huo, B., Sun, L., & Zhao, X (2013) The impact of supply chain risk on supply chain integration and company performance: a global investigation.Supply Chain Management: An International Journal, 18(2), 115-131.

Gligor, D. M., & Holcomb, M. C (2012) Understanding the role of logistics capabilities in achieving supply chain agility: a systematic literature review Supply Chain Management: An International Journal, 17(4), 438-453

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