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Unformatted text preview: March, 2008 BRL Hardy: Globalizing an Australian Wine Company BRL Hardy: Globalizing an Australian Wine Company (Rough draft: International Finance, based on HBR Cases -- worked on by Jeff, Mike, Mohsin, Matt & Riluvan) The BRL Hardy case illustrates how strong brands are vital to corporate globalization, particularly in the new world of wine production. The case shows how key forces such as market positioning, segmentation, and product differentiation, play major rolls in determining the future of organizations in today’s contemporary global market. The most significant issue discussed in the BRL Hardy case is how the company adopted and controlled its multi level value chain and strategized to specialize in its core-competencies. By doing so, BRL Hardy utilized its organizational capabilities to achieve its vision of becoming a global wine company with a good brand mix and a strong marketing strategy that optimizes its value chain. Company History Thomas Hardy and Sons dates back to the mid 1800’s when Thomas Hardy acquired land in South Australia and began planting grape vines. By the early 1900’s Hardy was one of Australia’s largest and most respected wine producers. The company invested in the best vineyards in order to have the best local fruit sources in Australia and focused on various region’s strengths to produce wines that reflected a range of grape varieties. BRL, dates back to 1916 when 130 Italian grape farmers formed Australia’s first cooperative winery named Renmano Wine Cooperative. In 1982, Renmano merged with Berri Cooperative, the largest winery and distillery in the river land, to form Berri Renmano Limited (BRL). By the early 1990’s, there were about 500 grape farmers delivering grapes to BRL which contributed to the mass production of wine as opposed to the higher quality wines that came out of Hardy and Sons. The Merger In the late 1980’s, with visions of expanding their international roots, Hardy and Sons acquired Whiclar and Gordon, a reputable wine importer/distributor based in the United Kingdom (UK), and two highly respected wineries, the Domaine de la Baume in France and Brolio de Ricasoli in Italy. Although the acquisitions were intended to make Hardy a major player in the world of wine, these three acquisitions drained the parent company of all of its cash. Combined with a market slowdown back in the homeland, Hardy was soon forced to look for alternative financing. BRL who was also on the financial decline was looking for ways to expand and was seeking to leverage resources from another company. This led the management at BRL to propose a plan for a merger with Hardy and Sons. The core-competencies of both BRL and Hardy were perfect complements; BRL had the raw materials (fruit), cash and the leadership, while Hardy and Sons had the marketing expertise, brand recognition, and the wine making know how. The companies completed the merger in June of 1992 to become BRL Hardy and three months later went public. BRL Hardy’s market share consisted of 22% of the Australian three months later went public....
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This note was uploaded on 04/30/2009 for the course HYY 77879 taught by Professor Hi89 during the Spring '09 term at Adams State University.
- Spring '09