SWOT Analysis:
Carlsberg's SWOT Analysis is used as an evaluating framework to weigh the company’s analyzed strengths, weaknesses, threats, and opportunities up against one another. It is therefore a coherent conclusion on the internal as well as external analysis. Carlsberg will be able to use its strengths to create a competitive position in the market or reduce its
weaknesses to improve the competitive advantage. Carlsberg will also be able to address the opportunities and proactively react to them to grasp for more market shares. Contrary, the company must look out for its threats in order to retain its market position in all its markets.
Strengths: Weaknesses:
- Extremely high brand value for several products
- Highly equipped R&D department - State-of-the-art production and
innovation facilities - Owns entire value chain - Sustainable and innovative
packaging
- Chosen to lower Carbon footprint - Focused on LEAN strategies to
reduce costs
- Increasing size through M&A - Economies of scale
- Factories in several countries improving production and delivery time
- Remaining local by purchasing local brands
- Revenue decline, primarily due to COVID
- Production of beer has a severe negative impact on the environment - Production of beer has a negative
impact of societal health
- More laws and regulations impacting Carlsberg’s marketing activities negatively
- Next generation consumers prefers local and organic rather than big conglomerates
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51 - Introduction of several new products
on a quarterly basis (0,0 %, 1864 etc)
- A strong talent mass and job recruitment standard
- Wide and deep product portfolio - Dominant market position - Dominant brand identity
Opportunities Threats
- Rapid growing new markets, among China and other emerging markets - Improvement of social media
making it easier for Carlsberg to communicate with the world - As market leader, Carlsberg can
constantly purchase new local brands and remain “local”
- More focus on sustainability rather than price
- Consumption will become a larger part of consumer identity
- Decline in regular beer sales - COVID19 impacting retail, bar,
restaurant and supermarkets sales - Brexit impacts the customs fee on
beer sales in UK
- Tariffs due to increased aggressivity among nations
- Consumers more focused on sustainability, that Carlsberg needs to adapt to quickly
8.1 Strengths
Among many strengths are some of Carlsberg’s main its product innovation development and its resources. Carlsberg is able to create competitive advantages quickly, as it can develop products responding to consumer needs at its state-of-the-art facilities and due to the fact that the company owns its entire value chain. Carlsberg has prior experiences they can
continuously rely on as well as a knowledge and data on almost all markets. They have a strong team of employees, and a high bran equity in terms of recruitment, as the company is
52 seen as a very respectful place to become a graduate after studying long educations. The company is also powerful in terms of financial resources (Carlsberg, 2021).
Carlsberg is considered to have a relatively strong brand equity and a phenomenal brand awareness (Aaker D. A., Measuring Brand Equity across Products and Markets, 1996).
Carlsberg has some of the most famous beer brands in the local markets where the company operates. The brand awareness needed to remain relevant to the consumers and being selected by the fierce competition by the shelfs is one of the reasons why Carlsberg has become the market leader in Denmark (Carlsberg, 2021).
Carlsberg has amassed a plethora of patents and copyrights through innovation and the purchase of several brands throughout time. That can become beneficial for Carlsberg when battling competitors in local markets in the future (Porter, 1985).
Carlsberg has several strategic advantages over its competition, and one of the main things are the various strong product brands and the company’s economies of scale (Aaker &
Mcloughlin, 2015). As the industry is slightly incumbent, Carlsberg has been able to build strong relations with its stakeholders, including suppliers.
Carlsberg has a solid balance sheet, despite a revenue decline in 2020 (Carlsberg , 2020 ).
Carlsberg should assist it in investing in new and varied projects that will diversify the revenue stream to improve their return on investment.
Carlsberg has been able to succeed in achieving first mover advantages in several markets.
8.2 Weaknesses
Carlsberg’s weaknesses consist of several major threats to their future existence. Amongst them are the most crucial the company’s lack of focus on remaining relevant to the future consumers (PWC, 2015). The company has lacked, in the eyes of the political consumers, to become more sustainable, green emission gas focused, ecological and healthy. Hence, for Carlsberg to truly remain relevant to the future consumers, that is one of the things the company needs to adjust to in the future (Next Generation Customer Experience, 2018).
Carlsberg needs to ensure a limitation of roadblocks aided by any internal conflicts between departments. Unfortunately, in large corporations like Carlsberg, there is a risk of managers in each department are too narrow minded and only focusing on improving their own
53 division. If roadblocks are to be avoided, expansion plans in the future can be implemented successfully.
Carlsberg must continuously recruit talent, particularly in the fields of innovation and technology. The projects are too narrowed around results on a internal basis instead of focusing on shareholders profits (Schwabel, 2015).
Carlsberg’s strategy in acquiring new brands is rather replicable for the other brands to do the same, as they also have a large capital to invest with. Nonetheless, the company has several patents and copyrights, but it is still possible for other companies like Heineken for example to acquire the next big European brand, increasing the competition against Carlsberg. Hence, it will be become almost impossible to prevent new companies from arising, and hereby opening up the chance of other companies acquiring brands that resonates with the consumers.
8.3 Opportunities:
Carlsberg sees opportunities in macro environmental variables and changes. Carlsberg can employ them to either consolidate their market cap or to increase their market size. Chances can arise as an outcome of a range of circumstances, for example, technical innovations, increases in household income levels and changes in customer preferences.
There are still place to grow in the industry, but as the political and economic situation in other major markets are unstable, there is a high risk involved with focusing too much on expansion to Russia and China. Also, as the competition is intensifying, there is a risk that it will reduce Carlsberg’s future growth, wherefore the company must continue to implement lean production methods and introduce new products (Carlsberg, 2021).
Carlsberg can and should implement AI technology to utilize customer data and detect trends before consumers, all resulting in understanding customers better.
One of the issues Carlsberg is against is that competitors have the same access to talent as Carlsberg does. Hence, it becomes vital for the company to stay aggressive in its talent recruitment processes. Also, the company must be able to tap into foreign talent recruitment to fully utilize the knowledge potential of the global world (Søndersted-Olsen, 2007).
54 Carlsberg certainly has opportunities to expand in adjacent markets into similar industries, by utilizing the knowledge already obtained to introduce products within other industries.
The option of following a more e-commerce-based approach could also function for the company, when forming profitable partnerships with stakeholders around local markets.
Carlsberg must be able to benefit and utilize social media more, as this is here all future consumers are spending their free time. Hence, Carlsberg can be able to lower its cost by entering new domestic markets, hereby reaching all types of consumers in various
geographical regions. Based upon the data derived from such a campaign, Carlsberg may be able to crowdsource different services online that may improve the user journey process, hereby improving the brand loyalty and ultimately the sales volume (Nielsen, 2015).
The industry has moved immensely fast since the 1990’s (Carlsberg , 2020 ). The preferences of consumers and their standards to beverage consumption have changed rapidly, hereby allowing new companies to enter. By doing so, Carlsberg has had to confront the question of hos to keep the customers they currently have, and how they are able to attract new ones. One of the ways the company has tried to do so, has been through diversifying its product
portfolio to accommodate all kinds of flavors and tastes, followed up by adding features based on consumer feedback (Solomon, 2006).
8.4 Carlsberg's Threats
Threats are outer environmental conditions in which has the potential to impact Carlsberg's business model. Threats can occur as a result of a variety of circumstances, including changes in customer tastes, economic growth, technology advancements, political developments and policy changes, and an increase in consumer disposable income (Carlsberg, 2021).
Carlsberg should mitigate the danger of rising protectionism by doing everything from keeping data on international markets to diversifying risk by operating in countries with diverse economic cycles (Mollerup, 2008).
Just as Carlsberg utilizes low cost of contacting customers through social media and e-commerce, so can competitors, both regional and global ones. Carlsberg must deal with this as authorities try to collect green tariffs in order to stimulate greener solutions. Carlsberg may face greater shipping and packaging expenses as a result.
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8.5 Sub conclusion to SWOT model
Carlsberg is one of the largest beer production companies globally, and they are utilizing that and must continue to do in the future. The company is greatly benefitting from economies of scale. As a part of that, they have full control over their value chain, where they can deliver extraordinary quantities of beer in a very short time, setting them apart from competition in regard to logistics and production time. The company has established themselves as a innovative company, hence becoming a prestigious place to work. This has impacted in a talented workforce, including having experts within marketing, R&D, technology,
procurement, technology and in any other area too. They are considered to be among the most innovative beer companies in the world. These attributes have contributed to bringing new products to the market, wrapped in sustainable packaging solutions fitting new consumer trends. Unfortunately, new consumer trends also include a higher preference for smaller, local, and sustainable brands rather than big, corporate conglomerates with a large carbon emission footprint. Hence, to remain market leader in several regions, Carlsberg must intensify their CSR initiatives to stay a relevant brand, that the next level consumers can resonate and identify with.
Furthermore, there is a variety of exciting possibilities laying ahead of Carlsberg. As the digital era and E-commerce is becoming larger and larger, Carlsberg may want to utilize the ability to communicate fast and wide with the whole world at once to establish themselves in the minds of their consumers, when they are to place orders at the local supermarket. As the next level of consumers will be the major workforce, it is crucial that the company
communicates sharply and extensively to stay ahead of competition, but also to be placed in the favor of competition.
Carlsberg owns almost all its value chain, which gives them a competitive advantage in several aspects. Carlsberg must implement CSR initiatives in their production facilities and market their improvements extensively. The concern about the impact of beer production has a negative impact on beer sales and revenues, and it is therefore vital for the existence of the company with a very long-term view, that they change their production processes to become carbon emission neutralized or at least close to.
56 To conclude upon the SWOT model, many opportunities can be used by Carlsberg to regain their revenue growth. Nonetheless, threats are terrifying, especially in regard to the climate change concerns, that can remove Carlsberg’s’ foundation of existence, if future customers will not purchase beers, as they have such a severe impact on the environment. The findings in the SWOT gave answers to the revenue decline asked in the research question, and by knowing the answer, the researcher will be able to come up with proposals of actions to change the negative development. Above analyzed theories along with the data gathered from primary and secondary processes will all be utilized to help finding proposals regarding product development to change the negative outcome of the company.
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