Groslch Case
Grolsch engaged in globalization with a view to becoming “one of the worlds top 10 global beer brands”. In 2007, it was the 21st brand in international volume, which can be interpreted as a failure.
Grolsch started to grow outside of the Dutch market later than its main competitor Heineken, in the middle of the 20th century. It sought foreign opportunities when and because its domestic market became saturated. Proof of that lies in the fact that in the 1950s, as domestic demand was growing again, Grolsch shifted its focus back to the Dutch market. Then, in the 1970s, as domestic demand and market size went down, Grolsch focused back on foreign markets.
In 2007, Groslch sells 51.5% of its volume in international markets; it exported its products to 70 countries. Roughly speaking, two product lines were exported: the Grolsch Premium Lager, and the Amsterdam Range. The Grolsch Premium Lager is the companys key product. It accounts for two thirds of all Grolschs exports, and is, in many foreign markets, the only Grolsch product sold.
The performance of Grolsch in its international markets is varied. In the UK, where the firm set up its own import organization, Grolsch became the third largest premium lager brand. But then Grolsch started acquiring brewers in Germany and in the UK, which turned out to be a failure, as prove the rapid divestments that followed. Ruddles, the small UK brewer acquired in 1992, got out the Grolschs portfolio only 5 years later. Similarly, Grolschs investment in a Polish brewery only lasted 3 years.
Besides, the firms market share in most of its foreign markets leaves a lot to be desired. In the US for instance, Grolschs third larget market, the brand was ranked 11th in the imported premium beer market, and volume had stagnated at 140,000 hl. In Canada, Grolschs fifth largest market, the brand was ranked 5th in imported premium beers. In France though, the Amsterdam beer was a success; it was ranked 2nd in the strong beers segment.
The firms distribution strategy was quite often a failure. Proof of that lies in the high distributor turnover the firm experienced in the US, Canada, Australia and New Zealand. Not only was the firms profitability in international markets poor, but of the seventy foreign markets, four countries alone accounted for two thirds for foreign sales.
What are the key elements and limitations of its emphasis on adaptation, in particular?
Grolschs globalization key strategy was adaptation. Indeed, Grolsch strongly believed that its mission was to “keep pace with the changes in consumers preferences for drinks”. Therefore it adapted its
organizational structure
market investments
focus on growth targets