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BRL Hardy: Globalizing an Australian Wine Company

What are the organizational and management challenges surrounding BRL’s international expansion? What would you propose to overcome these?

The main challenge surrounding BRL’s international expansion was its merger with Hardy. Both companies were struggling financially and needed the skills of each other’s company to be successful internationally. Organization challenges dealt with how both companies were running their respected business. It’s hard to combine two completely different companies and find a happy medium. Especially, when you have already established how things will be run in your company and you are forced to change them. To create a successful merge of BRL and Hardy, they had to both make sacrifices to better the overall company. The strategy was to protect the company’s share of bulk cask business but concentrate on branded bottle sales for growth. To fulfil this strategy, management also had to undergo many changes. A new top executive team was chosen with the majority of top jobs coming from BRL. This management team was to implement the necessary retrenchments and position them for growth. It was tough for both sides to give way and transform into a management team; many of people from Hardy felt they were outsiders and weren’t allowed into important meetings, while many from BRL felt that they needed to earn their spot again even though they had proved themselves many times before. Both sides of management had to earn their stripes to continue in the merged company. New managers had to be willing to challenge the status quo, accept responsibility for the outcome of decisions that were delegated, and to admit when they had made a mistake. After a year of BRL Hardy many managers felt more comfortable and had earned their rightful spot. Results from the merge were very impressive and both bottle market share and profitability increased significantly in the first two years of operation. Their ultimate goal of protecting the Australian home market was still in tact. If I were in this position I would propose similar ways to overcome the challenges of merging two companies. To be as successful as possible and to create a promising company, I believe everyone starts on the same playing field and each person must earn their desired spot. If they are truly the best candidate for the position it will not matter that they have to show off their skills and ability once again. I know this is not easy, but I would also propose that everyone from both companies go into this situation with an open heart. They must have passion and loyalty to their company and know that merging is the best option for everyone. Change is a very scary thing, so I understand why many employees were scared and acting irrational. No one wants to be cut, so working hard and showing your worth is vital. However, being open to doing what is best for the company is also something that needs to stay in mind. What are BRL’s marketing challenges? How can it overcome these? BRL struggled with successful marketing strategies. It was known for its fortified, bulk and value wines and its grape resources, while Hardy stood for an award winning traditional quality company with marketing expertise and brand recognition. After the merge Hardy was reluctant to change any of its promising marketing and brand labels. They were very well known and didn’t want to take the risk of losing loyal customers. After much debate, BRL and Hardy worked together to create new marketing and brand opportunities. In 1993, Nottage Hill was relabelled and relaunched and Stamps was repositioned. However, there was still concern about the demand for local control over branding, labelling, and pricing decision. To evolve into global brand owners, BRL Hardy made changes in winemaking, opened global markets and focused on the changing consumer profiles. I think to overcome these struggles BRL Hardy should return to the roots of its strategies developed by Millar and Davies. They must focus on BRL Hardy; develop a single brand, which can command a premium price in the market. This will ensure that competitive threats are reduced.

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