I. Current News

On February 1, 2010 Brown-Forman stated it is planning to establish its own distribution company in Germany starting in the third or fourth quarter of 2010. Germany plays a role in international sales and having a fully-owned sales and marketing operation will greatly help Brown-Forman’s sales. Brown-Forman should gain a competitive advantage in Germany because they will no longer need a distributer. By being able to sell and market its own products Brown-Forman should have increased international sales in Germany. (Brown-Forman News, 2010)

On January 15, 2010 Brown-Forman announced its plan on giving up to $100,000 to American Red Cross to assist in the relief efforts. Brown-Forman also said it will match employee donations up to $20,000 for American Red Cross, which means the company and its employees will contribute as much as $140,000 to the Haitian Relief efforts. This kind of charity is good public relations for the company. It shows Brown-Forman is more than just a company that cares only about their net income and sales. Because there are many companies in the same industry who haven’t done anything for Haiti, people could be more likely to buy Brown-Forman’s line of products knowing that the company donated money. (Brown-Forman, 2010)

In 2009, The Brown-Forman Corporation achieved the highest year to year score increase among all companies rated by the Human Rights Campaign. The Human Rights Campaign is America’s largest civil rights organization that works to achieve gay, lesbian, bisexual, and transgender equality. This accomplishment shows that Brown-Forman had the highest score increase achieved by any of the nearly 600 companies evaluated in successive years for their policies and practices affecting gay, lesbian, bisexual, and transgendered employees. (Brown-Forman News, 2009) On March 1, 2010 Whiskey Magazine announced one of Brown-Forman’s products, Woodford Reserve Bourbon, was voted the “Whisky Brand Innovator of the Year.” The award was not just limited to the United States but is recognized globally. Receiving this award shows that Brown-Forman has had much innovation during the year. The company was the most original in the entire whiskey industry, and this shows because Woodford Reserve has received this award twice now. This type of news gives Brown-Forman name recognition over other companies that sell whiskey because people will recognize Brown-Forman’s brands of whiskey as being the best. (Brown-Forman News, 2010)

Brown-Forman stated on November 16, 2009 that they have increased their annual dividend for the 26th consecutive year. Brown-Forman has also increased their quarterly dividend for 64 consecutive years. These increases in dividends show that the company hasn’t been too affected by the challenging economic environment. Other companies in the same industry have been forced to reduce or suspend their dividends. The increase in Brown-Forman’s dividends shows the strength the company has in its balance sheet, cash flows, and future growth prospects. Brown-Forman’s commitment to their stockholders promotes people to invest in Brown-Forman stock. (Brown-Forman News, 2009)

I. Differentiation/Competitive Advantage

Brown-Forman’s differentiation focus is on being the best brand builder in the industry. While many companies focus on being the biggest in terms of size or sales, Brown-Forman’s focus is on its product. Brown-Forman’s strength and endurance as a company result from meeting the needs of the consumer. While continuously spending much of the company’s profit on advertising and promoting its brands, Brown-Forman saw an increase in operating income. The company’s strategic approach to business has been well proven by the increase in gross profits over the past 35 years. While Brown-Forman understands there can be a strategic advantage of being a bigger business, the company believes that the size of a business shouldn’t be a requirement but should be a result of their accomplishments.

Many companies consider their most essential assets to be productions facilities, borrowing capacity, and trademarks. Brown-Forman believes their most important asset is their employees, and this is how Brown-Forman differentiates itself from its competitors. Brown-Forman knows that hiring the right people is essential for a business; therefore, Brown-Forman hires the top people across the enterprise and around the world. Brown-Forman uses the ideas and innovation from a broadly diverse, worldwide employee team to give access to a range of viewpoints. When hiring potential employees, Brown-Forman understands that having a varied and inclusive workforce is vital to the business’s performance and success.
While many companies in the industry have been cutting their costs and expenses, Brown-Forman has been trying something different. With the company’s research and development team being backed by a strong production team, Brown-Forman is continuously finding ways to improve the excellence of its products. With new developments, Brown-Forman is able to create more products while using less material, which causes a decrease in costs. All of this is done without sacrificing quality and minimizing the company’s impact on the environment. The company has moved some of its funds that were in advertising investments to brand investments, to increase brand recognition. Brown-Forman has been starting to sell value-added packs, which contain branded items such as flasks or barware. Although this new sales method has increased Brown-Forman’s cost of goods sold, the company improved its brand investments and brand recognition.
Brown-Forman has been finding ways to develop new beverages using their most popular brands. The company’s most well-known product, Jack Daniels, has been expanded into many other types of drinks. From Jack Daniels has spawned Gentleman’s Jack, Jack Daniel’s Single Barrel, Jack Daniel’s Country Cocktails, and Jack Daniel’s & Cola. All of these new drinks use the Jack Daniels name, which helps with the sale and marketing of these new products. Brown-Forman has also expanded its popular brand of vodka, Finlandia, to have different flavors such as Mango, Lime, Redberry, Cranberry, Grapefruit, Wild Berry, and Tangerine. By adding these new flavors to the market, Brown-Forman differentiates itself from many competitors who just sell traditional unflavored vodka. Even though Brown-Forman started a new line of products, consumers will recognize the Finlandia name, and with brand recognition they will be more likely to purchase these new flavors of vodka.