...Case Study 4: Corporate Valuation Case 51: Brown-Forman Distillers Corporation 1. Why is Brown Forman considering buying Southern Comfort? In your answer consider the strategic motives of Brown and the arguments in favour of and against the acquisition. Producing and selling high-quality products is the company’s marketing philosophy. Although Brown-Forman was the fifth-largest distiller in the United States, it spent a lot of money in advertising support in order to build best brands in the world. In a while, the whiskey market was in a depression. Brown- Forman faced a big challenge to overcome this period. In order to expand its product lines, Brown-Forman chose several of products which has fast growth in the alcohol beverage market. So the company can expand its product lines. In addition, during the 1978 to 1980 period, the company invested $86 million in advertising and promotion, $39 million in barreled-whiskey inventory and $19 million in fresh plant and equipment. The company was aware of that the foreign market also was important for the later growth of company. Advantages: The Southern Comfort can provide a variety of products to customers. After this acquisition, the earning per share and share value of stakeholders value will increase. The profit/sales ratio is high. So the company can make more profits. The average assets/sales ratio also is high. Therefore, the company can make more earnings and produce high-quality...
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...Management 600 Dr. Luce Blake Herner Brown –Forman Corporation Founded by George Garvin Brown and John Forman in 1870 Brown- Forman is now one of the largest competitors in the alcoholic beverage market within the United States. The company is headquartered in Louisville, Kentucky and is still family owned to this day. While the company sells a wide variety of products they are specifically known for their wine, spirits and whiskeys. Under an umbrella of roughly 25 distinctive brands “Brown-Forman Corporation is a diversified producer, marketer, and exporter of alcoholic beverage and consumer products”. Their top sellers are “Jack Daniel's whiskey, Southern Comfort liqueur, Canadian Mist Canadian whiskey, Early Times and Old Forester bourbon, Glenmorangie Scotch, Finlandia vodka, Korbel champagne and brandy, and Fetzer, Bolla, and Sonoma-Cutrer wines” (1) www.fundinguniverse.com/company-histories, Organizational Change and strategic Bourbon was the original product Brown-Forman produced and sold giving theirs the title of ‘ Old Forester’, which is still in production today. Bourbon was traditionally sold by the barrel directly from the distiller to the retailer. At which point the bar or pub would transfer the bourbon into there own bottles. Recognizing this opportunity and understanding the power of marketing using a differentiated approach, Brown-Forman began bottling ‘Old Forester’ making sure each was corked and sealed. This was the first marketing...
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...Brown-Forman Wandan Su Oct.28th 2012 Managerial Accounting * Company Overview * Company History In the year of 1870, a great company was founded in Louisville, Kentucky. It was formed by George Garvin Brown, a young pharmaceuticals salesman. He saw the demand for a consistently high quality whisky that conform medicinal standards. Brown and his half-brother used an innovative approach to sold whisky with sealed glass bottles to guarantee their quality while whisky was sold in the barrel in common at that time. The brand called Old Forester Kentucky Straight Bourbon Whisky, was the first bottle bourbon in America, which remains one of Brown-Forman's best selling brands during the current days. The name of the company changed so many times as the business grew and the original partnership dissolved. Later partnership become between George Garvin Brown and his friend also his accountant, so the company was formed was call Brown-Forman. Old Forester sold very well --but In 1902 Forman sold his interest in the Brown-Forman Distillery because he believed that Brown-Forman's success would diminish as soon as the novelty of packaging began to fade. The Brown family bought all of Forman's interest in the company. In1917，George Garvin Brown died and his oldest son，Owsley, took over the Brown-Forman. It was a difficult time because of the depression and prohibitions during the two World Wars. In 1924, the company moved to the 18th & Howard Street, where the company...
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...• Why do some organizations achieve great success in rolling out a mentoring program, while others achieve only a modicum of success? We believe that the companies that are most successful view corporate mentoring as an organic process, meaning that they understand that mentoring programs evolve and grow. Our experience demonstrates that the difference between mentoring success and failure lies in the ability to build capacity and integrate learning continuously. In order to create a successful mentoring program, you should answer 20 questions. We've included dos and don'ts for each, based on research and our experience in developing a mentoring program at Brown-Forman Corporation. 1. What are our business reasons for developing a mentoring program? You should develop a mentoring program if and when you have solid business reasons, such as to speed up the development of future leaders or to share organizational knowledge. Do your homework. Look at employee retention rates, the percentage of senior managers who will reach retirement in the next five to 10 years, current bench strength, and developmental objectives. Don’t develop a mentoring program because it’s popular or because you've read that it works for other companies. 2. What organizational support exists and what needs to be developed? Successful mentoring initiatives require visible support and involvement from the highest levels of the organization. Do...
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...brand is produced by the Brown-Forman Corporation. Brown-Forman produces and markets many of the most well-known and best-loved wines and spirits in the world. Some of their popular spirits include Jack Daniel’s, Canadian Mist, Southern Comfort, Gentleman Jack, and Early Times. A few of their wine labels include Fetzer, Bolla, Bel Arbor, and Michel Picard. The Brown-Forman Corporation is one of the largest American-owned companies in the wine and spirits business. They are considered a top diversified producer and marketer of fine quality consumer products within their industry. Headquartered in Louisville, Kentucky, Brown-Forman was founded in 1870 by George Brown and John Forman as small town distillery producing Old-Forester brand bourbon. They compete in the distillery industry that includes about eighty companies with combined annual revenues of $ 6 billion. Today, the company employs approximately 3800 people in the U.S. and abroad. For fiscal year 2008, the Brown-Forman company had sales revenue of approximately $ 3.3 billion with a net income of $ 440 million. In 1956, Brown-Forman purchased the Lynchburg, Tennessee-based Jack Daniel’s. They maintained the simple black Jack Daniel’s label. The Brown-Forman Corporation has found global success by introducing Jack Daniels to overseas markets. The Jack Daniel’s product is the company’s leading brand and is the largest selling American whiskey by volume in the world. Brown-Forman has been able to grow the...
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...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...
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...ME PROJECT REPORT | | ON INDIAN LIQUOR INDUSTRY Table of Contents 1. INTRODUCTION…………………………………………………………………….4 2. INDUSTRY OVERVIEW…………………………………………………………..5 3. EVOLUTION OF MARKET STRUCTURE…………………………………..8 4. MARKET PLAYERS AND STRATEGIES…………………………………….10 5. NATURE OF COMPETITION……………………………………………………16 6. ENTRY BARRIERS FOR POTENTIAL ENTRANTS…………………….19 7. CONCLUSION………………………………………………………………………… 21 LIQUOR INDUSTRY IN INDIA INTRODUCTION The Indian alcoholic beverages market is gradually opening up as quantitative restrictions are being lifted, import duties are being lowered and domestic regulations are being simplified. These developments are attracting the attention of foreign players, who are faced with a slowdown in developed markets. According to some recent reports, by 2005, the total supply of liquor in the world will be close to 282 hl but consumption will be only about 198 hl. In such a scenario, India would be an attractive market for international players. An estimated 10 million people consume alcohol in India, out of a population of about 1.2 billion. The liquor industry in India is highly government regulated in terms of constraints on manufacturing, storage as well as distribution. The industry faces threat of prohibition in several states, high taxes, restrictions on advertising, restrictions on inter-state movement, etc. However, the deep-rooted social conditioning against alcohol consumption is gradually starting to...
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...3 trillion (US$12.19 billion) also places it among the world's top drinks companies. Whiskey remains the company's strongest product area--Suntory is credited with introducing Scotch-style whiskey to Japan--and production of the group's 18 different bottled blends and single malts are concentrated at its Yamazaki Valley and Hakushu distilleries. The company also produces a number of other alcohol varieties, such as the melon-flavored liqueur Midori, and the distilled alcohol, Shochu. Suntory also acts as distributor for a long list of international brands in Japan, including Beefeater, Courvoisier, Jack Daniels, Campari, and Drambuie among nearly 150 brands. In addition to its Japanese operations, Suntory manages Scotland's Morrison Bowmore Distillers, France's Chateau Lagrange and Chateau Beychevelle, and Germany's Weingut Robert Weil. In the United States, Suntory operates Pepsi Bottling Ventures LLC, and is that country's third largest mineral water distributor through subsidiary Suntory Water and brands including Hinckley & Schmidt. Other...
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...Corporation CG Performance Analysis Report ----Based on the past fiscal year’s US SEC filings Company Name: Constellation Brands, Inc. (STZ) Xu (Answer) HAN The Johns Hopkins University Carey Business School 1. Executive Summary 1.1 Purpose The purpose of this report is to evaluate the corporate governance performance of the Constellation Brands, Inc., based on its last fiscal year’s US SEC filings, and then to use the relevant findings and information to discuss the implications for the company, investors, regulators, and the economy. 1.2 Scope While evaluating the corporate governance performance of the company, it is useful and important to pay attention to the four core values of corporate governance, including transparency, accountability, responsibility, and fair and equitable stakeholders, as well as to consider some indicators of the company, such as its Board Structure, Compensation system, Shareholder Rights, and Audit issues. On the other side, the financial information that the company disclosed on its financial statements is also considerable to deal with its corporate governance performance analysis. 1.3 Method I divided the whole report into three main parts—Self-Diagnostic Issues, Competitor-Diagnostic Issues, and SWOT Analysis—to analyze the corporate governance performance of the company comprehensively. In the first section, I did a 100-question corporate governance survey using “Corporate Governance Self-Diagnostic...
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...ICRA EQUITY RESEARCH SERVICE UNITED SPIRITS LIMITED September 20, 2011 Industry: Alcoholic Beverages ICRA Online Grading Matrix Valuation Assessment A Fundamental Assessment Fundamental and Valuation Grades ICRA Online has assigned the Fundamental Grade ‘4’ and the Valuation Grade ‘B’ to United Spirits Limited (United Spirits). The Fundamental Grade “4” assigned to USL implies that the company has “strong fundamentals”. The Valuation Grade assigned to implies that the company is “moderately undervalued” on a relative basis (as on the date of the grading assigned). Company Profile United Spirits is the largest spirits company in India’s branded spirits market with more than 43% market share. With 112.2 million cases in sales in FY11, the company surpassed Diageo Plc to become the largest spirits company in the world. United Spirits has a very strong and wide portfolio of spirits with 21 of its brands selling more than a million cases a year. The company enjoys a strong 59% market share for its first line brands in India. United Spirits has a well established manufacturing and distribution footprint comprising of 37 owned manufacturing units, 57 contract manufacturing tie-ups and distribution network covering almost 98% of the sales channel in India. The company has grown rapidly over the years through several acquisitions and greenfield expansion. Acquisition of Shaw Wallace in 2005 (second largest player at that time in India) and Whyte & Mackay (fourth largest scotch...
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...Editorial Project Manager: Kierra Bloom Editorial Assistant: Elisabeth Scarpa Director of Marketing: Patrice Lumumba Jones Senior Marketing Manager: Anne Fahlgren Marketing Assistant: Melinda Jensen Senior Managing Editor: Judy Leale Project Manager: Becca Richter Senior Operations Supervisor: Arnold Vila Creative Director: Jon Christiana Senior Art Director: Blair Brown Text and Cover Designer: Blair Brown Media Project Manager, Production: Lisa Rinaldi Media Project Manager, Editorial: Denise Vaughn Full-Service Project Management: S4Carlisle Publishing Services Composition: S4Carlisle Publishing Services Printer/Bindery: Courier/Kendalville Cover Printer: Courier/Kendalville Text Font: Palatino Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on appropriate page within text. Microsoft® and Windows® are registered trademarks of the Microsoft Corporation in the U.S.A. and other countries. Screen shots and icons reprinted with permission from the Microsoft Corporation. This book is not sponsored or endorsed by or affiliated with the Microsoft Corporation. Copyright © 2012, 2009, 2008, 2006, 2003 Pearson Education, Inc.,...
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