1. Assess Anheuser-Busch’s effort to reach an agreement with the Czechs to invest in Budvar. What, if anything, should the American company have done differently?

Anheuser – Busch, the world’s largest brewing company, has had difficulty in using its Budweiser brand name while marketing beer in every country of the world. The underlying reason is its brand name – “Budweiser” and the history rooted within that name. First of all, Budweiser represents the person from the Bohemian town of Budweis of the 14th century Austro-Hungarian Empire. In 1911, it signed an agreement with Budvar – the brewery company established in Budweis, producing its beer under the same Budweiser name. According to it, Budvar would market its beer in continental Europe, whereas Anheuser – Busch would market in United States and in Latin America. Anheuser – Busch began to market its beer in European countries under the “Bud” brand name. Also it won the case which allowed it to sell its beer in Britain under the same “Budweiser” name alongside the Czech brew.

In Czechoslovakia, the communist rule ended in 1989, resulting in privatization of many breweries and other government-owned enterprises. Anheuser-Busch wanted to get the opportunity in 1993 by investing in the Budvar and resolving the trademark issue. The Czech response was negative. Because Czechs consider Budweiser as something more than a brand name, a source of their own national pride with its geographic name. Also they don’t like selling off their businesses to Western companies and also they believe their beer is much more superior to Americans’. To win, Anheuser – Busch made huge efforts such as public relations acts, but also it kept its imperialistic intentions and at the end, it broke off the negotiations and implemented a new strategy of suing to win the right to Budweiser name on basis of country-by-country.

In attempt to win over the Czechs by building a cultural center, start baseball team, opened a café and tough English lesson are the wrong path. Anheuser-Busch should have considered more about the traditional features of Budweiser brand name, rather than suing it only as a simple brand name for its trade profits. It should have been less imperialistic and more honorable to Czechs, in order to soften the relationship. They should have given the image of collaboration rather than obligation. It should have given more importance to the Czech character within the Budweiser name.

It was believed that Budvars European brews test better than Anheuser-Busch American brews. In fact, this was made Budvars reluctant to join Anheuser-Busch if it has to use its name –Budweiser- for inferior brews Anheuser made. To solve this problem, Anheuser should proposed to use Budvars formula instead of insist to maintain it original test. This way both companies could benefit from merging the business.

2. Do you agree with Anheuser-Busch’s decision to break off negotiations and go to court on a country by country basis to assert its rights to the Budweiser name?

We don’t agree with Anheuser-Busch’s decision. First of all, we need to ask them, why they try to get the rights in foreign countries which already owned other company. They try to export their product to another company to make more profit. However, 94 percent of their output is consumed in the United States. Only 6 percent of their output came from foreign countries. Anheuser-Busch’s decision is not a win-win strategy. It is exactly zero-sum strategy. One company get the right to use Budweiser name the others can not get the right. However, some of foreign countries company already used the name since they started to brew their beer. It looks like putting the last before the first. They protect their world wide brand. However, they can not get customer’s good impression. Customer possibly can get bad impression about Budweiser.

In stead of wasting money and time on court as well as risking it name on bad reputation. Anheuser-Busch should try harder to negotiate with Budvars. There are a great number of opportunities for Anhauser-Busch in its partnership with Budvar because the opportunity to partner with Budvar will give American based Anhauser-Busch access to the secrets of one of the best beers in the world. Anhauser-Busch can also expand and market this superior brew in Europe and in the US. Anheuser-Busch will expand Budvar brewing capabilities and

through the American marketing abilities. Time wasted litigating can be better spent in marketing Budweiser in Europe and turning larger profits.