BRL Hardy is a merger of two wine companies BRL and Hardy that was established in the year 1992. Operating within the wine industry and setting high goals can be challenging for every organization, and BRL Hardy faced specific issues in terms of creating a global wine brand. Globalizing the company is the primary goal of BRLH, which requires the implementation of new strategies. The purpose of this paper is to conduct a careful analysis of the company’s three strategic options and to make recommendations for them.
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Christopher Carson, as a managing director BRL Hardy Europe, has suggested a new wine line that can open new horizons for the business. D’istinto is a wine brand that is created in collaboration with a Sicilian winery. This new line emphasizes the Mediterranean lifestyle, focusing on warm atmosphere, on delicious foods, and on creating a cozy environment. The major goal of BRL Hardy is to create a global brand, and Carson believed that D’istinto could “help to build BRLH Europe in size, impact, and reputation.”
The description of this new line fits within the objective of the company in terms of quality and price combination, brand image, and desired experience to be delivered to the consumers. The price range for D’istinto is from £3.49 to £5.99 per bottle, which positions the brand within the affordable pricing strategy that is important to create a globally recognized image (Bartlett). Consequently, D’istinto brand fits the goal of globalization with its price and image.
D’Istinto line offers various wines at different prices within a narrow range, which sort of creates a significant scope of the implementation of this product. However, the concerns for the management of BRLH about this specific wine line are based on the previous experiences of working with Chilean wineries. Partnerships with outsourced suppliers have not justified itself for the company in the case of Mapocho, where the sales haven’t reached even one-third of the estimated amount. Collaborating with Sicilian wineries implies extra costs for the company, while the price for D’istinto bottles stays at an affordable level (Bartlett). Therefore, this kind of strategy might create too many unexpected challenges for the company on the functional and financial levels and might not have the desired outcome.
The positioning of D’istinto brand is unique, which creates a good potential competitive advantage for this product line. Carson emphasized strong marketing strategies for these wines, like sticking a booklet to each bottle, which created the sale of the experience along with the high-quality product. Alongside with attractive and distinct image of the brand, there is an issue of its acceptance by the leaders of the company.
Though D’istinto offers something unique, the management team that consists mostly from BRL employees, rather than Hardy, highly focuses on the numbers (Bartlett). In other words, the uniqueness of D’istinto experience proposed by Carson might not be valued that much as the potential sales that the desired global brand needs to generate. Thus, collaboration with Sicilian wineries and creating a product that doesn’t cover the scope of a big target market is risky for BRLH.
Paul Browne, an Australian marketing manager, came to work with Carson and proposed his strategic option that can lift BRLH to the creation of the global brand. His suggestion was Kelly’s Revenge, an entry-level Australian wine that targets a younger audience, maybe those who are just starting their journey of wine drinking culture. The uniqueness of this wine line comes from its name because it is called after an essential figure in the Australian wine industry history (Bartlett). Thus, Kelly’s Revenge was a good alternative to pursue the further development of the company.
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The price for Kelly’s Revenge brand was established to be £3.99 with a chance to be promoted at £3.49, which fits the goal of making the brand globalized because of its affordability. Colorful label, affordable price, catching history of the name – all of those are the right signs for the desired scope of operations and the competitive advantage. However, this idea did not gain the CEO support, who immediately expressed negative feedback about this line (Bartlett). Kelly’s Revenge has good potential in becoming world-famous, but it also has a chance of becoming a mass-market wine with no distinct features.
In financial terms, this new line can generate good sales and high revenues. In terms of functionality, purchasing, and accessibility, Kelly’s Revenge is a good alternative because it does not require collaborations with unknown suppliers. Paul Browne believed that this brand brings new opportunities to the company, introducing something fun and original (Bartlett). Though BRLH wants to create a global brand and generate high sales, it is crucial to remember the established image of the company, which might be changed with an implementation of the brand like KR. Therefore, besides a good fit for the globalization of the brand, Kelly’s Revenge creates potential challenges and risks and might not justify the expectations.
The third strategic alternative proposed by BLRH is Banrock Station wines, which represents an entry-level Australian wine that had its success in Australia. The integration of Banrock Station to the European market is highly supported by the leaders of the company, suggesting that it can be a good step towards creating the global brand. An integral feature of this wine line, as it positions itself as an environmentally responsible product. The label on the bottle does not imply anything unique but focuses on simplicity. The suggested price range for BS in the UK is the same as for Kelly’s Revenge (Bartlett). Banrock Station is a reliable option that has all the chances to enter the market in Europe successfully.
It is important to note that Banrock Station, unlike D’istinto and Kelly’s Revenge, is not a new line, which significantly reduces financial risks of failure. This wine line offers stability and standards to its consumers, based on previous experiences and success.
Affordable price, simple label, focus on the broad audience are the positive sides of BS. However, the European management team did not support the idea of Banrock Station, stating the reasons that it is too dull and that environmental positioning would not work (Bartlett). Still, the possible reason is that there was a high emphasis on KR product line, and accepting another direction would be too complicated.
Banrock Station represents a good competitive advantage due to its positioning, simplicity, and pricing strategy. Earth-tone label and emphasis on the environment, on the contrary, create a perception of good-quality wine. It is a functional line on operational, purchasing, and marketing levels due to the gained experience in Australia. The risks for this product line are lower than for KR and D’istinto, which implies a high possible success rate and the possibility of becoming a global brand.
In conclusion, there is a controversy of different management teams that might prevent an objective view on which alternative is the best. Based on the evaluation above, one should note that Banrock Station represents the most favorable alternative for further development and for successfully becoming a global brand. Without any doubt, it is hard to predict the same success that this product had in Australia, but the chances are very high.
Bartlett, Christopher A. “BRL Hardy: Globalizing an Australian Wine Company,” 2000.