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Herbert Rau 2 Several factors contribute to the remarkable success of BRL Hardy prior to the merger as well as to the post era. Though the success was long in coming the transformation between the old world and the new brought larger markets, new trends, and increased production to the company. The old world which gave the company its roots began in Thomas Hardy the founder of the company won an international gold medal in lending credibility to the name. Through the years, the company became two in one, one where the value creation was in the award-winning quality, and the other in a mass production of affordable shelf wine.
The two opposing concepts would be the beginning of a tumultuous but winning result of the merger between BRL and Hardy. The wine was a project that Christopher Carson was "deeply committed" to. Banrock Station had earned success in Australia and it was thought to do well in the global market.
CEO, Steve Millar was in charge of looking after the development of the projects. Millar who was committed to decentralization did not find the synergies one would hope for with an acquisition strategy; instead, a conflict between decentralization and centralized control would ensue. Davies would focus on quality wine making with a focus on Australia; whereas, Carson managing director in the UK was concerned first with cost cutting and saving the UK organization from bankruptcy, and implementation of his basic strategy.
So, though both agreed that cost cutting measures would need to be taken, Davies believed in developing the Australian market with the old established fine wine concepts, and Carson believed in a strategy of mass production and low ball pricing for shelf space using joint ventures and acquisition strategies around the globe to produce the wine. The marketing strategies were opposing and a power struggle between the two ensued.
Thus, the source of conflict was in the opposing marketing strategies, branding, and labeling. Millar hoped to settle the differences by negotiation.
The negotiations did not take a position in favor of either of the two; Carson or Davies, but rather gave them both the leeway they were seeking. Carson argued that the UK was not yet a branded territory and continued to resist the brand driven strategy favored by Davies.
To implement this strategic shift Davies felt the Reynella headquarters had to be the global brand owners. Carson of course would disagree. Working with his concept that the European winemakers had to be the global brand owners, he returned some success and revisited a relationship with Italian winemakers in Sicily. And though Millar was impressed, he was somewhat standoffish because of conflicts that were arising with the Chilean growers and the failure in Ricasoli.
This also made Reynella headquarters in Australia more than nervous. Carson responded by hiring Paul Browne, a decision he would later regret. Once again the conflict between Australia, and the UK appeared to be one with no resolve. Davies who otherwise was in favor of decentralization argued that too much decentralizing would be cause for the company to lose all control of their brands and argued for more central control in Australia.
The first outcome involves the best decision for the first major issue. The branding, packaging, and launch expenses are relatively small, and despite the potential overload of human resources, the forecasted sales looked to be worth the risk. The Chilean farmers who have not performed as expected and whose costs were already exceeding expectations should be eliminated. The Italian co-ops are much more responsive to ownership 6 and do not act as suppliers as the Chileans did.
It does not have to be a choice between a European wine or an Australian wine it can be both. The product is already a success in Australia, and New Zealand, and Canadian and American distributors like it.
Because Carson is level headed I think he too would agree that Banrock Station is not just the better choice but the only choice. Browne should be terminated. In comparing the management style of Millar to Shackleton and Schulman, I would say he has created an open system, but that he as a leader is indecisive and ineffective. He leaves both the reader and his teams to wonder about his vision and where he sees the company going.
If we did not know that the goal was to become an international wine making company we would have no sense of direction. Though this is often the case with an open system, the leader should be able to communicate the vision he has for the company in a way that says it is he that is leading. On the other hand, the system could almost be viewed as being cybernetic. If we isolate the goal, becoming an international wine making company, as being the program and the parts being the Australian headquarters, and the UK headquarters, we can see that the temperature changes are made when new information presented itself and when 7 it did a set of contingent behavior mechanisms were triggered.
The policy center, Australia, set the goal for the company to be an international wine making conglomerate, the environment submitted the orders, and the demand was understood. Any discrepancies that appeared became necessary corrective action and were controlled by the hot and cold reactors. The second loop provides feedback from the external environment and indications from customers or other outside participants let the inside loop know if it is necessary to change the goals.
When this happens, the inside thermostat goes into gear and triggers a response. I would think this an important aspect when taking on a project with the goal of becoming global. It is also a counter to critical-thinking barriers of which there were a few. The potential barriers to critical thinking became apparent and relevant when the conflicts between the UK and Australia remained a primary source of indecision.
The protagonist and the key players had some learning disabilities, which added to the conflict. There was a certain element of blindness shared by Millar, Davies, and Carson.
I think perhaps all fell in the competency trap with a periodic false sense of confidence. There was certainly a projection of 8 personal interests, which oftentimes interfered with the group think, and there were deficiencies in conceptual mapping.
At times, there was a lack of coordination between competing perspectives often because of the distortion of personal interests. While trying to attain the goal of becoming a multinational conglomerate Millar did try to counter barriers to critical thinking by generating change, and solutions to the problems that occurred. For example, when the going got tough in the UK, Millar thought to better develop the senior executive level and introduced the idea to Carson, who followed through by hiring Browne.
But, it was more Carson then Millar, who was capable of introducing several different hypotheses, and then define the problems in ways that could be thought out and acted on. I believe that above all else Millar was flexible. On the plus side you could see learning taking place. There was movement from thought to action, and you watched it go back and forth.
This action took place mainly between Carson and Davies. Their overall objectives were the same but their way of getting there was entirely different. Interestingly, there was a self-stabilizing thermostat that went from hot to cold that all key participants seemed to respond to. In the end, there were simply no simple solutions and no final answers. The teams were adaptable, and they survived the journey. Organizations and Organizing. Rational, Natural, and Open System Perspectives. Related Papers.
BRL Hardy Globalizing an Australian Wine Company Case Study Help - Case Solution & Analysis
BRL Hardy: Globalizing an Australian Wine Company