Boon Rawd Brewery Company Essay
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Throughout the years, Boon Rawd has diversified into an award-winning brewer and beverage maker, exporting its globally recognized products worldwide. The key to success and also be a mission statement is “Transparency! We do the right things. We live as a good citizen and don’t cut corners.” This principle is one of many that have helped Singha obtain the largest market share for beer in Thailand.
Domestically, the company sees strong growth in the beer segment dominated by Singha. It expects local demand to grow 6 percent next year to 1.
2 billion liters by inaugurating a new facility in 2009.
Aside from Singha, Boon Rawd sells other beer varieties, soda water, drinking water, ready-to-drink fruit juices, ready-todrink coffee and tea beverages under various brands, such as Thai Beer, Leo, Moshi and B-ing, a flavored vitamin functional drink.
Although Boon Rawd got many awards in “beer capitals” such as Brussels, Osaka, America, Australia and New Zealand but in the word of president “you have to dare to challenge the outside world” which makes them still not to stop expanding their market and find new opportunities over time.
Consequently, we decide to analyze and evaluate them for the purpose of getting insight in their international management plans, their competitive advantages, and their human resource management. Besides, this study is also included with countries analysis, industry analysis, and international market too.
For the courses of action, we begin with SWOT analysis of Boon Rawd including with providing the company background. Then we do the countries analysis such as GDP, population size, inflation and business environment in those countries. Next, we also find the information that can be fit to Boon Rawd products by studying from primary and secondary sources and do PEST analysis. Lastly, we would examine the marketing strategies of Boon Rawd such as how they trained their employees, how they developed their products, how they could make and retained the international customer relationship in order to penetrate those international markets and find the best way that can make them success in long-term future.
Corporate BackgroundWhich industry or industries is the firm operating in?•Define the company´s industryBoon Rawd Brewery Co. Ltd. is the largest and the oldest brewery in Thailand. It was established in 1933 by Boonrawd Srethabutra, on whom HM King Prajadhipok Rama VIII bestowed the aristocratic title of Phraya Bhirom Bhakdi. In that time Thailand was called “Siam” until 1939 it was changed to Thailand. Nowadays the brewery is still under the Bhirom Bhakdi family management.
At first the company produced and sold only beers like Singha, Leo and Thai beer, which Singha is the most famous and popular beer. Later when the company had grown to produce over 800 million liters of beer they started to producing soft drinks as well. They are producing drinking water, soda water, ready-to-drink juice, ready-to-drink green tea, B-ing “lifestyle functional drink” and some other soft drinks also. So The Boon Rawd Brewery specialized to Brewery and soft drinks industry. Today they have over 2000 employees in nine factories across the Thailand. They produce annually over one billion liters of beer and much more other drinks.
Who are the customers?•Identify and segment target customersThe Company has a versatile range of goods and that´s one of the reasons to succeed. They sell necessary product like simply drinking water and everybody has to drink water to stay alive. Beer is also popular among adult and young adult nations and they have both quality and cheap beers so they can reach most of the customer, who drinks beer. Juice and that kind of soft drinks are for everybody as well, but especially children and teens like to drink juice a lot. Green tea and coffee are more for adults. So they can sell products to huge part of the population.
Where does the company serve?•Define company´s geographic scopeThe company primarily operates in Thailand, where it is headquartered in Bangkok. Network of The Boon Rawd Brewery Co. includes three breweries and six soft drinks factories all over the Thailand. Other factories located in strategic regions across The Thailand, in Chiangmai, Khonkaen, Singburi, Ayutthaya, Pathum Thani and Surat Thani.
The Boon Rawd Brewery Co. Ltd. owns two breweries in German. The first one located in the town of Mittweida, that brew Mittweida beer and the second one brews Gerand Hartmanndorf beer in the town of Gerand Hartmanndorf.
Nowadays their products are exported to over 25 countries around the world. The largest export country is neighbor country Cambodia; followed markets are in United State, United Kingdom, Singapore, Malaysia and Japan. In addition they sell their product to China, Philippine, Laos and Vietnam. Sometimes they sell product to some other neighbor countries as well, but sales are sporadic.
What needs are being satisfied by the company´s goods or services?•Define the company´s core products/servicesBoon Rawd brewery has regained its market leader of beer in Thailand. Singha beer is the leading product of the Boon Rawd Brewery Co. Singha beer has been Thailand’s most popular beer for many years. Leo is also famous beer brand, but they have another strategy with Leo, when Singha beer is high quality, good and nice beer, Leo is cheap and less quality beer. The company sells Thai beer as well, and lot of different soft drinks, like ready-to-drink juices, ready-to-drink green tea, drinking water, soft water and something like that.
What are the company’s distinctive competencies?•What resources does the company have?•What capabilities does the company possess?As previously was mentioned, Boon Rawd Brewery has 2000 employees in 9 factories in various parts of Thailand. This eases the distribution in the country internally, but it also facilitates the company to respond to the already widespread demand throughout the world. If the demand will grow even further, it is necessary to add resources so that supply will keep up with demand.
Boon Rawd Brewery has a ready customer base and especially Singha has been received positive welcome also widely outside of Thailand. Thus, if the company desires to internationalize to the wider world, it is a smaller problem, because it is already well underway and the groundwork for potential follow-up measures have already been made.
Boon Rawd Brewery provides and offers different kind of products to different kind of customers and their needs. As previously mentioned, the Boon Rawd Brewery has a wide range, which includes various drinks from beers to juices and from energy drinks to soda water. This kind of range, which has planned with widely thinking, provides a more stable support for the company’s activities. So, if the company’s some of their individual product’s sales might drop surprisingly, the company is not so vulnerable.
Which generic strategy in currently used by the company?•Based on the value-chain analysisCurrently, Boon Rawd Brewery invests to the visibility of company and making products more familiar among consumers. The company also makes its share of supporting important societal issues. It invests to sport, culture and environmental. It has brought to use A Waste Water Management System, which is designed to minimize the environmental impact on the Chao Phraya River.
Boon Rawd Brewery has its own factories in Thailand and in addition, it currently owns 2 other factories in Europe. The company is expanding slowly but with certainty around the world. So far, customers are widely from different parts of the world, so it seems to be only a matter of time before the company decides to buy or set up new factories in other countries.
The fact that the company has won several awards over the years in relation to the quality of beer, says that the company invests a lot of resources in the actual beer making process.
Country analysis and attractiveness assessmentBrazil PEST analysisPolitical:1.Brazilian citizens are free to relocate throughout the country. In addition, all citizens are free to engage in any business activity, as long it is a legitimate activity. It’s a positive policy for us to take a share of Brazilian market.
2.Citizens or non-citizen, are allow owning private properties in Brazilian territory. Governmental offices issue a title of property, which guaranty one’s ownership of a real, personal, or intellectual property. The process of issuing a property title can be somewhat time consuming; however, when the process is due, the owner is protected by laws, and enforced by judicial system. In addition, some Southern cities had successfully settle negotiations over public land in order to help low income citizens to own a private property. This kind of law and political environment can ensure the safety for our intelligent property of beverage and ownership for brewery and all the assets we owned.
3.Brazil has no yet achieved institutional stability. Government, courts, school, business, and specially law enforcement are struggling to bring solid bases of stability for Brazil. Fernando Henrique Cardoso, former president, did a good job in recognizing the state’s responsibility for the injustices during dictatorship. On the other hand, violations of human rights still an issue in Brazil, Inflation seems under control for now, but Brazilians had experienced inflation as high as 5,000 percent a year, during late 80’s. Most recently, the revocation of rules, and addition of new provisions are still happening in Brazil. Therefore, skepticism is among Brazilians, and international observers.
4.The banking system in Brazil has been improving over the past few years; however, more than 50% of the Brazilian population has no means to ever get a bank loan, neither open a bank account. The first problem is that millions of Brazilians have low income. The second problem lies on the credit bureau, which has a deficiency on tracking one’s credit history. Most Brazilians prefer to use the direct financing system, in other words, a store finances one’s purchase, breaking it in small monthly payments, and charging very high interests. If the individual do not pay his or her bills, then the store can confiscate the product, and report his or her name to the credit bureau.
5.Brazilian legislators are far from calling themselves effective in work. Brazilian economy still has non-satisfactory fluctuation, more than 40% of the population lives in total poverty, infant mortality is high, transportation and educational system have big issues to be solved, and crime and corruption are a huge problem. After Fernando Henrique Cardoso, former president, first year in office, several denounces came about some Brazilian legislators being involved in scheme and corruption scandals. Such news did not surprise most Brazilians, except for the fact that someone had the courage to speak out.
6.Brazilian government has a long history of resisting the increase of minimum wages. Its main reasons are: a) if minimum wages increase the Brazilian government will not have enough money to pay for all the social security pensions, and governmental employees; b) factory companies say that if minimum wages are increased it would be catastrophic for the companies growth, since their budget for wages and benefits will increase tremendously. In addition, companies claim that if the minimum wages are increase some companies will be force to file for bankruptcy with leads to lay-offs, and increase of national unemployment rates. Our company should be much careful about this.
7.Brazil has some of the most strict environment protection laws in the world; such laws are design to protect citizens, the fauna, and flora of Brazilian territory. Despite of the governmental efforts, the process of reinforcing such laws has not been successful; part of it is due to the inefficiency of some governmental agencies. For example, the Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renovaveis (IBAMA) is an the governmental agency responsible for the formulation, coordination, execution, and reinforcement of environmental laws.
8.Any country must protect and promote national enterprises; however, Brazilian government is being over protective. It causes an unbalance cycle of dependency among Brazilian enterprises, which have more to lose because free market would promote competition, and consequently it promotes the development of new technology and money flow. Brazilian government has a long history of being over protective toward its national enterprises. The means in which the government uses as protection strategies vary and it changes time to time. For example, Brazil has an extended list of shipping requirements for imported goods; these requirements cause a difficult time to foreign enterprise, and the process of shipping a nightmare. In addition, the import taxes are high, restrictions on foreign-produce advertising is a strict, and complex bureaucratic process–all make foreign enterprises less capable to compete with Brazilian enterprises in Brazilian territory.
Economic:1.Brazilian government requires that all business transactions be made in Brazilian currency (reais), and all foreign currencies must be converted before any business transactions.
2.Brazilian government requires that only one currency be use inside the country, and the Brazilian currency is called the “real”. However, many businesses will accept dollar or euro as form of payment for good or services. Many Brazilians will save the foreign bills as form of investment because they believe that such currencies will rise in value, and if they not, at least it will not devalue as reais would. In addition, some fortunate business people prefer to be paid in dollar because it, later, will be transported outside the country.
3.Brazilian government has been consistently causing a budget deficit in its domestic budget. In other words, the Brazilian government has been spending more than it collects from taxes each year.
4.Many Brazilian citizens dream with the idea of opening their own business; however, due to high taxation, and labor benefits Brazilians are skeptical about the risks of opening a small or median enterprise. Nerveless, Brazilians citizens welcome new business enterprises because it generates jobs for the citizens. On the other hand, there is a popular believe that if one opens a business enterprise he or she must dodged taxes. Brazilians often avoid paying taxes, as much and as long as they can, because they not believe in the socialist system.
5.Between the years of 2001 through 2003, Brazil shows minimal signs of vulnerability to outside forces. Brazil’s foreign trade impact ratio was gradually increasing during the period from 1999 to 2008. It is likely that Brazil could create more wealth to its citizens by increasing its foreign trade impact.
Social:1.In Brazil, one’s ability to create wealth is filled with barriers, especially for low background citizens. It is important to say that if one’s will is strong, he or she might have a chance to advance economically; however, such dream is not a reality to millions of young Brazilians. First, Brazilian education system does not embrace the minority groups. Ironically, the public universities, free education, are primarily composed of elite youth, and private universities are composed of poor or middle class youth. Several philanthropic entities focus on helping Brazilian kids to develop some kind of skills, in order to help them to get a job, but these entities mistakenly forget to encourage and educate kids to pursue an academic life. In general, Brazilian society believes that if one has born poor, he or she will never make a good living.
2.Crime rates in Brazil have been increasing, and many are not reported. This perception frequently can compromise one’s decision of opening a small or media enterprise. Police fails to assure safety for citizens as well for business. Into the large corporations such fear is reduce due to fact that large companies can afford to pay for an team of security guards. These are what our company should focus and pay a attention to what will hurt our line of business.
3.Protection of public health and safety in Brazil is quite bad, because infant mortality and mal-nutrition are the leading reasons fo1r death among children between ages one to five. Mal nutrition still kills children and adults in Brazil. In addition, the Brazilian government has poor management of waste, and food inspections. The Brazilian government has a long way to go before infant mortality rate decreases to worldwide standards.
Technological:1.Brazilian communication system is good. Cities and countryside are equipped with many means of communications (phone, cell phones, fax, television, radio) with exception of computer. The use of computers as a mean of communication is a process that has been growing in Brazil, but due to the high cost of computer hardware it stills a slow growth. The most popular mass communication is television, and Brazilians love soap opera.
TV networks strategically start the TV news between the hours of the most popular soap opera, seven to eight p.m. In addition, house and cell phones became more affordable for Brazilians since the Brazilian government had privatized its telecommunication corporation. There is a real potential growth for computer in Brazil. It is believe that soon, the Brazilian government will facilitate and lower taxes for import of computers, which will make computers much affordable item to Brazilians. These infrastructures can ensure that our local communication and promotion can be done efficiently and effectively.
2.Brazilian transportation system is reasonable; it has some good and bad sides. Brazil has roads, rail, air, and ships, but not all works efficiently. Brazil is fortunate because it has south to north regions connected by the Atlantic Ocean. Therefore, the navigation system is good for transporting large volume of goods throughout the Brazilian coast, but it is not good for transporting people due to long journey. The Brazilian air system excellent, and recently it is becoming more affordable to Brazilians, but still not cheap to many. The railroad system is, with exception of urban rails, in precarious condition. It requires a great amount of capital investment, mostly for repairs of rails, newer and faster trains, more employees, and newer distribution of rails throughout the country.
In similar situation are the roads of Brazil. Highways and interstates are in great need for repair and expansion. Many enterprises have difficulties in transporting goods among states because the highways are very dangerous. Brazilian highways and interstates are filled with dangerous fissures on the road, not enough roads, and damaged bridges. To make things worse, highway pirates are a big problem in Brazil. Often, the news channel announces the robbery of a loaded truck, and the death of the truck driver. High rates of lost, employees and goods, forces enterprises to reevaluate the company’s expansion due to high costs and risks of transporting goods. This base can help us to which transportation tools we should focus and which we should avoid to use.
India PEST analysisPolitical:1.slow-down in government decisions due to political instability2.adverse changes or unpredictability on foreign investment, import, ownership, pricing or tax issues3.unexpected delays and cost-overruns due to overlapping governmental jurisdiction4.In recent years, successive Indian Governments have sought to improve the performance of these programmers by decentralizing their administration, vesting village governments with greater responsibility for their monitoring and oversight. An academic literature hypothesizes that socioeconomic divisions within villages and the weak political strength of the poor reduces the effectiveness of decentralized programmers since, under these conditions, elites are able to ‘capture’ funds intended for the poor.
This paper argues that the effect of administrative decentralization of poverty programmers and local public goods on the magnitude of benefits to the poor depends not just on their political strength but also on the incentives the non-poor have to improve the welfare of the poor. The design of policy pays insufficient attention to such incentive issues. Empirical analysis provides support for this belief. The regression analysis of the paper reveals that welfare receipts affect the labor supply decisions of the poor and that the implementation of welfare programmers under control of village governments takes these effects into account.