Case Report: BRL Hardy: Globalizing an Australian Wine Company

Kemal Gler Uur Sarolu

BRL HARDY: GLOBALIZING AN AUSTRALIAN WINE COMPANY

The main concepts in the BRL Hardy: Globalizing an Australian Wine Company case were; internationalization, entrepreneurship, implementing strategy, and organizational structure. Below, all of these 4 concepts will be discussed.

Entrepreneurship
Being an entrepreneur means being the one who takes an endeavor. Entrepreneurs assemble resources including innovations, finance and business acumen in an effort to transform innovations into economic goods. This may result in new organizations or may be part of revitalizing mature organizations in response to a perceived opportunity. The most obvious form of entrepreneurship is that of starting new businesses. According to Joseph Schumpeter, an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation. Entrepreneurship employs what Schumpeter called "the gale of creative destruction" to replace in whole or in part inferior innovations across markets and industries, simultaneously creating new products including new business models. In this way, creative destruction is largely responsible for the dynamism of industries and long-run economic growth[1]. He also adds that, entrepreneurship can also be a combination of currently existing inputs.

In the case BRL Hardy: Globalizing an Australian Wine Company, we can see an example of this final comment. After proposing a merger with Hardy, the CEO of the merged company, Steve Millar makes a statement about the strategy of the merged company: becoming one of the worlds first truly wine companies. At that time, there were no really established global wine companies. They were trying to be the first real global wine company, so this was a new concept in the sector, also a good example of entrepreneurial spirit.

Implementing Strategy
One of the most important elements of being a successful company is creating right strategies and implementing them correctly. In the case BRL Hardy: Globalizing an Australian Wine Company, we can see one of the best examples of strategy creation and implementation. While creating a good company strategy, the most important point is to be aware of the strengths. In the case, the merged company has had 3 core strengths: their world-class production facilities, their global brands, and their international distribution. They have combined their strengths with a good organizational structure, and made a successful implementation of their strategies.

Organizational Structure
While forming the new companys executive team, CEO, operations and technical director, and the international trading director came from BRL. In this merger, BRL was the one who is bringing access to fruit, funds, and disciplined management. As they were good in management, the new executive floor mostly composed of former BRL managers. Only the business development director and the Australian sales and marketing manager of Hardy survived as members of new executive floor. This was a logical decision. Both sides were bringing their expertise, and this will be a benefit for the newly merged company. Similar examples can be seen during past years. Not only in mergers and acquisitions, but also in joint ventures; similar examples can be seen. For example; in 1997 Sabanci Group and Danone have established a joint venture[2]. In that case; Danone was bringing their expertise, knowhow, and skills. On the other hand, Sabanci was bringing their marketing expertise and dominance in Turkish market. The executive floor of the firm has than formed in the light of these facts. As

consequence; they have achieved to form a successful joint venture and both sides made profit from this joint venture.

Internationalization
The main strategy of BRL Hardy was to be an international wine company with worldwide product access backed by the marketing capability and distribution muscle to create global brands. For this purpose, making a merger was one of the major steps to be taken. It was a winwin situation for both BRL and Hardy. BRL was good on accessing to fruit, funds, and disciplined management. On the other hand, Hardy was bringing marketing expertise, brands, and winemaking knowhow. Instead of putting millions of dollars and making investment, they were coming together. Moreover, this merger could also be meaningful in terms of fattening the gross margin. Together they have achieved both to direct material by BRL, and to required skills and knowhow by Hardy. As a consequence, the result was a newly promoted brand which has high sales volumes and market shares in Europe, Australia and US.

References
[1] [2] http://en.wikipedia.org/wiki/Entrepreneurship http://www.fundinguniverse.com/company-histories/Haci-Omer-Sabanci-Holdings-AS-

Company-History.html