Case analysis saku essay
The case details the situation of Saku Olletehase AS within the moment the management crew is speaking about their item portfolio strategy. Lately the sales of their flagship manufacturer, Saku, chop down from forty eight per cent to 42. a few per cent of market share. Within this decline of beer usage, they have built gains with other alcoholic and non-e alcohol based drinks. At this point the management team has to choose how to proceed using their product stock portfolio.
* Start exporting Saku to Finland * Shift focus to other alcohol addiction products with growing industry demand, cider and long drinks 5. Shift target more to bottled water or perhaps divest this product line (disappointing results) * Innovate and try to boost revenue for their flagship brand again * Increase their function as distributor of imported refreshments Analysis with the issues.
If we assess the Estonian beverages marketplace we observe that the beer market has a tendency to stabilize these days, this in combination with the fact that imported drinks are growing with doze, 5% leads to an fall of usage of home-based beer.
On the other hand we see an increase of different beverages: cider, long drinks, bottled water and soft drinks. Together with the data through the exhibits we come across that the total potential marketplace of alcoholic beverages amounts to a little above one million people. A more detailed analysis by using a SWOT matrix:
Strengths 2. Strong Flagship product Saku * Industry leader in beer industry (market talk about: 42%) 2. Promotion through concerts and events * Customer dedication is high in beverage market 2. Growth in cider and long drinks, which are high-margin products 2. Growth in alternative markets: the brought in beer, water in bottles and sodas * Cost advantage with respect to Finland in alcoholic beverages| Weaknesses 5. Dissapointing overall performance in bottled water market (15%) * Decline in product sales of flagship product 5. Not a global brand * Competing with domestic players and global players 5. Rather low market share in soft drink industry (4%) and Long drinks market.
(13%)| Opportunities * Growth chances in neighboring countries 5. Active in domestic development markets pertaining to cider, soft drinks, bottled water and long refreshments * Value advantage in Estonia intended for beers in comparison to prices in Finland 2. Entry in European Union makes export easier| Threats * Though competition from household brand “A Le Coq and “Viru * Elevating competition by imported quality beers such as Heineken, Carlsberg * Water in bottles market is likely to saturate 5. Increased competition leads to decreasing margins|.
The growth share matrix or also known as the BCG-matrix allows us to analyze how to spend resources within a company. Applied to Saku the BCG matrix would be because following: The amount cow of Saku is definitely clearly Saku beer being that they are generating practically 80% of the sales. The stars or the refreshments that are inside the growth stage are the imported beers, the long refreshments and the ciders. These are not yet creating a lot of cash flow but there is certainly the opportunity here to build big money flows via these products in the future.
Mineral water is seen as problem mark, since this product line is anticipated to saturate and has been offering disappointing outcomes. The fizzy drinks can be seen because the “dog because just for this product line there exists already a mature player on the market. Saku noesn’t need the methods to compete with Pepsi and will probably be unable to increase it is market share substantially. Recommendations Depending on the each of our in-depth research we determine the following to get Saku; First of all we think Saku should take the risk to grow to Finland.
They have already the manufacturer recognition generally there and with Estonia coming into the European Union, exporting to Finland will be fairly easy. Thanks to the larger prices in Finland, they will also be able to discriminate their prices in the Finn market. This way they will also conserve the beer tourism in Estonia. Secondly they must maintain their particular cash cow so they can maintain financing ad for their superstars with these kinds of steady funds flows. And so complementary to the decision may be the call to use cash produced by Saku’s flagship products for advertising cider, long drinks and brought in beers.
In this manner Saku enables itself to capture as much as possible from the growing craze of these products. As fizzy drinks is a market where there is actually a mature person this is not a priority for us. They will maintain the product sales of imported soft drinks, since the margins about these products happen to be rather for the high part but they need not try taking more business. Coca-Cola may easily outcompete these people, so this might be a waste from the advertisement finances.