The above resources can now be examined by identifying the activities and links between them. The Value Chain in SAA 2 and the description of the linkages in SAA 4 both in Session 4 provide a base for this discussion.
Also the ‘Activity Map’ on page 31 of Session 4 breaks down the resources and competences to give a clear idea of how their relationship contributes towards Brasseries Kronenbourg overall business strategy.
The three strategy headings are listed below with an explanation of how the ‘resources and competences’ contribute to the strategy’s being accomplished.
The top management at Brasseries Kronenbourg view their business as a ‘ heavy industry ‘ with a current overcapacity of approx. 30 %, therefore ‘efficient operations’ is a key strategy.
To satisfy this, high investments in industrial plant and equipment have taken place in order to modernise production sites, improving productivity through automation. The advances in process automation and good management in economics of scale have reduced costs not only through better production techniques, but with reductions in staff levels.
Sufficient investment has also been placed in personnel training, from apprenticeship programmes to professional development and qualifications. The Human Resource Management activities also includes the participation of the personnel in the profits of the firm.
With combining varies functions on the merger of Kronenburg and Kanterbrau, a larger pool of expertise were available to strength operations. The re-structuring also reduced the number of hierarchical levels, as was common in the parent groups structure resulting in, avoiding complicated procedures and free circulation of information, cashflow and people.
All of the above aspects results in efficient operations throughout the Brasseries Kronenbourg Value Chain. The successful implication of this strategy has also assisted in the overall strategies, centralised to the parent group Danone. For example efficient operations have resulted in a world record for low water consumption which ‘strengths the corporate image’ of Danone on the concern for this ecological issue.
With such a broad competitive market, another company strategy is to develop several brands, to address all the market segments according to quality and alcohol levels. Brasseries Kronenbourg achieves this by good ‘brand management’ and having specific tailor made approaches to the distinct distribution channels, these being ‘cafes and restaurants’ and ‘food retailing’.
The ‘Pluton’ merchandising system provides a linkage between Brasseries Kronenbourg Value Chain and the Retailers Value Chain, by improving the presentation of the beers and adapting it to each retail chain, each region and each season. The development of this new packaging is made possible, due to working in conjunction with another division of Danone, this being an example of linkage with the value chain of another business within the group.
Within the French market Kronenbourg dominates the mass market segment, with brands such as Kronenbourg and Kronenbourg 1664, on top of which it even produces 600,000 hectolitres under a private label for a major retail chain. Although on the international level these brands are not as well founded as Heineken, Kronenbourg Brasseries have established a beer in the non alcoholic sector ‘Tourtel’. The company’s innovation has also tried to make the French market more interesting by developing new beers such as Tourtel 100% Pure, German, British and Christmas Kronenbourg ranges.
Although in the increasing sector of special beers with their high alcohol levels, Kronenbourg Brasseries have only addressed this issue by selling beers from their Belgian sister company in the Beer Division ‘Alken-Maes’ and importing stouts from Guinness.
The continuing developed and innovation for their products has resulted in the company winning awards for their glass bottles and temperature sensitive labels. These along with sponsorship deals and recycling issues have strengthened the Kronenbourg brand name and the overall corporate image.
With only the upmarket beers covering the export costs of their distribution and marketing, the sales volume required to create a significant foreign market position could not be achieved. To solve this problem Brasseries Kronenbourg developed a broad strategy to combine their international brands with strong local brands in each of the foreign markets, through partnerships and acquisitions.
Brasseries Kronenbourg would signal a potential partnership to the beer division working on s selection criteria. The commercial value would then be analysised by Danone, who would finance the deal. The Beer Division would ensure that any skills in marketing, production or research and development would be available in the restructuring of the new acquisition to meet the integration into the overall Danone network. The result for Brasseries Kronenbourg would be market control of their products produced by their new local partnerships.