Case Synopsis The case is based on how Wolter’s, a brewing company was able to survive and grow with a distinctive marketing strategy. The company does a really good job by selling their products to the niche market and maintaining good customer relationships with the local consumers. Because the growth in their local market was limited they were considering exporting to other countries as an option to increase their sales. The stakeholders of the company competently adopted a problem solving technique. Although they were doing really well in the competitive market, they had to face some legal and political challenges.
Overall, Wolters did a superior job by utilizing all the opportunities for better growth and improvement of the company. Problem Identification 1. The very important problem that Wolter had to face was reviving its brand after being separated from InBev. It had to rebuild the organisational structure from the scratch. This was one of the biggest challenge the company had to face. 2. Facing political, legal challenges was other problem for the company. The company was bound with a lot of restrictions on alcohol advertising. It also lost a lawsuit against the association of brewers in Munich.
This might give the competitors a chance to strengthen their product. 3. Another important problem that the company had to keep in mind was financing the high cost of bottling and canning facility. 4. Since the domestic market it marketed had a limited growth, it is challenging to decide whether to go international or stay in the regional market. As a huge investment would be needed for the company to go international and export. (domestic less growth, international more) 5. Developing new marketing segments and managing economies of scale can be challenging for the company.
Analysis Wolters Brewery is a brewer of beer located in the small city of Braunchsweig, Germany. In the early 2000’s it became a subsidiary of InBev, which was a multinational brewing enterprise. InBev decided to cut down its costs and operate only in large-scale economies. Since, the company was small and was only known to the locals and had a limited growth potential it was meant to be shut. Wolter’s had a lot of presence in the community as they organised local events and sponsored sports and cultural events.
They were a means of employment to hundreds of people. This helped them gain a lot support from the local community. At the same time Wolters faced some challenges due to subsidy regulations and the lack of capital . To save the company four formers and current managers met up with the city and the local bank to create a plan of action. With that, Wolters GmbH (LLC) was formed. After the meeting was done, a negotiation was made. Inbev was forced to sell the industrial estate back to the city and to provide the company with a loan of 3 million euros.
In this way the entrepreneurs, politicians and bankers helped make Wolters an independent company. In 2006 the company felt the need to rebuild its organizational structure as it had no administration, marketing or distribution department. It now started to work on and strengthen its traditional links by regaining its old customers and starting on new ones. Due to the clever decisions Wolters GmbH made, it was able to repay the debt ahead of schedule, thus ensuring rights to the company name. Wolters first focused on strengthening local relationships and building brand awareness in the local region.
It allocated about more than half of its marketing budget towards sports sponsorships and cultural events. Very less money was spent on traditional media advertising. It also started doing contract brewing where it brewed beer for other brands. It looked at the possibility to export its beer to other countries and increase its sales and make more profit. At the end the case leaves us with many unanswered questions. Should Wolters continue to focus on the regional strategy it had or should it pursue a growth strategy and how?
Wolters means of future marketing and competing with other multinational brewers is unclear. It still has to decide how to finance money to fulfill the canning and packaging facilities and modernize the company and its organizational structure. Evaluation of alternatives •The company could improve its competitive position in the domestic market using the Porter’s five forces. By positioning itself as a low cost provider the company can protect itself from competitors, as lower costs would allow the company to earn returns even if its competitors are taking away profits.
Turning the negatives of legal restrictions into positive and utilizing that opportunity to create a good PR would help Wolters attract more customers. By giving a message about alcohol abuse in their ads they can depict itself as a socially responsible brand. This can help the create more loyal customers for the company. The company must first focus on it’s domestic market and export later. •To increase the size of potential markets Wolters need to pursue international expansion. As seen in the case large breweries were only interested in orders that were a minimun 10,000 hl.
So, Wolters needs to increase the volume of speciality beers to be exported in order to deal with large breweries. At the same time, they need to keep in mind the political and currency risks in exporting to other countries. Conclusion I believe, Wolters has established itself in the regional market pretty well. It should now create and focus on its international strategy. It should do proper research and partner with local firms to assist from their priceless knowledge of their own domestic markets. By doing this it can help improve their market share.
Concept Inventory The case is related to some of the topics that we covered in class. It talks about the marketing strategy that Wolters used to revive as an independent organisation and create brand awareness in the local community. The case also refers to the Porter’s five forces model. For the company to grow and expand internationally, it had to keep in mind the threat of new entrants, its competitors, its buyers and the threat of new substitutes. Works Cited Wolters Brewery (B): Traditions For The Future, Professor Klaus Meyer, March 2012.