Pernod-Ricard is a French company which produces alcoholic beverages. It was established in 1975 with the merger of two French anise-based spirit producers namely Pernod and Ricard.
During the initial years, the company's strategy was to strengthen its global position by building a strong international supply and retail network. Soon the company started to expand, purchasing local companies in order to enter foreign markets. Since this strategy was very successful, Pernod-Ricard started a series of big mergers to settle its position as one of the leading alcohol industries' in the world.
Pernod-Ricard is considered as the biggest (along with the British Diageo) alcoholic beverage producer in the world. It sells 97 million boxes of alcohol a year (one box being 9L), its revenue amounts to €7.2 billion and its profit is estimated to a comfortable €850 million. Pernod-Ricard employs around 19,000 people all across the globe.
The most recent and most important acquisition in the PR history would be the acquisition of the Swedish giant V&S. As a matter of fact that acquisition was aimed at improving the placement of PR in the Northern European countries and in North America. Indeed, the most well-known brand owned by V&S is the famous vodka brand Absolut which is a bestselling beverage in the US (5 million boxes sold in 2007).
It is of primary importance for any company which plans to enter a foreign market, to make an estimation of that market and to understand the trends and tendencies of the international environment it plans to operate in. Every fact and data can help in a different way to forecast challenges and difficulties, to find out opportunities in the market and to form a relevant strategy. There are different levels and numerous environmental factors for a company but here we would be focusing on so called foreign elements such as demographic, economic, technological, cultural, institutional factors as our work is devoted to Pernod-Ricard and in particular to its entry to the US market. In this part, we are going to be discussing various elements of the international environment in the US.
[...] Kahlua ; a typical example of the strategy of Pernod Ricard Created in 1936, Kahlua is a well known Mexican coffee-flavoured liquor. The brand was owned by Allied Domecq and was sold especially in Mexico, the US and Canada until it was partially acquired in 2005 by Pernod-Ricard which has been growing stronger in the Northern American region till date. The group used the notoriety of this brand to get into this huge market and sell all its beverages through the new network. [...]
[...] More than 55% of the sales are generated outside Europe. PR is the leader in Europe and in Asia-Pacific. The company is implanted in: France, Russia, Ireland, Spain, Italy, Greece, Japan, China, India, US, Canada, Brazil, Argentine . Habits Companies in this industry have to be careful with: - Attitudes, values and behaviors related to using alcohol - Cultural definitions of alcohol - Interaction with other factors and influences (age, gender, social class, sexual orientation, degree of acculturation, etc.) Alcohol consumption depends on various factors such as the social rules, norms, and traditions acquired through an individual's cultural and ethnic contextual experience. [...]
[...] Age: The results of several surveys performed on different age groups in the US showed that the elder people, who are defined as older than 65, consume less alcohol than the younger ones. About 49% of American college students don't drink alcohol on a regular basis consume five or fewer drinks per week, and only 12% consume ten or more drinks per week. II. Analysis of alcoholic beverage consumers and the OLI-Model 1. General data about the alcoholic beverage consumers Pernod-Ricard is the world's co-leader in wines and spirits group. The distribution networks of Pernod-Ricard are on every continent, showing a strong international presence. [...]
[...] Five competitive forces This diagram summarizes the forces of Porter . Rivalry among competitors The wine and spirit industry is concentrated, Pernod Ricard is the world number two company on this market, right after Diageo. So rivalry is not so high. The market is in growth, especially in United States of America which is the biggest market in size and value with gains of by value this year. Entry barriers In the wine and spirit market, there are strong entry barriers. [...]
[...] Among the subsidiaries of distribution, we can find: - Pernod Ricard Europe: outside France, with a subsidiary in Ireland (an Irish distillers company) and one in Poland with Wyborowa. This region shows the most important turnover. - Pernod Ricard Americas: Gathers the Northern America, Central America and Southern African markets. It represented 28% of the turnover in 2006 - Pernod Ricard Asia - Pernod Ricard Pacific : Regroups Australia and New-Zealand With the acquisition of Absolut in 2008, the company reinforced its place in the USA. [...]
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