Essay on "Strategic Plan for Bacardi Limited"

Essay 13 pages (3646 words) Sources: 1+

[EXCERPT] . . . .

Barcardi

A Strategic Overview of Bacardi Limited

The discussion here below offers a general overview, some brief historical details and a company profile for Bacardi Limited, which is one of the largest spirituous beverage companies in the world. Following an examination of the company's basic mandate, the discussion will provide a brief internal analysis concerning its immediate organizational and industry-wide outlook. Finally, the discussion will produce an assessment of Bacardi's strategic options and a recommendation for a strategy in going forward. The recommendation will be driven by the principle of brand alliance, and would be implemented based on the organic success of Bacardi and Coca-Cola as associated brands.

Introduction:

Bacardi Limited is a company with a remarkable history and a present-day success that both mark it as one of the most successful and prominent companies purveying spirituous beverages in a global market context. Over the course of its 150-year history, Bacardi has involved itself in the political affairs of its nation of origin, has taken an active role in global economic affairs, has achieved a particular place of notoriety for the unique architecture of the buildings housing its various operations and has established its brand image and product lines as highly recognizable and well-liked. Indeed, Bacardi is a premier company both in the spirits industry and in broader scope as a global company with considerable revenue, influence and market penetration. The research below is designed to produce a comprehensive overview and assessment of the Bacardi company with the intention of better understanding the strengths and weaknesses defining its outlook; with a consideration of the particulars to its operation that have helped it to succeed; and with an assessment of the opportunities that might help to take the company forward. The discussion conducted hereafter should serve as a thorough introduction to Bacardi and the various conditions which define the company in present day and into the future.

Company Overview:

Bacardi Limited is most prominently recognized as a producer of rums. However, the umbrella corporation also offers a full array of middle-shelf spirits, many of which are highly popular within their respective categories. Its Bombay Sapphire gin, Grey Goose vodka and Dewar's Blended Scotch whiskey are big sellers in the United States, the United Kingdom, France, Spain, Mexico, Germany, Italy and Russia. (Barcardi & Company Ltd., 1) Founded in the city of Santiago de Cuba in 1862, the Cuban-based spirits company is among the biggest and most successful in the world. Indeed, its spiced rums are the most prolific sales performers in the rum category in contexts such as the U.S. And U.K.

According to Yahoo! Finance (2010), the company sells roughly 200 million bottles a year around the world. Today, its operations are based in the Bahamas, though its roots and its cultural reputation are formed through its association to Cuba. This is an issue which will draw considerable discussion in our research, denoting as it does both the imperative to retain a desired brand image which extends from its national origins and the international pressures and complexities which are predicated by its involvement with an embattled and politically isolated nation.

Other area of consideration are the considerable degree of acquisition and expansion that has marked recent years for Bacardi and the potential transition into a strategy of brand alliance with the Coca-Cola beverage company, with which it shares demographic interests.

Mandate:

Mission:

Bacardi's Mission is centered on its products, its corporate growth and its corporate responsibility. According to is informational website, "at Bacardi we are committed to producing the best premium spirits in the world and delivering superior marketplace and financial results." (Bacardi & Company Ltd., 1) This denotes essential mission goals such as the assurance of quality and the maintenance of profitability.

Core Values:

Bacardi lists its core values as being defined by the general principles of corporate citizenship. This includes reference to the importance of environmental sustainability, the preservation of labor rights, the maintenance of safe and pleasant facilities and an active role in the prevention of underage drinking or abuse of alcohol.

Stakeholder Analysis:

Bacardi is a family-owned company. Indeed, today its Chairman is Ruben Rodriguez, who is the first non-family member to hold the top office in the company. This marks it as the largest privately owned spirits company in the world. Therefore, its primary stakeholders are the owners and personnel of the company. They have the greatest vested interest in its continuing success and the capacity to make key decisions effecting that success.

Additionally, this denotes that the roughly 6000 individuals employed by Bacardi are key stakeholders as well, who will be impacted by decisions made at many levels of the organization.

Bacardi also identifies its different publics as key stakeholders, making the case that "Bacardi is the markets we serve. Bacardi Limited, through its affiliates, has operations around the world, cemented by the enduring quality of our products and the reputation we have worked so hard to earn and maintain. We respond to the changing needs of individual markets in each one of those countries." (Bacardi & Company Ltd., 1)

Internal Analysis:

Bacardi's weaknesses are few, but are largely viewed as historical in nature. Its association to Cuba has frequently caused Bacardi confrontations with the Cuban government and with the international community. As our research has shown, the inextricable link between Bacardi and the path of Cuban history denotes that the company, now based in the Bahamas due to its political alienation over the regime of Fidel Castro, is one of its ongoing public image impediments. Accordingly, Robinson (2008) reports that during the revolution of Fidel Castro and Che Guevera, Bacardi took part on both sides of the conflict. First as a supporter of the progressive aims of Castro and eventually as a harsh critic of its determination to partner with the Soviet Union, Bacardi "funded counter-revolutionary attacks on Cuba and donated generously to exile organizations that have opposed Castro for the past half-century. In addition, the company has gone to great lengths in recent years to lobby for a tightened U.S. embargo and to fight the French liquor company Pernod's effort to market Cuba's Havana Club rum, a legal duel with Castro that the Bacardis viewed as a crusade to defend another expropriated Cuban brand." (Robinson, 1)

Here, we can see that the decision historically to involve itself in these prickly and sensitive political matters has resulted in an economic confrontation as well. Though its dominance in the rum industry is singular, its cultural and image-based association to Cuban history is now being subsumed by Havana Club due to its more amenable political position. This has also caused protracted legal battles with the state of Cuba as a whole. Most prominently, Bacardi's active involvement in the drafting of laws continuing to intensify the global isolation of Cuba at the hands of the United States would take the concrete form of 1996's Helms-Burton Act. This would be designed to penalize private companies for working in Cuba -- a method of sanctions aiming at stimulating economic misery and a resultant popular revolt -- and was composed with significant input from the Bacardi company. According to the Oracle Education Foundation (OEF), "the law has drawn international criticism for a provision allowing U.S. companies to sue foreign companies that work with the Cuban government. This is justified because the U.S. says they are using "stolen" U.S. property. In order to be able to sue, you had to have lost $50,000 or more to the Revolution. In 1959, this was a very large amount of money, so the bill was mainly intended to benefit wealthy Americans. Lawyers for the Bacardi corporation wrote much of the law; the bill has come to be known as the 'Bacardi Law' by opponents." (OEF, 1) The degree of political tension and negative publicity which has been heaped upon Bacardi for its involvement in an act of economic sanctioning -- which carries significant human rights questions -- should be seen as the primary weakness for a company with a high level of positive brand imaging.

With respect to its strengths, Bacardi's emphasis on the responsible marketing of its products denotes a clear position on preventing underage drinking or the reckless consumption of alcohol. According to Bacardi's own informational website, "encouraging responsible decision-making regarding drinking, or not drinking, is a strong business principle for Bacardi when promoting our premium quality brands. Around the world, we support, and are an integral part of, trade and social organizations that combat the problems of alcohol abuse and misuse." (Bacardi & Company Ltd., 1)

This is an important role for Bacardi to serve in the communities where it operates, primarily because it is so prominent and widespread in its influence. The visibility of the product image and the variety of spirit categories in which Bacardi competes denotes that there is a need for a positive community role. Bacardi's personnel consider its strong stance on preventing underage drinking or irresponsible consumption of its products to be a crucial element… READ MORE

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