Carlsberg in India: entry strategy in global oligopolistic industries

Global oligopolistic competition and foreign direct investment

“…Here we are in agreement with several IB scholars who have argued that there is a pertinent need for IB to revisit the early industry-level theories of MNC strategy and to reevaluate their original propositions in the context of globalization (see e.g. Gimeno et al, 2005;Graham, 2003;Ito & Rose, 2002;Nielsen, 2005 (Hoenen & Hansen, 2013), telecommunications (Nolan et al, 2008), and agricultural seeds (Howard, 2009). In the emerging Internet-based industries, global concentrations appear to be extraordinarily high, as evidenced by the market positions held by companies such as Google, Facebook, Amazon, Apple and LinkedIn.…”

“…First-mover dynamics in FDI have been observed in many industries, including the brewing industry (Jacobsen, 2008;Hoenen & Hansen, 2013), the telecom industry (Ramamurti, 2000), and the tire industry (Ito & Rose, 2002). UNCTAD (2000) in a study of FDI in M&As found that first-mover dynamics are often associated with M&As because pre-emptive acquisitions or mergers quickly and decisively dry out the pool of suitable targets and raise entry barriers for competitors.…”

“…Classical examples of multimarket strategic interaction include the global rivalries between Procter & Gamble and Unilever, Airbus and Boeing, and between Coca Cola and PepsiCo. However, nowhere is the multimarket strategic interaction in FDI more evident than in the global brewing industry where the top players over the last decade have embarked on epic M&As in every corner of the world in order to acquire global dominance (Hansen & Hoenen, 2013).…”

“…As acquisition targets have become fewer in this industry, competitive focus has moved toward gaining downstream control so that lead firm increasingly focus on the control of distribution channels and outlets rather than production capacity to fence off competitors. And while lead breweries have typically interacted through aggressive moves towards competitors, we have recently seen how coordination complements competition, for instance, when the otherwise fierce competitors Carlsberg and Heineken, teamed up in 2007 to devour Scottish Newcastle (Hoenen & Hansen, 2013).…”

“…By 2010, more than 50 industries displayed high levels of global concentration, where high concentration is defined as more than 50 per cent of the market being controlled by the top four players (Carr and Collis, 2011). Global concentration is evident in a variety of industries, including airlines (Ramón-Rodríguez et al , 2011), wind turbines (Lema et al , 2011), automobiles (Van Biesebroeck and Hashmi, 2007), steel (Giarratani et al , 2013), electronics (Sturgeon and Kawakami, 2010), beer (Hoenen and Hansen, 2013), telecommunications (Nolan et al , 2008) and agricultural seeds (Howard, 2009). In the emerging internet-based industries, global concentrations appear to be extraordinarily high, as evidenced by the market positions held by companies such as Google, Facebook, Amazon, Apple and LinkedIn.…”