Question 1
MABA is an acronym for Market Attractiveness, Business Assessment. The elements of Market Attractiveness include the total volume and volume growth in hectoliters of the international premium larger segment, the geographic and cultural distance between the market and the company’s home base in Netherlands.
The four elements that Grolsch use to measure distance are; differences in languages, non-membership vs. membership of the European Union, and the landed costs of transportation as well as the differences in Gross Domestic Product (GDP) per capita. MABA framework utilizes the four components in making key decisions that communicate whether a market is a key market or not. Basically a market is considered key when the landed transportation costs are low. This is because low transportation costs means that there is a large profit allowance margin for the company and this makes it a favorable factor. Countries that are members of the European Union form key markets to the market (Kates & Galbraith, 2013). The higher the gross domestic product per capita of a country the more valuable the country is in terms of market to the company. This is because; high per capita implies higher purchasing power of the households, institutions, businesses or individuals in that particular country.
The Business Assessment involve the total volume and volume growth of the company’s premium larger, this is used to assess the growth in terms of volume – the higher the volume growth the more attractive the market is, the variable commercial contribution or else the contribution margin less the direct expenses that are associated with serving the specific market as well as the company’s share of the premium lager segment. I think they should continue using the MABA framework although I also have some more elements that I think should be added to the framework. These elements lie more in the market attractiveness of the market. I have discussed the extra elements below.
Other elements I would include to the Framework
Other elements that I would add to the framework include; the prevailing political conditions of a country, cultural practices in the country, legal frameworks in the country as well as the competition in the specific country. The prevailing condition in the country tells a lot especially on how the company will be able to run its daily activities without distractions. When a country registers high marks in terms of prevailing political peace then it can be added on the list of key markets (Sparrow, 2009). On the other hand when a country is frequently known for political wars and wrangles it means that it is not suitable to invest in and therefore it cannot be counted as a key market. The other element is the competition in the country. Where a country shows the presence other large companies that are offering equally brands that are equally good to those of Grolsch the market ceases to be a key market, but where there is absence of other companies or when those that exist in the specific country are offering weak quality then the company can make an entry in such a country and aim at making the country a key market. Cultural practices of a specific country are also an important element to add into the framework. There are countries that are too much into beer consumption. Groslch should make an effort to identify such countries and make large investments in such countries because they will constitute key markets. On the other hand, Groslch should also identify the countries that are against beer consumption because this means that beer sales will remain low and as a result they may end up being cost centers instead of being key markets. The legal structures are also key components that should be included in the framework (Sparrow, 2009). These constitute issues to do with the taxation laws. Grolsch can consider a market as key when the legal structures favor the growth of the company in terms of profits and so on. Where a country has instituted too high tax rates, the company should not consider making it a target market because this means that much of its income will go into operational costs (International Conference on Digital Enterprise Design and Management & In Benghozi, 2014).
Question 2
Grolsch positioning in the potential markets
Grolsch is in fact well positioned in the some markets. Grolsch is well established in Netherlands, the United Kingdom and it is also its third largest market is in the United States. France is the fourth largest market to the company. However, I find Grolsch not well positioned in the markets with the greatest potential which are Europe and Latin America following the merger between Interbrew and Ambev in 2004 (Sparrow, 2009). It is also not well positioned in Africa and North America where other companies have heavily invested and taken control of the markets. The fact here is that Grolsch has not yet made its takeover in the other potential markets. This is especially noting the fact that despite its high quality rating it registered lower sales as compared to the brands. This simply indicates that Grolsch is not well positioned in potential key markets.
Question 3
Grolsch organizational structure
Grolsch closely resembles an International organizational structure. Their main product is the Grolsch larger which propels the companys main flagship. Grolsch lager as a product is found in various markets in the international market; however the countries that offer Grolsch lager as their product must comply with the German purity laws. The emphasis to adherence to the German purity laws reflects a close supervisory role and dictation by the mother company. International markets that wish or those that venture into the Groslch product must adhere to the one recipe provided by the mother or founding company of the Groslch brand. For instance the Grolsch lager must be aged for a minimum of six weeks no matter where it’s being brewed. International organization applies close supervision of the various markets. It is also an international organization feature to dictate or emphasis on strict adherence to the original formula or recipe even when the same product is produced elsewhere. It is therefore clear that it is a matter of policy that all the companies in the international market that have ventured into the Grolsch brand are closely monitored by the Grolsch brand headquarters i.e. the mother or founding company. There are transfers knowledge/skills/products e.g. the recipe from domestic HQ but adapted in minor ways by local country. All these are characteristics of an international organization and therefore Grolsch is categorically an international organization.
References
International Conference on Digital Enterprise Design and Management, & In Benghozi, P.-J. (2014). Digital enterprise design & management: Proceedings of the second International Conference on Digital Enterprise Design and Management DED & M 2014.
Kates, A., & Galbraith, J. R. (2013). Designing your organization: Using the star model to solve 5 critical design challenges. San Francisco, Calif: Jossey-Bass.
Sparrow, P. (2009). Handbook of International Human Resource Management: Integrating People, Process, and Context. Chichester: John Wiley & Sons.
