Absolute Vodka: Defending A1.0-Executive Summary V&S Group, a Swedish Company Owned by the Government Created V&S Spirits to Produce Market and Sell Absolut Vodka Which Is the Companya??????S Strongest Brand (Created in Assignment

Absolute Vodka: Defending A1.0-Executive Summary V&S Group, a Swedish Company Owned by the Government Created V&S Spirits to Produce Market and Sell Absolut Vodka Which Is the Companya??????S Strongest Brand (Created in Assignment Words: 4947

Absolute Vodka: Defending a1. 0-Executive Summary V&S group, a Swedish company owned by the government created V&S Spirits to produce market and sell Absolut Vodka which is the companya??????s strongest brand (created in 1979). To maximise the branda??????s market share and strengthen its competitive position, the company established a jointed venture called Future Brands LLC to distribute its products more effectively strictly in the USA, which is Absoluta??????s strongest market. Although the brand is the second largest premium vodka, its market share is threatened by the constant growth of the market leader Smirnoff.

Therefore, V&S Spirits need to take further measures to ensure its branda??????s image and market share is protected and advanced. V&Sa??????s strategic step of establishment Future Brands LLC in the USA yielded several advantages and disadvantages. On the one hand, main advantages are avoiding profit margins from intermediaries, maximization of sales, having more control over the value chain, and obtaining better market feedback. On the other hand, disadvantages are concluded to be potential drop in profits at the beginning, risking technology flow, having a high level of commitment, and suffering cultural differences.

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The market position in major markets for Absolut Vodka was identified and marketing strategies were proposed. In the US, the branda??????s position was classified as a???? a??????Challengera??????a?????? and a strategy of product differentiation of luxurious products was proposed. In Eastern Europe, the position is classified as a???? a??????Followera??????a?????? while a Flanking attack strategy and intensive advertising were proposed to break customer loyalty to domestic brands. In Australia, Africa and the Middle East, the brand was classified as a a???? a??????Followera??????a?????? and a Focused strategy on FABs was proposed.

Finally, in Asia Specific, the brand was identified as a a???? a??????Challengera??????a?????? and a differentiation/Focused strategy was proposed. In terms the branding strategies employed by both organizations, and on the one hand, Smirnoff standardizes a???? Globalizationa?????? as a genuine heritage of Russian Vodka and a???? Brand Optimizationa?????? as their means of building and communicating Brand Value. On the other hand, Absolut Vodka use a???? Global Platform Local Adaptationa?????? by adapting the iconic Bottle with a particular Historical Landmark, culture etc.. The effect of Country of origin of these 2 brands is missing! . 0-Introduction In the turbulent environment we are facing nowadays, organizations need to constantly search for ways to innovate and to meet the changing customer demands in order to maintain or strengthen the position of their products. Absolut Vodka, one of the most popular super-premium brands in the world, is the strongest brand for V&S Spirits. Further, the company seeks to maximize its branda??????s market share through constant innovation and adopting new marketing/distribution strategies. This report will provide further insight on Absolut Vodkaa??????s position by addressing five points.

First, the acquisition of Future Brands LLC which was considered to be a strategic step will be tackled and its advantages and disadvantages will be elaborated on through relating it to existing literature. Subsequently, Absolut Vodkaa??????s international marketing strategies will be assessed and alternative strategies will be proposed in different regions to increase the branda??????s market share. As will follow, research conducted on two major vodka markets will be illustrated, based on which one of them will be proposed as a strong target for V&S Spirits to invest marketing resources in.

Finally, marketing strategies for Absolut Vodka and Smirnoff will be contrasted, including the degree to which each brand is associated with the heritage of its country of origin. 3. 0-Background V&S Spirits, a subdivision of the Swedish government-owned company called V&S group, is responsible for the marketing, production, and distribution of the organizationa??????s strongest brand, Absolut Vodka. The brand, according to sources illustrated later in the report, is the third largest international premium spirit and is the second largest premium vodka following the market leader Smirnoff.

Since its launching in 1979, the brand has continued to achieve enormous success with a steady increase in sales volume and is now being sold in 126 markets nationwide, with North America being its top market. In the year of 2001 and in an attempt to be more aggressive in terms of increasing the branda??????s market share, V&S Spirits formed a joint venture with Beam Global Spirits called Future Brands LLC to distribute Absolut Vodka strictly in the USA which is by far considered the brands strongest market.

Additionally, the company acquired shares in Maxxium Worldwide which became the distributor of Absolut Vodka in 60 other major markets around the world. Although Absolut Vodka retains a strong position in its market segment, the brand is faced by the constant and threatening growth of Smirnoff, its biggest competitor and the worlda??????s market leader. Furthermore, Absoluta??????s position in its biggest market, the USA has reached saturation and has low brand awareness in major markets like Eastern Europe (which is a strong consumer of vodka) compared to Smirnoff.

Therefore, further analysis and action need to be taken by V&S either to preserve or to increase its strongest branda??????s market share 4. 0-Advantage/Disadvantages of joint venture: The decision of V&S to form a joint venture with Jim Beam brands and establish its own distribution company in 2001 seems to have yielded significant positive results, according to information obtained from the case and the company’s annual report. As mentioned in the report, total sales starting from 2002 until 2006 have increased steadily.

Moreover, the CEO of V announced that the year 2006 marks the first period of time in which sales all over the world exceeded sales in the USA, which indicates that since the establishment of Future Brands, sales in the USA have represented the majority of Absolut vodka’s sales (more than 50%) until 2006. While the establishment of Future Brands LLC in the USA represented a major milestone for V&S Spirits and contributed strongly to the organizationa??????s current position, it is crucial to point out that the step can be viewed as a significant shift in its distribution policy in the country.

As stated by Koch (2001), if maximisation of market share appears to depend on the development of own distribution and after sales network, the company may prefer a majority/owned subsidiary to be the entry mode into a certain foreign country. Although Future Brands LLC is not mainly owned by V&S who only own 50%, the authora??????s statement offers significant indications related to the case. Further, it reveals that the establishment of a wholly owned or a partially owned subsidiary (JV) for distribution can have significant implications on the market share of a companya??????s products rather than direct or indirect exporting.

In that context, the advantages of V&S Spirita??????s having a JV in the USA were further investigated while examining relevant literature. Further, the following main advantages were concluded: 1) Avoiding higher profit margins from intermediaries: Absolut Spirits, according to the case, is distributed to restaurants, hotels, bars and some convenient stores (based on the US-State the stores are in), which implies that it falls under the category of intensive distribution.

Mallen (1996) contends that in the case of intensive distribution where the product goes through several channels to reach end customers, higher unit margins must be available for middlemen (intermediary channels). This, according to Mallen, would force the manufacturers either to bring the price down to their intermediaries or risk having their product reaching the market with uncompetitive high prices. In our case, it is apparent that the exclusion of Seagram would eliminate a significant channel in V&S value chain, therefore avoiding the risk of Seagram raising their profit margins.

Although this element of the value chain was not completely eliminated but rather replaced by Future Brands, the JV would be more considerable to V&Sa??????s costs and would keep its profits to go inline with and complement V&Sa??????s profit ambitions (therefore maximising its V&Sa??????s profits). 2) Maximisation of Sales: Mallen (1996) mentions that a manufacturing firm might be better off relying on its own sales force who would probably be more motivated about the brand.

Moreover, replying on a main distributor might put the manufacturera??????s brand in a position to compete with other brands that the main distributor is in charge of in a certain territory. In our case, having a motivated sales force of Future Brands, which is partially owned by V&S, would strengthen the brand in the market. This is due to the fact that Future Brands would be much more committed to distributing the product successfully and pushing it through the value chain effectively since the organization is more loyal to V&S brands that Seagram would be. ) Enabling more Control over the Value Chain: As mentioned in (www. futurebrandsllc. com, 2008), the JV develops, drives, and programs its distributor partners by offering them education and training programs and market tools. In that context, Mallen (1996) confirms that counselling and training of middlemen would help manufacturers be more in control of the Value chain by being able to penetrate their distributorsa?????? organizations and ensure the manufacturera??????s sales, advertising, and promotion policies are being carried out effectively.

In the case of V&S, such commitment to training partnering distributors and exercising control over them would not be possible without the establishment of a wholly or partially owned subsidiary such as Future Brands to manage its distributor partners effectively. 4) Obtain better market feedback: In terms of Market feedback, Mallen (1996) mentions that better distribution control can facilitate the provision of more effective market feedback since middlemen maybe able to provide the manufacturer with market information which might otherwise not be available to them.

Future Brands, in that sense, retains strong control over its distributor partners, therefore gaining better access to market feedback through them. It is apparent from the above that the formation of Future Brands as a JV to manage the distribution of Absolut Vodka has advanced the branda??????s position in the enormous market of the USA. However the following potential disadvantages can stand in the way: 1) Potential Drop in profits at the beginning: Koch (2001) mentions that investing in a subsidiary in a foreign market could be costly and lead to a drop in profits in early years before yielding positive results in the long run.

Therefore, as Koch asserts, the firm needs to ensure that the market is sustainable over a number of years and must provide ongoing financial support to the JV. However, through the steady increase in sales since establishing Future Brands, V&S seems to have overcome this barrier of increasing costs. 2) Technology Risk: Osland, Taylor, and Zou (2001) claim that a JV can entail a risk of technology or knowledge transfer between partners. This implies that in the case of Absolut vodka, vital information about the brand or its technical know-how could be utilized unfairly by the partner.

Moreover, this could compromise the position of the brand in the long run. 3) High level of commitment: As mentioned in (www. marketnewzealand. com, 2008), it would be harder for the firm to adjust and pull out of the market in case of any risks or instabilities in the market. Although the market share of Absolut Vodka is significant and flourishing in the USA, V&S should account for instabilities which could hinder the organizationa??????s position, especially given that it would be difficult to pull out with the new distribution strategy. ) Cultural Differences between partners: Since the owners of Future Brands come from different cultural backgrounds (Swedish/American), a potential difficulty could exist between the partners in terms of communication. Again, this does not seem to be apparent in our case due to the continuing success of Future Brands. However, V&S should not rule out the significant negative influence this difference could have if not managed correctly. 5. 0 Market Analysis 5. Industry Lifecycle analyse Arthur A. Thompson Jr. (2005) points out that industries go through a life cycle of takeoff, rapid growth, early maturity, market saturation, and stagnation or decline. The graph below shows that the Vodka industry meets all the five criteria of the Growth Stage, and therefore lies within that category. In that context, the Buyersa?????? number is increasing world wide, product quality is improving and products diversity has also reach a higher level.

Moreover, the Vodka market is experiencing the entry of more competitors, which compels other companies to lower their profit margins. Yet, achieving high profits is common as organizations utilize the concept of economies of scale. 5. 2-Portera??????s Five Forces Analysis Portera??????s Five Forces Analysis developed by Michael E. Porter (Porter 1979) is a useful technique for industry analysis and business strategy making. The five forces determine the intensity of the competition within an industry and are crucial in directing the strategies of organizations.

Therefore, it is crucial to analyze each force individually in terms of the Vodka market. a???? Bargaining power of Suppliers In this industry, the bargaining power of suppliers is low since the main ingredients and materials such as sugar, potatoes, fruits, vegetables and agricultural products are easy to gain. a???? Competitive Rivalry The vodka market is fairly an attractive one with high profit margins which manufacturers are increasingly eager to enter, which implies that there exists high levels of competition.

For instance, in 1994, when V&S terminated its partnership with Carillon Importers and switched to Seagram Co for Absolut Vodkaa??????s distribution in the US, Carillon hit back by taking a Russian competitor (Stolichnaya) into the market (Hollensen, 2007). a???? Threat of New Entrants Nowadays, more and more companies are trying to enter the Vodka market to earn high profits. In the case of Absolut Vodka, the brand dominated 80% of the Indian market for a while until Russian companiesa?????? penetrated the market and gradually accomplished more market shares.

This situation also happens in other eastern European countries. Thus, the threat of new entrants is quite high. a???? Threat of Substitute The threat of substitutes in the vodka market is high since alcoholic drinks include a wide range of potential substitutes such as liquor and whisky. In the last few years in Europe, the so called a???? Potato Vodkaa???? which is made of potato and other cheap agricultural produce spread over the market. Further, this resulted in the loss of millions of pounds in Vodka sales (BBC News 2007) a????

Bargaining power of Buyers The bargaining power of buyers is considered high since there are so many different brands in the market and customers have lots of options to choose from. Besides, the switch cost from one brand to the other is quiet low for customers who continue to have unpredictable interests and tastes. 5. 3-Absolute Vodka SWOT Analysis SWOT Analysis is a strategic planning tool for evaluating a companya??????s resource capabilities and deficiencies, its market opportunities, and the external threats to its future well-belling (John E. Gamble, 2005).

The purpose of implementing this analysis is to provide more details about Absolut Vodkaa??????s Strengths, Weakness, Opportunities and Threats, which will help this company to tackle problems and to convert its disadvantages to advantages. Strengths a???? Good business performance a???? Expertise in integrating technologies and extending its productsa?????? lines. a???? Effective know-how in operating a cost-efficient supply chain a???? High capability to explore new generation products to markets a???? High expertise in creating distinctive advertising a???? Adapting to different cultures in different countries to communicate with global consumers. ???? Consistently collaboration with famous fashion designers & artists Weakness a???? Absolut Vodka do not have a strong link between the product and superior quality and purity of premium vodka a???? Since Absolut does not come from a country that has vodka-producing tradition, e. g. Russia, it cannot emphasize advertising and genuine heritage like that of premium Russian vodka. Opportunities a???? Attract increasing number of FABa??????s drinkers a???? Appeal to young people and capture a new generation through modern lifestyle concept and night-spot activities a????

Using Absolut Website to pursue a mega trend of using internet as a main communication channel a???? Emphasize emotional connection and interactive function with consumer through Absolut Website Threats a???? Consumersa?????? taste changes very fast a???? Consumers are attracted to products that reflect mordent lifestyle, good image and in the main stream fashion a???? More competitive vodka products are being introduced in the global market. 5. 4-Alternative Marketing Strategies for Different Markets Base on market share status, Absolut Vodka is classified as a challenger in the US, Europe (excl. ast Europe), and Asia Pacific market, while it is a follower in East Europe, Australia, Africa and the Middle East markets. In the US, people love luxury products, and tend to be more attracted to healthy drinks. Therefore, Absolut Vodka should consider taking differentiation strategies for luxurious products and focus strategies for health products. In the Europe Market (excl. East Europe ) where customers prefer high quality products, Absolut should take flank and differentiation strategies to target those areas that its rivals neglect.

Similarly, for the Asia Pacific market where consumers like premium products and have healthy drinking habits, Absolut Vodka should take focused and differentiation strategies toward FABa??????s drinks. Concerning East Europe, Absolut Vodka should consider choosing Flank Attack strategies and should focus on the premium market. Moreover, intensive adverting is necessary with the aim of gaining brand recognition. Concerning Australia and Africa, FABa??????s are becoming more popular and V&S Spirits should go for Focused Strategies while retaining awareness of consumer behaviour changes.

For example, in Australia consumers fancy healthy diet and luxurious ready to drink FABa??????s products. However, in Africa and Middle East, consumers are more likely to choose standard priced FABa??????s and Ready to drink products. To sum up, the Vodka industry is in the growth stage in its industry lifecycle. The environment is very competitive with threats from new entrants being high. Further, buyers bargaining power and the threat of substitutes are high, while the suppliers bargaining power is low. 6. – Market selection for expansion According to Hollensen (2007), Russia has the highest consumption of Vodka with 80% of their entire volume sales in the world. Therefore, it could be considered a very attractive market for Spirits Companies to allocate more marketing resources in order to gain a bigger market share. Several factors were considered as follows to investigate further whether Russia would be the best choice: 1- Consumer behaviour: As shown in the table below, the companies with the highest market share in the Eastern European market are originally either local or Russian.

Further, this gives an indicator of the consumersa?????? trend towards buying a domestic brand since none of the companies listed in the table is international. 2- Competition: The vodka market in Russia is considered very competitive, since the market is dominated by local brands, and the taxes on imported goods discourage international brands from entering the market (Euromonitor International, Aug 2006). 3- Market conditions: referring to the industry life cycle for vodka in the Russian market, the market is shown to have almost reached saturation point (.

In conclusion, the Russian market with its fierce competition and conservative consumer behaviour towards international vodka brands makes it difficult for Absolut vodka to enter and achieve sustainable growth and success. Referring to Hollensen (2007), Asia-Pacifica??????s share in the consumption volume of vodka is considerably low with 0. 4%. However, and after more research was done, China was discovered to be the country with second highest consumption of spirits in the world (http://kristinnicely. com/cs. html, 2007).

Further, and while taking into account that China has the largest population in the world, the prospect of investing in China was assumed to be practical and therefore a decision was made to investigate the Chinese market further to validate this assumption. Analysis of the Chinese market comprised investigating the following 4 factors: PESTLE analysis, consumer behaviour analysis, marketing potential and Competition analysis. PESTLE Analysis: Economic a???? transition period from centralized planned economy to decentralized economy a???? ncreasing income a???? increasing growth rate of the economy Political a???? Stable government and improved governmental policies a???? Increasing Political and Economic Reforms Social/Cultural a???? Country with largest Population a???? A variety in minority groups a???? Divided into many regional centres across the nation a???? Different Regions have different culture, different values and tradition Legal a???? No limitations on Advertisement a???? Reduction of Tariffs and taxes a???? No legal drinking age Technological a????

Delta-Ta??????s technology for highest purity alcohol Table 1, Source: Yang and Lee (2002) Based on the information above, it is apparent that conditions in each of the PESTLE segments such as the improved economy, improved governmental policies, big population and variety of cultures, reduced tariffs, and advanced technology for purity of alcohol all support the success of an international brand like Absolut Vodka. Market size: Chinaa??????s population continuously increased from 1,276,270,000 in 2002 to 1,315,302,000 in 2007, while the population aged 15 and above rose from 988,807,000 in 2002 to 1,084,752,000 in 2007.

In addition, the scope of the market is huge, with China being the number one market in the world in terms of Alcohol volume sales (Euromonitor International, 2008) and as mentioned earlier, is the second largest spirits market in the world (http://kristinnicely. com/cs. html, 2007). Moreover, the market size is expected to grow by a conservative 51% in constant value terms after 2009 (Euromonitor International, 2008) Consumer behaviour: The increasing disposable income and health awareness for Chinese people is shifting them towards healthier and better-quality drinks.

In addition, consumers tend to favour higher priced imported products with better quality instead of spending less on lower quality local products, which implies that foreign spirits are becoming increasingly popular (Euromonitor, 2008). Market potential: The GDP for China shows an increasing trend between 2003 and 2007, while rising from 10% to 11. 4%. In terms of volume growth, from year 2004 to 2009, spirits off- trade and on- trade volume consumption is expected to grow by 5. 6%, while Flavored Alcohol Beverages (FAB) will grow by 47. 2% (Euromonitor, 2007). In addition, there is a 55. % constant value growth for spirits and a 51. 1% growth for the FABs market which gives an indicator to the growing consumer demand in the market and therefore the higher potential for success. Furthermore, and when China entered the WTO in 2001, international spirits represented less than 1% of the entire Chinese Spritis. However, the government since then has gradually removed international trade restrictions and therefore the possibility to compete with domestic products has become more feasible by 2007 (http://www. ftchinese. com/sc/story_english. jsp? id=001011767, 2008).

The analysis indicates that China has a bigger market, a bigger trend towards healthier drinking habits, less restrictions of international trade, and a stable political environment. In conclusion, analysis of Chinaa??????s PESTLE, consumer behavior, market size and market potential all imply that it is a better market for V&S to invest more resources to gain more market share. 7. 0 International Branding Strategy of Absolut Vodka against Smirnoff This section aims to analyze the international branding strategy for Absolut Vodka in contrast with that of its main competitor, Smirnoff.

To serve the purpose, the following framework extracted from (De Mooji, 1998) and (Bradley, 2005) was employed. 7. 1-Smirnoff 7. 1. 1-Line Extension Strategy: Smirnoff launched Smirnoff Norsk and Smirnoff Penka from the vodka line in Great Britain while launching Smirnoff Twisted V line in Nordic countries for the ready-to-drink category (www. kristinnicely. com, 2007). 7. 1. 2-Brand Popularity: Smirnoff, a Russian brand has been regarded as a highly recommended brand in the category of Spirits. In 1960s, Smirnoff created a strong association with the film industry.

Smirnoff was featured in the first James Bond film and became the ultimate choice for James Bond Martini. In 1970s, this advertisement created the personality of the Smirnoff drinker as relaxed, rebellious and mysterious (Insead, 2002:16). 7. 1. 3-Building and Communicating Brand Values: Smirnoff identified a???? Globalizationa?????? as its communication strategy to build up their brand value. Smirnoff is optimizing its brand value by advancing the Smirnoff ready-to-drink image to a premium, luxury drink. The organization is also emphasizing its core brand value as purity and authenticity of Russian vodka (Insead, 2002:16).

The aim of Smirnoff was to incite consumers to move away from other a???? faddish vodkasa???? to brands with genuine heritage of Russian recipe (Insead, 2002:16). 7. 2-Absolut Vodka 7. 2 1-Line extension strategy: Absolut introduced new Flavored Alcohol Beverages (FABs) and ready to drink beverages in order to attract the young generation and to capture the whole market unlike Smirnoff which had focused much less on this market segment by producing less FABs. 7. 2. 2 Maximizing Brand popularity: Absolut considered two distinctive characteristics that created brand awareness in advertisement i. e. he name of the product and its crystal clear tubby bottle without label (Humnabaakar, Des, Mellon, Mather, Vogel, 2003). All their advertisements revolved around the same theme: a picture of the iconic Absolut bottle with two or three words starting with the word Absolut, followed by a complementary word about the product or the consumer, such as a???? Absolut perfectiona???? (www. absolut. com, 2008). Global platform and local adaptation strategy (De Mooji, 1998) has been used to approach the consumer. The iconic bottle was paired with a short sentence corresponding to a different culture or a countrya??????s historical or distinctive landmark.

For instance, a???? The Absolut New Yeara???? was translated using Chinese character a???? fua???? which means fortune and printed upside down during Chinese New Year to mean a???? fortune arrivinga???? ( www. brandnoise. com, 2007). Moreover, Absolut has been working with many celebrities such as Andy Warhol who interpreted the product by painting the bottle in 1985 (Absolut Warhol). The ultimate goal of all types of marketing communication channel is to make a huge impact on consumer minds and become the conversation topic among consumer activities 7. 2. Building and Communicating Brand Values: Branding influences customer decisions and creates value for customers. The brand value mix depends upon superior product quality, acceptable prices, value for money, and ability of the company to recruit and retain customers in different countries (Frank Bradley, 2005). Absolut Vodka targeted the super premium as well as the premium quality market. Producta??????s price level was $ 15- 20 per bottle, which was considered good value for money in the eyes of customers. Owing to the higher quality consciousness which exists in different countries, the demand for high premium products grew.

Further, the consistency of extensive print advertising, outdoor format and brand association with world famous artists and designers has emphasized Absoluta??????s image as smart, stylish, creative and high standard to the consumers. In addition, the company utilized the use of internet communication in order to approach younger generation who are not familiar with Absoluta??????s print advertisements (www. brandchannel. com, 2008). Furthermore Absolut has established consumera??????s emotional connection through interactive features on its website. 8. -The Effect of country-of-origin on Smirnoff and Absolut Vodka In evaluating a countrya??????s products, consumers consider product integrity, price and market presence in their own country and match it with their own personal needs. Kim and Chung (1997) in Frank Bradley (2005) suggested that brand popularity in the domestic market and country image are essential elements for long term success of brands in international markets. A heritage of producing good quality Russian vodka generates the perceived superiority and fine recipes of the product. This is beneficial to the brand that has an origin from that particular country.

Smirnoff utilizes this benefit of country of origin by stressing on brand identity as a genuine heritage of Russian vodka although the product is not actually manufactured in Russia. This strategy allows Smirnoff to be recognized as a premium quality brand. While Absolut Vodka is a Swedish vodka brand, the strategy of the company is to turn away from the a???? a??????original countrya??????a?????? image adopted by Smirnoff. The company created a crystal clear Swedish medicine bottle with see-through label and communicated it through creative advertisement to fit into every marketa??????s culture. (Insead,200:15).

Besides, V&S introduced innovative products such as distinctive flavors and new premium vodka, which contributed to the international image that Absolut Vodka is meant to represent. Absolut Vodka, unlike Smirnoff aims to emphasize internationalization and is more aimed to influence consumers in all markets rather than focusing on relating the brand to a Country-Of-Origin heritage. 9. 0-Conclusion: This report was aimed to assess Absolut Vodkaa??????s position in its market and to propose marketing strategies for further improvement and suggest a market in which more resources should be invested.

On the one hand, main advantages of establishing Future Brands in the USA were suggested as avoiding profit margins from intermediaries, maximization of sales, having more control over the value chain, and obtaining better market feedback. On the other hand, disadvantages were researched to be potential drop in profits at the beginning, risking technology flow, having a high level of commitment, and suffering cultural differences. Further, Absolut Vodka was classified as a a???? a??????Challengera??????a?????? in the USA and Asia Pacific, and a a???? ??????Followera??????a?????? in Eastern Europe, Africa, Australia, and the Middle East. Absolut Vodka characterized itself as an International brand that is adaptive to different cultures while Smirnoff labelled itself as a brand representing pure Russian heritage and was affected by country of Origin. Finally, China was proposed as the country to invest resources in due to several factors such as its massive market, more openness to foreign products, stable economic/political conditions and big populat nd attacking foe a better position in world spirit market

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Absolute Vodka: Defending A1.0-Executive Summary V&S Group, a Swedish Company Owned by the Government Created V&S Spirits to Produce Market and Sell Absolut Vodka Which Is the Companya??????S Strongest Brand (Created in Assignment. (2021, Feb 17). Retrieved May 9, 2021, from https://anyassignment.com/social-science/absolute-vodka-defending-a1-0-executive-summary-vs-group-a-swedish-company-owned-by-the-government-created-vs-spirits-to-produce-market-and-sell-absolut-vodka-which-is-the-companyas-stronges-52179/