Currently I am reading "Global Brands: The Evolution of Multinationals in Alcoholic Beverages" by Teresa da Silva Lopes. As the name suggests, this book focuses on the development of MNCs in Alcoholic Beverages from 1960 to about 2003. Here, it focuses on an industry that has been traditionally dominated by family-owned businesses and relies heavily on marketing: managing brands and distribution channels more specifically.
Why does purely professional management that seems to outshine family-dominated businesses in other industries lag behind here? The author believes that this happens because there is a strong element of heritage and pride in this business, which makes it more than just a "money-spinner" for the family. This ensures that the family tries to take decisions keeping in mind the long-term consequences. For this, they are prepared to bring in professional managers but maintain a controlling stake in the company. Managers, on the other hand, may focus on short-term results to demonstrate performance. While this may work very well for industries with a small product lifecycle (like technology), it is not as effective for the Alcoholic Beverage industry where brands sometimes outlive the company. The business is also marketing-intensive and needs sustained brand management, perhaps more than any other product from the food and drinks industry. The book explores the critical role of effective and consistent distribution channels along with the optimum use and nurturing of the Marketing knowledge. I am impressed with the effort put in to produce this exhaustive research. Overall, as a data repository it is an excellent source to get a bird's eye view of the alcoholic beverages industry and in the process learn some important bits about consumer goods based businesses.
Why does purely professional management that seems to outshine family-dominated businesses in other industries lag behind here? The author believes that this happens because there is a strong element of heritage and pride in this business, which makes it more than just a "money-spinner" for the family. This ensures that the family tries to take decisions keeping in mind the long-term consequences. For this, they are prepared to bring in professional managers but maintain a controlling stake in the company. Managers, on the other hand, may focus on short-term results to demonstrate performance. While this may work very well for industries with a small product lifecycle (like technology), it is not as effective for the Alcoholic Beverage industry where brands sometimes outlive the company. The business is also marketing-intensive and needs sustained brand management, perhaps more than any other product from the food and drinks industry. The book explores the critical role of effective and consistent distribution channels along with the optimum use and nurturing of the Marketing knowledge. I am impressed with the effort put in to produce this exhaustive research. Overall, as a data repository it is an excellent source to get a bird's eye view of the alcoholic beverages industry and in the process learn some important bits about consumer goods based businesses.
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