Turning a focus to Internal Factors

The internal environment of a company actively reflects their values, and therefore could be their biggest strength.  By using the "Value-Chain Analysis" we can see where ABSOLUT puts their emphasis to give consumers a product they are willing to pay for, and furthermore, a brand they can depend on.  Below I will examine a few of these properties more closely, including primary and support activities. 

Support Activities that add value to ABSOLUT:

        Technology- The most important technologic factor is in ABSOLUT's distilling process.  Their founder, L.O. Smith invented a system call continuous distillation.  This process runs the vodka through hundreds of time until all impurities are taken out.  This gives them an advantage to other companies who limit their distillation to around five times. 

        

        Procurement- In order to make a quality product that stood behind their brand name, ABSOLUT has maintained the same recipe for over 30 years.  They continue to use pure water from a deep well, and harvest their own Winter Wheat that is grown with minimal fertilizers.  By growing and gathering their own natural resources, they are not worried about supplier power.  

Primary Activities that add value to ABSOLUT:

        Inbound Logistics- ABSOLUT has a unique process as they make every ounce of ABSOLUT in their hometown, Ahus, Sweden.  Since all the materials are gathered there, they don't have far to travel to the plants.  From the manufacturing plant that makes the bottles, to the distillery everything is done within the ABSOLUT Company.

        Operations- Since 1879 the ABSOLUT Company has produced its vodka through a process they introduced called continuous distillation. This gives them their claimed fresh taste; they even take it a step further by rinsing each bottle with vodka before actually filling them.  Although extra time is added at every step, they are ensuring the quality product that they promise their consumers. 

        Marketing and Sales- New innovative line of bottles called ABSOLUT UNIQUE.  As a company that depends highly on its well-known logo and famous bottle design, ABSOLUT has taken the next step in being different from competitors.  With around 4 million different designs, customers can be a part of a truly original and limited experience.  They make a bottle that really pops along a long shelf of choices.

Another important concept to remember are the tangible and intangible assets a company holds.  For ABSOLUT their most important tangible resource, beside the vodka itself, would be their bottle.  The original design based off century old medicine bottles has a shape that people can recognize and associate with their brand... Something other companies can envy.  A notable intangible asset is the name itself, ABSOLUT.  Having a brand name that also describes the product the company is trying to sell, absolute pure vodka, is a great association tactic. 

The Environment Surrounding ABSOLUT.

To fully understand specific markets, consumers, and competition, a brand needs to analyze and interpret their external factors.  From trends, to politics, ABSOLUT needs to focus their attention on certain areas to maintain their success. 

         In order to hold their status as the fourth largest international spirit brand in the world, ABSOLUT needs to constantly stay on top of current trends.  This includes seeing what new products other vodka brands are developing (as far as flavors, mixtures, etc.).  To date ABSOLUT has 19 different kinds of vodka ranging from classic, to pear, to a new hibiscus pomegranate flavor. 

       Another factor rises with the quality of their product, is there a healthier, more environmental friendly option for consumers to choose?  Fortunately ABSOLUT takes pride in their brand by only using organic ingredients, and never adds sugar.  This sits well with consumers who are focusing more attention on what goes into their daily food and drink. 

        On top of watching what the competition is doing, ABSOLUT needs to watch the global market, especially being a highly traded product.  As the number one imported vodka to the United States, legislation involving tariffs and import/export taxes should be a top priority for ABSOLUT's financial and marketing departments.  A change in taxes could potentially cause their product to rise in price, or to be unable for sale in certain areas.  Additionally they need to stay up to date on any laws concerning the sale of alcohol, whether it is based on location or age, so that they do not run into trouble with the law.  It is crucial for their marketing team to focus on the appropriate groups. 

         Overall ABSOLUT currently has a strong stake in their industry, but that does not mean they can stop researching their market or reinforcing their product.  As the world progresses and advances, they need to change simultaneously as to not lose their position in consumer’s eyes.

     

Introduction

This semester I am in a class entitled "International Strategic Management" at Augustana College in Sioux Falls, SD.  As a way to gain a deeper understanding for materials presented in the course, I will be blogging a real life application of course work to the brand ABSOLUT Vodka. ABSOLUT is one of the world's most popular brand of premium spirits and is over 400 years old.  Throughout the next couple months I will be examining all aspects of this company from external to internal factors.