Barcardi a Strategic Overview of Essay

Excerpt from Essay :

Given the scale and global penetration of the Bacardi brand and its product line, it is appropriate that Bacardi should possess a visible and meaningful presence in the discussion on underage drinking and alcohol abuse. Certainly, this would be considered an appropriate measure for an organization boasting Bacardi's proliferation. According to Yahoo! Finance (2010), "the company's portfolio consists of more than 200 brands and labels, including Bombay Sapphire Gin, Martini Vermouth, Dewar's Scotch Whisky, B&B and Benedictine liqueurs, and Grey Goose Vodka. Other types of spirits in its portfolio include tequila, vermouth, cognac, and sparkling wine. Serving more than 100 countries, the company operates 27 production sites around the world." (Yahoo! Finance, 1)

This accounts for the company's greatest strength, which is its enormity of scale. Though Bacardi has been in operation for well over a century, the growth potential at this scale has only really been realized in the last two decades. It would be at this point that Bacardi would begin to add well-established brand names to its arsenal, marking its entry into a number of additional spirit categories where it is now highly competitive. Accordingly, the timeline places the initiation of this new phase in its history at 1992. During an era of corporate consolidation and, with the end of the Cold War, the breaking down of barriers to international trade, Bacardi would be one of countless companies to benefit considerably. Indeed, this would mark Bacardi's initiation of a new and torrid growth process. According to the Fact Sheet provided by Bacardi, "Bacardi Limited was formed, unifying four of the five separate strategic operating units of the Company (Bacardi International Limited -- Bermuda; Bacardi & Company

Limited -- Bahamas; Bacardi Corporation -- Puerto Rico; and Bacardi Imports, Inc.

United States). The fifth operating unit (Bacardi y Compania S.A. de C.V. -- Mexico)

was incorporated into Bacardi Limited a few months later." (Neal & Federman, 2)

This would be an important corporate restructuring, allowing Bacardi to begin an acquisition phase of its history that would open the pathway for bold new market diversification. Thus, in 1993, Bacardi would make its first major outside acquisition, purchasing the Martini & Rossi brand name, a top earner in the vermouth category. This, according to Bacardi's own repot, would elevate it to among the top five largest premium spirituous beverage companies in the world. (Neal & Federman, 2)

Bacardi would parlay this new status into a continued expansion of its product offerings and brand names. In 1998 it would acquire Bombay Sapphire gin, which it identifies as the 'top valued premium gin in the world,' as well as Dewar's Scotch whiskey, which it identifies as the 'number-one selling blended Scotch whiskey in the U.S.' (Neal & Federman, 3) In 2002, Bacardi would purchase Cazadores tequila, which it identifies as the 'top premium tequila in the world.' (Neal & Federman, 2) In 2004, Bacardi acquired Grey Goose vodka, which it calls the 'world-leader in super premium vodka.' (Neal & Federman, 2) In 2008, it negotiated an agreement to take a major stake in the parent company for Patron premium brand tequilas. (Neal & Federman, 2)

This series of acquisition is important for helping not just to broaden Bacardi's stake in the market but also for helping to keep the Bacardi rum line in significant production and presence. Quite indeed, this is recognized by Bacardi's Fact Sheet as being the top-selling rum in the world. This is to indicate that Bacardi's greatest strength is its size. This provides it with the flexibility and growth potential to enter into any and all markets in the spirituous beverage context. Its diversification of products extends into its offering of roughly 20 varieties of rum as well as into its marketing of mixed drinks such as the Cuba Libre and the Daiquiri, both credited as having been invented in Cuba using Bacardi rum.

Indeed, the former of these two drinks, often identified as Rum & Coke, is demonstrative of one of the strengths unique to Bacardi's outlook. Namely, Rao & Ruekert (1994) provide an interesting discussion on the opportunities created for marketing growth through brand alliance. This denotes another of Bacardi's core strengths, which is its capacity to join with other prominent brands in order to extend its reach and further solidify its familiarity amongst broader buying populations. According to Rao & Ruekert, the Cuba Libre beverage has long served as a mutual opportunity for both Bacardi and Coca Cola, the world's leading software producer. Rao & Ruekert point out that "

Strategic Options

The Differentiators for Bacardi are primarily its features of size, prestige and cultural distinction. As the largest seller of rum in the world, it does possess an advantage over its competitors. Additionally, it has been successful in associating itself with Cuban history and imagery, which has helped to bring it a reputation of authenticity.

The Arenas in which Bacardi has made its success are all over the world. With the United States and the Caribbean as its primary contexts for operation, it has since expanded into the U.K. France, Mexico, Spain and others. Today, it is also making a presence in India, China and other opening marketplaces.

The Vehicles for its success have been its broad and diversified line of rums and, subsequently, its offering of prominently known brands in a number of other spirit categories.

The Staging denotes a market strategy which largely associates Bacardi with high-class recreation or vacation-type recreation. Additionally, its work to associate itself with the historical look and feel of Cuba has been an important part of its staging.

The economic model is one which initially began as a diffusely-based company with an ambition to expand into the far reaches of the global marketplace. With the inception of free trade strategies on a global basis, this model would shift to one of consolidation and acquisition.


This produces what is perhaps the most significant recommendation to be derived from our research. Namely, the opportunity for greater brand alliance is significant for Bacardi. Evidence suggests that the company is in a unique position to ensure its correlation in perpetuity to a popular mixed drink and to remain visible through not just its own marketing materials but through those of the brand with which it has partnered. As Rao & Ruekert report, "if one brand name on a product gives a certain signal of quality, then the presence of a second brand name on the product should result in a signal that is at least as powerful, if not more powerful than, the signal in the case of a single brand name. . . brand alliances can serve as quality signals." (Rao & Ruerkert, p. 89)

Certainly, this implies the opportunity which is available to Bacardi through its long-standing association with Coca-Cola. To date, while it has long been identified as an association as a result of the popular mixed beverage formed by the interaction of these two products, there has not be an aggressive marketing campaign on the part of either company to strengthen this association. Indeed, allowing this association to remain almost incidental denotes an opportunity which is largely being overlooked by both companies. For Bacardi in particular this is a lost opportunity which should be addressed given that the variations on the mixed beverage's name allow for the interchanging of Bacardi with any number of other rum brands. The 'rum and Coke' or Cuba Libre monikers for the beverage suggest that more effort is needed to lock down an association between Coca-Cola and Bacardi in specific.

According to Rao & Ruekert, the association between the two products today is allowed to occur on a somewhat incidental level. They report that brand alliance "may simply involve the promotion of complimentary use, in which one product can be used or consumed independently of the other (in the case of Bacardi Rum and Coca-Cola). Regardless of the nature of the association, the perception that the two brands are linked, as a consequence of their joint promotion" produces a considerable opportunity for both brand names. (Rao & Ruckert, 87) The recommendation which has been produced by our research supports the seizing on this incidental relationship for the establishment of a long-term marketing campaign that is mutually produced by Barcardi Rum and Coca-Cola.

This would help to establish Bacardi as the rum to be paired with the most successful soft-drink brand in the world. The opportunity to become permanently associated with Coca-Cola justifies an ongoing campaign in which the name of the mixed beverage in question is actively marketed as a Bacardi and Coke. It should be considered the primary ambition of the Bacardi company to make this association inherent, with the intended deliverable being the more permanent identification of the mixed beverage in question as a Bacardi and Coke.


Bacardi has already had great success in expanding its market through growth-driven acquisitions across the last two decades. Indeed, this strategy has proven valuable in allowing Bacardi…

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