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International approach to the local market Case Study


This case study is based on the framework of internatonal mergers and acquisition, its way of success and challenges that come along with it.

The concept of mergers and acquisition thus has to be understood and internalised before critically evaluating the Vechtel case study and how it applies to topics dealt like international takeovers, leadership in international environment, cross-cultural communication, company cultures and stereotyping (King et al., 2004).

When we use the term ‘merger’, we are referring to the joining of two companies where one new company will continue to exist on the other hand the term ‘acquisition’ refers to the purchase of assets by one company from another company. In an acquisition, both companies may continue to exist (Doz, 1986).

However, in this discussion I will loosely refer to mergers and acquisitions (M & A) as a business transaction where one company acquires another company. The acquiring company (also referred to as the predator company) will remain in business and the acquired company (which is sometimes called the Target Company) will be integrated into the acquiring company and thus, the acquired company ceases to exist after the merger (Van, 1995).

It will be concluded that it is important to understand that Mergers and acquisition are extremely difficult and that expected synergy values may not be realized. This paper seeks to discuss the case study.

Define the three phases of internationalization that occurred after Vechtel took over the french company

The three phases after internationalization that occured after Vechtel took over the french company comprise of: Brasseries Lilloises, Union du nord and Vechtel France.

Brasseries Lilloises was known to be one of the main rival of union du nord, union du nord, on the other hand, was one of the three companies that formed groupe du nord and it was in itself a collection of smaller breweries and at the time was facing financial problems (King et al., 2008).

However, as the study shows the three had developed a poor relationship towards each other after the takeover this is evident from the following case scenarious; There was resentment between Brasseries lilloises and Vechtel France due to the fact that they were under the management by a person from the new company Union du Nord.

This resentment came from the fact that Brasseries Lilloises had taken great pride in the approach it used to brew its beer and was extremely proud of the approach and thus the presence of a manager from Union du Nord was a threat to this approach as its goal was to keep its own company values (Prahalad and Doz, 1986).

Despite all this, Vechtel France was very proud of the role it was playing in establishing the Vechtel brand in france, this led to division between Vechtel France and Groupe du Nord which practically showed that this acquisition was becoming unworkable as there were conflicting intrests particularly regarding the long-term plans.

This was particularly challenging considering the fact that Vechtel was at the time dealing with deplorable set of financial figures, an excessive number of breweries and an overloaded portfolio of brands all which called for restructuring, where several breweries will have to be closed down, people fired and brand range revised.

Studies have shown acquisition normally result in the following three integration process levels: Full, where all functional areas (operations, marketing, finance, human resources, etc.) will be merged into one new company. The new company will use the ‘best practices’ between the two companies (Covin, 2004).

Moderate, where certain key functions or processes (such as production) will be merged together. Strategic decisions will be centralized within one company, but day to day operating decisions will remain autonomou and Minimal, where only selected personnel will be merged together in order to reduce redundancies.

Both strategic and operating decisions will remain decentralized and autonomous (Lamoreaux, 1985).

Thus, in Vechtel case it is evident that the was lack of coperation after the take over and that the three phases of internationalization did not result to practicable merger at the time and as Vechtel had put it restructuring was inevitable.

Concept of stereotypes: Extent in which stereotyping is evident in the thoughts and words of the Jean-Pierre Courbet and Jaap Harmelen

Stereotyping which basically focuses on the diffrences between individual or group and makes it look like this individuals or group are extrely different whereas the truth is they are not that different but their approach to the same result they will agree on is the cause of this diffrence (Kesner, 2008).

In most circumstances stereotyping helps individual reach at a more accurate decision (DePamphilis, 2008). The extent of stereotyping is evident in this case study and can be seen in both action, words as well as thought of the two individuals Jean-pierre Courbert and Jaap Harmelen and is evident as discussed below.

First the concept was displayed by Jean as he was heading to the meeting with Jaap, we are told in his thought he was contemplating his present situation and as he looked around the Vechtel name displayed on the street was encouraging to him despite the fact that Vechtel had resently taken over the ramshackle group of breweries that he Courbert did not agree with the end result was to see that Vechtel succeed in the market.

In another scenario Courbert is seen to differ in his thought with the way in which the managers who are graduates in the top business schools behave, he did not see the point of obsequious bahaviour of his new bosses and that if he does not agree with something he states it, this type of streotype according to studies leads to positive results(Chad, 2008).

Jaap Harmeleen on the other hand displays evidence of stereotype during the meeting they held with Courbert, in which he blames the management for making to many mistakes in reference to the spanish brewery case while he was one of the key personell in Vechtel management team and also a member of the board (Rosenbaum and Joshua, 2009).

Classification of cultures: What sort of effects do you think the culture of each protagonist (Courbet, Harmelen) had on the success of the takeover by Vechtel of French company?

The culture of Courbert had an effect in the success of takeover by Vechtel of the French company in the following way, as his French colleagues were dismissed in the process of reorganisation he was maintained to help in managing the other staff as well as advising the chief executive.

Presence of Courbert proved to be helpful in the Inter-HRC distribution company which Vechtel seem to have a problem during acquisition, as the the director he persuaded Vechtel to retain it, this did not only secure customer numbers but also did maintain good relationship with the people running pubs and bistos which according to him is the way to get beer sold in the country (Ruigrok and Van, 1995).

In the meeting Coubert had with Harmelen, he said that the reason for the failure in Spanish case is failure to have any spaniard in the management team, more over none of the manager could speak spanish and that they had no idea about the spanish way of doing things, their feeling of pride and the spanish culture. Thus indicating that the contrary was the case in takeover of Vechtel of French company.

Harmelen on the other hand was proficient in English and most importantly was a fluent French speaker, what helped in the success of the takeover in his part is the fact that he seem to be a real francophile as he relished France’s dedication to food and drink this showed that he appreciated culture of the France people.

In his statement to Coubert concerning the Spain he expressed sadness saying that the people of Spain should have received the same personal touch and good contact the same way the people in France did, this in essence show that he cares about the culture of people in France which did contibute to the success of the takeover.

Cultural and Social differences, has been a topic of discussion by scholars as regards to successful mergers and acquisition. It has been said that most problems can be traced to ‘people problems’. If the two companies have wide differences in cultures, then synergy values can be very elusive (Straub, 2007). Harmelen being the Dutch manager showed respect to the various brewery cultures within the company as well as creating confidence among employees.

The culture of the companies concerned: What are the strategies of Vechtel (Rotterdam HQ) and of Brasseries Vechtel (Lyons) with regard to internationalization? In what ways are they similar/different?

The strategy of internationalization as partains to Brasseries Vechtel developed soon after the company decided to change the name from Brasseries Unies to Brasseries Vechtel, the whole idea of this change was to speed the intergration of the loose element in the company by creating a clear Vechtel identity.

The Brasseries Vechtel strategy involved transforming the Vechtel product to a more acceptable position in the France market, however it met a lot of challenges as it was resisted at all level of the work force. The two brands that resulted was the international brand and the national brand (Schmader and Chad, 2008).

Rotterdam HQ strategies as regard interationalization involved strengthening the Vechtel brand through buying local brewers with a strong distribution network. Due to this Vechtel had moved into Eastern Europe and also strengthened its position in Western Europe by increasing its participation in companies it had acquired (Kaynak and Cavusgil, 1983).

While the Brasseries Vechtel stategy involved making the Vechtel brand more acceptable in the the French market, Rotterdam on the other hand involved strengthening Vechtel brand through acquisition of other local brewers. While the two strategies differ they however had the same goal of improving the Vechtel position in the French market.

The way the culture concerned behave in cross-cultural situation

  1. How are the two internationalization strategies described in question 4 reconciled?

The two international strategies can be seen to reconcile as described by the new merger, considering the Rotterdam strategy that involved pushing up the marketshare and Brasseries Vechtel which involved gaining acceptance in the local market the two reconcile because of one the respect that Vechtel had for Courbet who was able to calm down the tension that arose from the change of name from Brasseries Unies to Brasseries Vechtel.

Secondly Vechtel as result of this acceptance had Full control of Interhold, the holding company and was successful in introducing its main brand into France which had become a strategic market for Vechtel (Maddigan and Zaima, 1985).

  1. How did the two companies arrive at a common goal, despite the diffrences in their respective national cultures?

Despite the diffrences in the repective national cultures with French government raising objections regarding the move saying that it could lead to unhealthy denomination of the market. On the other hand Courbet level of experience in the french market and the fact that Vechtel organisation in france had to develop in line with the market it was serving made the Vechtel directors to reconsider this merger.

Thus the two companies reached a common goal as a result of the procedure adopted by Coubets, though the take over was intended to strenghen the Vechtel brand Coubet advocated that Schaeffer survive as a separate operating company within Interhold holding as way to acknowledge the ever increasing importance of speciality beers as well as allow the families running the brewery have some control after the takeover.

The mother company on the other hand had plenty of cash as well as willing lenders and was ready to invest the time to make the takeover work.

As much as there was a need to increase market share as well as develop synergies and improve productivity from this takeover the contributing factor towards arriving at the common goal was the people involved and the need to let them have their independence.

The result was succesful though expensive for Vechtel as the acquisition of the majority of shares held by the families involved was finally agreed on.


  1. What still has to be done to make Brasseries/Vechtel (Rotterdam) more international?

There is more that would have enabled Brasseries/Vechtel to be more international, considering what Coubet thought on theories advanced by certain school of thought is that as much as mergers and acquisition allow all kind of economies of operation it is necessary to maintain the vital commodity innovation and this can be achieved by letting the people working in this companies give their contribution in full, and by so doing can achieve more international identity (Cavusgi, 1987).

The brand of this brewers should also be made to focus more on international brands rather than the national brands.

  1. Could the first phase have been shortened and/or improved?

The first phase would have been improved and made more effective if Vechtel had put into consideration the importance of involving the local people in the takeover as well as by taking into account the various element that this people wanted to be incorporated in the brand, this will have speeden the acceptance of Vechtel into the local France market and its presence made known more effectively (Browaeys and Price, 2011).

  1. Could the takeover of schaeffer have been realized in a better way?

The takeover of Schaeffer was done at the time that it was experiencing some management problems as well as financial, Vechtel should have overlooked the fact that acquiring Schaeffer was only for the increase of market share but concentrate in uplifting what Schaeffer was renowned with, its speciality Alsatian beers. This would have incresed the market share as well as enhance and maintain business with the premium sector.

  1. Which elements on the cultural level do you consider to be most influential to the success of take overs such as those described here?

The elements of a cultural problem that I consider to be most influencial to the success of the take overs are the locals. That is to mean that the local people does affect the acceptance of the company taking over depending on how this company intergrates all the attributes of the local people’s culture including their way of life, language and food (Price, 2011).

The case study does show that the major reason for the failure in the Spain take over is because the Dutch managers had failed to take into account the spanish context of doing things, and according to Jean-Pierre if the same thing had happened in France then the situation would have been the same as in Spain (Craig, 2000).

In conclusion, it is important to know that Mergers and acquisition are extremely difficult and that expected synergy values may not be realized, which leads to Mergers being considered a failure (Zaima, 1985).

Cultural and social diffrences are not the only reason behind failed mergers. Other reasons exist and they include poor strategic fit, incomplete and inadequate due diligence, poorly managed integration, being overly optimistic and paying too much (Joshua, 2009).


Browaeys, MJ & Price, R 2011, Understanding cross-cultural management, Pearson, Harlow.

Craig, T 2000, Across Product Classes, ‘International Journal of Advertising’, Vol. 2, no. 5, pp. 147-157.

DePamphilis, D 2008, Mergers, Acquisitions, and Other Restructuring Activities, Elsevier Academic Press, New York.

Kaynak, E & Cavusgil, ST 1983,Consumer Attitudes Towards Products of Foreign Origin: Do they Vary, Sage, New York.

King, DR, Dalton, DR, Daily, CM & Covin, JG 2004, ‘Meta-analyses of Post-acquisition Performance: Indications of Unidentified Moderators’, Strategic Management Journal Vol. 25, no. 2,pp. 187–200.

King, DR, Slotegraaf, R & Kesner, I 2008,’Performance implications of firm resource interactions in the acquisition of R&D-intensive firms’, Organization Science, Vol. 19, no. 2, pp. 327–340.

Lamoreaux, NR 1985, The great merger movement in American business, Cambridge University Press, London.

Maddigan, R & Zaima, J 1985,’The Profitability of Vertical Integration’, Managerial and Decision Economics, Vol. 6, no. 3, pp. 178–179.

Prahalad, CK & Doz, Y 1986, The Multinational Mission: Balancing Local Demands and Global Vision, The Free Press, New York.

Rosenbaum, J & Joshua P 2009, Investment Banking: Valuation, Leveraged Buyouts, and Mergers & Acquisitions, John Wiley & Sons, Hoboken NJ.

Ruigrok, W & Van TR 1995, The Logic of International Restructuring, Routledge, London.

Schmader, T & Chad F 2008, ‘An intergrated process model of stereotype threat effects on performance’, Pyschological Review, Vol. 115, no. 2, pp. 336-338.

Straub, T 2007, Reasons for frequent failure in Mergers and Acquisitions: A comprehensive analysis, Gabler Edition Wissenschaf, Deutscher Universitäts

This Case Study on International approach to the local market was written and submitted by user Leo Erickson to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly.

Leo Erickson studied at the University of Tennessee, Knoxville, USA, with average GPA 3.61 out of 4.0.

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Erickson, Leo. "International approach to the local market." IvyPanda, 6 Apr. 2019,

1. Leo Erickson. "International approach to the local market." IvyPanda (blog), April 6, 2019.


Erickson, Leo. "International approach to the local market." IvyPanda (blog), April 6, 2019.


Erickson, Leo. 2019. "International approach to the local market." IvyPanda (blog), April 6, 2019.


Erickson, L. (2019) 'International approach to the local market'. IvyPanda, 6 April.

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