Data Bases • Custom Term Papers • Free Term Papers • Free Research Papers • Free Essays • Free Book Reports • Plagiarism? Links • Top 100 Term Paper Sites • Top 25 Essay Sites • Top 50 Essay Sites • Search 97,000 Papers @ DirectEssays.com • Search 101,000 Papers @ ExampleEssays.com • Search 90,000 Papers @ MegaEssays.com Free Essays • Term Paper Sites • Chuck III's Free Essays • Free College Essays • TermPaperSites.com • My Term Papers • Get Free Essays • Essay World • Planet Papers	Search Lots of Essays Back to Subjects - Business Anheiser Bush Vs Budvar Anheiser Bush Vs Budvar Anheuser-Busch has been the nation’s largest brewer for more than 40 years. In the mid-1800’s Adolphus Busch became familiar with the beers of a small Bohemian town called Budweis. After emigrating into the United States he married into the Anheuser brewing family. In the 1870’s Adolphus Busch registered Budweiser as a trademark in the U.S. Adolphus Busch dubbed his company’s Budweiser “the king of beers.” Budweiser is a registered trademark of the St. Louis-based Anheuser-Busch, which is the world’s largest brewing company. In recent years Anhauser-Busch has faced increased competition in the U.S. market. As a result of this increased competition the company has been looking overseas for growth and increased profits. Budweis is a small brewing town in the Czech republic. The town has a 700-year-old history of beer brewing. The brewing company Budvar of Budejovice registered Budweiser as a trademark in Europe in 1895. Budvar’s Budweiser is considered by beer experts to be a greater beer than the American Budweiser. Czechs are very proud of the Budvar brewery and considers its beer to be a national treasure. In the days before a global marketplace, the American Budweiser and the Czech Budweiser have never really competed with each other. However, in the 1990’s with increased global competition in the beer market, this dispute over who actually owns the Budweiser name takes on increased importance. According to a 1958 agreement signed by the Czech government, brand names that denote geographic origin are protected. So the Czech government which owns Budweiser believes that they should be the only ones allowed to carry that name in Europe. However the United States did not sign that treaty in 1958, so they do not agree with this. They have decided that it was no longer necessary for them to have a trademark settlement to develop the American Budweiser business in Europe. They decided to sue the Czechs on a country-by-country basis to win that right. What Anhauser-Busch does with this offer and if and when the trademark dispute is settled is the focus of our paper. This is a very interesting case, because there are two different companies with different beliefs. Because, they are from different countries they follow different sets of laws. In this case we will try to come up with a resolution that will benefit both the American and Czech Budweiser. Anheuser-Busch is the world’s largest brewing company. Budweiser is a popular trademark of Anheuser-Busch. A problem is that Anheuser-Busch can’t use it trademark Budweiser name in every country of the world. This goes back to European brewing industry, which dates back to the 14th century. Back then Bohemia, now the Czech Republic was famous for its beers. One particular town called Budwies was the center of this brewing history and activity. A person from Budweis would be know as a Budweiser; the same would be true of the town’s beer. In 1985, the Budejovicky Budvar brewery was established in Budweis, and its beer was officially named Budweiser, the beer of kings. (Budweiser Case 202). So Anheuser-Busch had to find a way to market the Budweiser name in European countries. So in 1911 they signed an agreement with Budvar that allowed them to sell Budweiser beer in continental Europe. This would help end the trademark issue. There were many responses to the Anheuser-Busch and Budejovicky Budvar agreement. The Czech consider the name Budweiser to be more than just a brand name. In United States, a name brand is just a name brand. It doesn’t represent anything. Americans try to sell the name brand in the United States. Americans are just trying to sell the name brand image. The Czech Budweiser meant a geographic name that indicates a product’s origin and is a source of Czech national pride. In 1958 the Czech Republic signed a European agreement that denotes that brand names that come from a particular region are protected trademarks. The US never signed this agreement, leaving Anhauser-Busch able to continue to legally use the Budweiser trademark. The Czechs believe that their beer is the only beer that should be allowed to care the name Budweiser. This means that the name Budweiser should be allowed to only Czechs. The Czechs feel strongly about their beer name. Also, the issue of privatization comes up. The Czechs don’t like to sell part of their share or company to Western companies. This is like giving something away. This Budvar beer is well- known, and signing this agreement with Anheuser-Busch made the people mad. Why did they sign with Anheuser-Busch? Budvar was already doing well by itself. It like giving away a secret or competitive advantage of their to another company. Lastly, the issue that comes up is the taste of the beer. American is famous for many things, but the taste of beer is not one of them. The Czechs feel that their Budweis beer is so much better than the American Budweiser. These two beers do not compare to each other. Budvar’s Budweiser is considered by beer experts to be one of the worlds premier brews. If these two companies are combined many Czechs feel that the merger will drag Budvar’s reputation down to the level of the American Budweiser. The taste of Budweis is so much better than Budweiser in the eyes of the Czechs. This issue of the pride in Budvar by the Czech people and government, has been one of the issues that has spurred disagreement between Anhauser-Busch and Budvar. The most important strength for Anhauser-Busch is its sheer size. The beer brewer is also part of the Fortune 500. Anhauser-Busch controls 45% of the massive US beer market. Anhauser-Busch has twice as much market share as any other brewery. Its Brand names like Bud, Michelob, and Budweiser are well known to American beer drinkers. The Budweiser frogs and lizards commercials are well liked and prominent during events like the Super Bowl. This dominance of the US beer market has a 100 year old history. Anhauser-Busch has large amounts of cash reserves permitting it to fight for any market it wants. Anhauser-Busch also has the resources to compete with any European brew in the European market In he several years Anhauser-Busch has won about 8 courtcases in European courts over the Budweiser trademark with Budvar. These victories strengthen Anhauser-Busch in its battle over the trademark. As a result of the victories, Budvar recognizes Anhauser-Busch’s new strength and has made an offer to Anhauser-Busch of a 10% stake in Budvar. In many countries in Europe Anhauser-Busch has begun to gain some market share and turn some profits. Some of these countries include Ireland and the United Kingdom. The American market is a relatively stagnant market for Anhauser-Busch. There is very little growth in America and 94% of Anhauser-Busch’s sales occur inside America. Imports like Amstel and Heineken have made inroads in the American beer market. To increase sales and Profits Anhauser-Busch must look for business in foreign markets. American beer is not very well liked in Europe. Many Europeans consider American beer to be weak and they do not like the taste. This presents a very large challenge for Anhauser-Busch. It will be very difficult to change the tastes of an entire continent of beer drinkers Previous attempts to form a joint-venture or purchase Budvar have failed. The Czech government and people consider Budvar to be a national treasure and looks at Anhauser-Busch’s efforts to purchase a stake in Budvar to be an act of economic imperialism. Top management at Budvar has rejected numerous attempts by Anhauser-Busch to purchase Budvar. This fact leads to the conclusion that Budvar’s management is less than enthusiastic about partnering with Anhauser-Busch. There are a great number of opportunities for Anhauser-Busch in its potential relationship with Budvar. The opportunity to partner with Budvar will give American based Anhauser-Busch access to the secrets of one of the best beers in the world. Anhauser-Busch can also expand and market this superior brew in Europe and in the US. An imported beer with the quality of Budvar can take on successful imports like Amstel and Heineken. This would be a great opportunity for Anhauser-Busch to gain some market share in the imported beer market in the US. This relationship will also resolve the trademark dispute between Anhauser-Busch and Budvar. An end to this dispute will end the expensive process of litigating the dispute country by country. The threat from Budvar itself is rather small. Budvar is a small underfunded state run company. A major threat to Anhauser-Busch would entail a competitor like Miller investing in Budvar. This would be the “nightmare” scenario for Anhauser-Busch. If Budvar aquires the resources of a large competitor, Budvar will be in a position to compete with Budweiser in Europe and able to export and market Budvar in America. This would also give Budvar the resources to litigate more effectively against Anhauser-Busch in disputed markets across the world. The other potential threat to Anhauser-Busch is the legal threat. Budvar could potentially win some of the court cases in the ongoing litigation between the two parties. This would prevent Anhauser-Busch from entering some markets in Europe. Recently Budvar ‘s Management has been given the opportunity to purchase a 10% stake in Budvar. Anheuser-Busch will offer to buy this stake in Budvar. One alternative is for Anheuser-Busch to invest into Budvar. They will have the opportunity to obtain more ownership as the years progress. This is one way for Anheuser-Busch to get involved in the entire European market with Budweiser beer. As of now, Anheuser-Busch has only been allowed to use their Budweiser through selected foreign countries due to the trademark dispute with Budvar. Anheuser-Busch has decided to go country by country and suing them in order to sell Anheuser-Busch’s Budweiser in Europe. They have won in 9 countries and have 27 other cases pending worldwide. If joined with Budvar, Anheuser-Busch will have the ability to grow within Europe and not have the litigation expense or conflict with Budvar, but rather work together as one team. Through this partnership, Anheuser-Busch will expand Budvar’s brewing capabilities and through the American marketing abilities, become Europe’s leading beer. After successfully developing their position in Europe, Anheuser-Busch will take Budvar and export it back to the United States. They will compete directly in the premium import beer market with Hieniken and Amstel. The second alternative is for Anheuser-Busch to continue through all the troubles of litigation and try to win as many cases as they can to allow Anheuser-Busch’s Budweiser to expand through the European market. This direction will be very expensive and possibly have a negative outcome. There is a possibility that the majority of the countries Anheuser-Busch is suing can reject its attemps to move into the European market. This procedure will also be very time consuming if the litigation cases are not settled for many years. The third alternative is to stop with all the litigation cases throughout Europe and proceed with the countries that Anheuser-Busch has already entered. This is basically a surrender on the part of Anheuser-Busch. They can stay within the US and continue with their prevous strategies. This would not be the best course of action because Anheuser -Busch needs to expand their global markets to compensate for a stagnant US market. As a group we recommend that Anhauser-Busch make an offer to management at Budvar for the 10% stake in Budvar offered by the Czech Government. !0% now could turn into 30% and then maybe 50% sometime in the future. This is a graet opportunity to team up with one of the top brewing companies in the world. Though this partnership Anhauser-Busch will gain access to the secrets of 700 years of brewing experience. These secrets will give Anhauser-Busch new ways to brew its beers in America. Better brewing in America can lead to better beers and more market share. This investment to Budvar will also put an end to the expensive process of litigating the dispute country by country. This litigation is both expensive and a waste of time. Time wasted litigating can be better spent marketing Budweiser in Europe and turning larger profits. Anhauser-Busch can take its resources and macro-brew experience and expand Budvar’s brewery. Expansion and better management of this brewery will lead to more production of Budvar. Anhauser-Busch will have the chance to use its marketing expertise and resources to market Budvar across the European market. Budvar will change from a small local brewery into a large brewery capable of competing against the largest beers in Europe. This will be a tremendous boost for Budvar and Anhauser-Busch. Budvar will gain more profits and Anhauser-Busch will share in these same profits. Anhauser-Busch can then market and sell its brands across Europe without the threat of litigation from Budvar. Expansion of the brewing capabilities of Budvar will give Anhauser-Busch a unique opportunity in the American beer market. With excess production of Budvar there will be sufficient Budvar to export Budvar back into the United States. This a tremendous opportunity for Anhauser-Busch to compete in the premium imported beer market. Imports like Amstel and Heineken have recently stolen market share from Anhauser-Busch in the American market. This partnership with Budvar will allow Anhauser-Busch to compete directly with these two imports with its own superior imported beer. There is the chance that the opportunity to purchase a share in Budvar will never materialize. If this occurs we suggest that Anhauser-Busch continue its present course of litigating the issue country by country. Bibliography: Bibliography Global Marketing, 1999. Warren J.Keegan and Mark S.Green. Case 5.2 Bud versus Bud. Pages 202 -203. Budvars homepage: http://www.budvar.cz/english/ Budweiser homepage: http://www.budweiser.com/ Word Count: 2358
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