Consumer Goods

In: Business and Management

Submitted By blaine
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History and Development The Brown-Forman Corporation (BFC) entered the market producing bourbon in 1870 under the Old Forester brand name. They survived the Prohibition through approval to produce alcohol for medicinal purposes. BFC continued to survive even through the period of World War II through provision of alcohol for wartime supplies; rubber and gunpowder production. Throughout the years BFC made several acquisitions which proved to be profitable; Early Times, Jack Daniels and Southern Comfort to name a few. Through successful marketing relationships and investing in international alcohol distributing companies, the timely acquisitions, and BFC’s innovative efforts - developing a new whiskey in 1988 - as well as their ability to diversify via purchasing well-known global luxury consumer durables BFC has continued to prosper. From 1998 - 2002 BFC’s stockholders’ equity and company assets had continuously increased with a relatively small increase to the companies operating income in contrast to their significant gains in gross profits. By 1965 the company entered the wine business. A few of their marketing and distribution arrangements led to eventual ownership of several international vineyards, hence the creation of the Wine Division (WD). The wine division like its parent-company thrived and did well, particularly through their acquisitions. By mid-year 2001 a new venture was created to house a portfolio of small, upscale brand wines. This separate division became known as BFC’s Wine Estates (WE). This division has not immediately realized the profits sought and the managing director is currently considering his ability to justify their continued existence as a separate entity.

Internal Strengths and Weaknesses Though the WD division has proven its ability to survive, through sound acquisitions (Fetzer) can WE be as profitable? Steve Dorfman the…...

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