This study showed that Brown-Forman Corporation’s (Brown-Forman) has a winning business strategy. It passes the three major tests, which are the Fit Test, Competitive Advantage Test, and Performance Test. The company’s strategy effectively addresses the company’s situation both internally and externally. The strategy takes advantage of most of the industry’s trends, mitigates the negative impacts of the industry’s driving forces, and ensures that the company meets the industry’s key success factors. It helps the company achieve sustainable competitive advantages by fully utilizing its biggest resources and capabilities.
The strategy has also directly contributed to the company’s financial success and market standing. In comparison to its biggest competitor, Beam Inc. (Beam), Brown-Forman has significantly stronger financial position within the industry. Some of its biggest financial strengths include its ability to generate cash from operations, obtain high returns from invested capital, and create strong, positive cash flows for future acquisitions and shareholder return.
Areas where the company could improve include developing strategies to address changes in regulatory and political environment, developing ways to guarantee a steady supply of their products’ key inputs, and utilizing strategic partnerships for distribution. The company should also consider acquiring companies like the Firefly Distillery and Bacardi to expand their product breadth and geographic reach.
Higbie, Keely J., "Brown-Forman Corporation and the Distilleries Industry" (2013). MBA Student Scholarship. 21.
Higbie, K.J., Warren, R. (2013). Brown-Forman corporation and the distilleries industry. Johnson & Wales University, Providence, RI.