Adopting an International Approach to the Local MarketIntroductionA firm becomes international when it extends its activities or manages to sell its products into overseas markets (Kessapidou & Varsakelis, 2002, p. 268). The more a firm is involved in overseas markets, the greater the level of internationalisation. A successful internationalisation process requires a firm to adapt effectively to cultural settings of the target overseas markets through a process known as localisation (Nordea, 2003, p. 68). The purpose of this paper is to examine the process of takeover of French breweries by Vechtel, a Dutch brewery, during its internationalisation processes.
First, the paper examines three phases that occurred after Vechtel took over a French company. It further observes the extent to which stereotyping is evident in the thoughts and words of the Jean-Pierre Courbet and Jaap Harmelen, and the impact that the culture of these two individuals had on the success of the takeover of the French company. A brief comparison of the strategies adapted by Vechtel (Rotterdam HQ) and Brasseries Vechtel is given. An explanation is given of how these strategies are reconciled and how the two companies arrived at a common goal despite the existence of differences in their respective national cultures.
Finally, the paper explains how the overall process of internationalization of the Dutch company could have been improved. The purpose of including the above information is to identify cultural issues that organisations involved in international takeover may encounter and to reflect how the cultural issues can be effectively managed to achieve success in the internationalisation process. Phases of internationalisationThree distinct phases of internalisation occurred after Vechtel took over the French company.
The first phase involved creation of an atmosphere for cultural integration and effective communication. Vechtel made a radical restructuring of the management system. Some employees who had been working for the French company were dismissed and some replaced with experts from other Vechtel operating companies. However, some key positions remained with French employees, including Jean-Pierre Courbet’s position. Most of the key management personnel understood languages used by Dutch and French and thus, there were minimal communication problems. As Schraeder and Self (2003, p. 513) note, this phase was necessary to reduce communication problems and to create an atmosphere for cultural integration in the organisation.
The second phase involved reorganisation and integration of the functional structures and control systems. To deal with excessive financial number of breweries, deplorable sets of financial figures and overlapping parts in the new organisation, Vechtel closed some breweries and its revised brand range. This step was essential to create the identity of Vechtel as a brand within and outside the target market (Schraeder & Self, 2003, p. 513; Riad, 2007, p. 41). During the third phase, Vechtel evaluated the expected and actual outcomes of the acquisition.
Based on past experience, Vechtel revised the management structure through consultations, which increased involvement of Dutch employees in the organisation. The Dutch chief executive in the French branch, Jaap Harmelen, was replaced with a Dutch, Jean-Pierre Courbet. This phase helped to further enhance compatibility between the cultures of Vechtel and the French company. Generally, the three phases were essential in establishing cultural fitness between the two merging companies. Poor culture fit may contribute to failure of mergers and acquisitions that appear to be suitable and strategic as in the case of the merger between Monsanto and American Home Products which failed due to difficulties in trying to integrate the diverse cultures (Schraeder & Self, 2003, p.
513; Stahl & Voigt, 2004, p. 53).