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Submitted by oluwaloniyi on April 7, 2008
Category: Business
Words: 1541 | Pages: 7
Views: 156
Popularity Rank: 67,833
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Synopsis
Moet et Chardon, a leading champagne manufacture and Jas. Hennessy & Co, the world’s fourth largest cognac seller merged in 1971 and became the successful brand Moet-Hennessey making it one of the leaders in the luxury business. The similarities in both companies’ corporate strategies were of mutual benefit, thus the merger
Prior to the merger, Moet et Chardon had established itself as the worlds favorite champagne with its superior quality distinguished flavor as well as its seductive personality. In 1969 it ventured into the perfume market by acquiring 70% shares of Dior from the Boussac group. The acquisition was in line with Moet et Chardon trying to maximize Dior’s financial, luxury brand image and international sales distribution position. On the other hand, Hennessy was the leader in cognac by the virtue of the quality of its products. However the company was interested in a merger with a public company because of the older retiring generation owners of the company.
In 1973, Moet-Hennessey started producing a new sparkling wine with the label name “Domaine Chandon” and in 1978 expanded in the beauty products market when it acquired Roc Laboratories. Acquiring Schiefflein & Co. in 1980 cumulated in its expansion into the international market and in 1985, it started the manufacturing of “Petite Liqueur” - the world’s first sparkling liqueur. Other lines of expansion were the Dior line of women’s cosmetics and men’s fragrances thereby having a major market share in Europe, USA and the Far East.
Key Issues
In the three major segments in which Moet-Hennessey competed in, there were several key issues particular to each segment. The first segment, the champagne and wine products even though had the classic characteristics of a luxury product, it suffered from shortage of grapes because of the limited supply of raw materials.
The second segment, cognac and spirit product however had...
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