...PORTFOLIO ASSIGNMENT 1; GLOBAL FORCES AND THE WESTERN EUROPEAN BREWING INDUSTRY DATE OF SUBMISSION: 09/02/2012 1. (i) PESTEL ANALYSIS OF THE WESTERN EUROPEAN BREWING INDUSTRY The PESTEL framework provides a comprehensive list of influences on the possible success or failure of particular strategies (Johnson et al, 2008, p55). PESTEL stands for Political, Social, Technological, Environmental and Legal. Political- Governments in Europe were campaigning strongly against drunken driving. This affected the propensity to drink beer in pubs and restaurants. Economic- Some low consumption European markets have been showing good growth. Pubs have suffered as a result of large supermarket chains such as Tesco and Carrefour who often use cut price on beer to lure people into their shops. The result was that an average of about 50 pubs closed per week during the recessionary year 2009. Social- There was increasing awareness of the effects of alcohol on health particularly in the UK. This led to a growing hostility to excessive alcohol consumption in pubs. Beer consumption in the UK as well as in Germany began to fall as a result of this. Wines were becoming increasingly popular as Europe was turning off beer. There was an increasing demand for Exotic imported beer more especially in Belgium, Denmark, Finland and the Netherlands according to Table 2 of the case study. (ii) FIVE FORCES ANALYSIS OF THE WESTERN EUROPEAN BREWING INDUSTRY According to Johnson...
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...this, the firm strategy has to be immediately fixed and improved to move in conjunction with the needs of the external environment (Stead et al., 2004). Understanding the importance of strategic management, the report’s purpose is to exploit supplied information from the case study “Global forces and the European brewing industry” to carry out the external environment analysis which uses PESTEL and Five Forces Models. Basing on the achievements from the industry analysis, a further analysis called strategic groups which based from strengths and weaknesses of four brewing firms is made to categorize each kind of firms. References from books, journal articles were used to providing proper prove for supporting the trend in the case. INTRODUCTION The case study reflects how international forces have influence on European brewing industry as well as how such breweries firms has tried to overcome the difficulties. Despite of the fact that the European governments have enforced some restrictions and carried out a campaign against alcohol, these firms still tried their best in order to increase growth rate via alliances, acquisitions and closures within the brewing market. Firms are focusing on broadening their appearances in other marketplaces while several of firms are mustering on innovating and branding their products. Furthermore, they also pay much attention to cut down cots, including...
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...Porters Five Forces in Western European the Brewery Industry Porter’s five forces framework helps identify the attractiveness of an industry. The five forces are as follows; Threat of Entry, Threat of Substitutes, Power of Buyers, Power of Suppliers and the Extent of Rivalry between competitors (Johnson, Whittington and Scholes 2011, p.54). These five forces help to organize an industry’s structure. Originally, the five forces framework helped to identify industry structures that offered good profit potential. This was based on the belief that where the five forces are high, these industries are not attractive to compete in. Firstly, we will provide a brief background to the beer industry in Western Europe and then implement the five forces framework to assist in deciding the attractiveness of the industry. Beer Industry Background There is a long history of beer. As said by Benjamin Franklin; “Beer is proof that God loves us and wants us to be happy”. Beer is one of the world’s oldest alcoholic beverages. It has a lengthy history and can be dated back to when the main method of making beer was by way of home brewing. With no sign in beer declining, it could be presumed that beer is in the mature stage of the product life cycle. We are focusing on the beer industry in Western Europe, choosing to apply the five forces to the larger brewers who have significant operations in the industry; Heineken, Carlsberg and A-B InBev?.... Competitive Rivalry within the Industry This...
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...most widely consumed alcoholic beverage, and is the third-most popular drink overall, after water and tea. It is thought by some to be the oldest fermented beverage. The brewing industry is a global business, consisting of several dominant multinational companies and many thousands of smaller producers. We estimate that the global beer market represented approximately 1.85 billion hectoliters in 2010, producing total global revenue of approximately $160 billion. The most dynamically growing regions have been Asia Pacific and Africa/Middle East, which have seen the highest real GDP growth. The highest density of breweries in the world, most of them microbreweries, exists in the German Region of Franconia, especially in the district of Upper Franconia, which has about 200 breweries. In 2012 the four largest brewing companies controlled 50% of the market: Anheuser-Busch InBev, SABMiller, Heineken International, Carlsberg Group. Using the PESTEL analysis, the political factors are the actions against overconsumption and the restrictions by government (prohibition, taxes), the economical factors are the cost reduction, rise prices of packaging, and economy crisis. The fitness and health, the face of customers drink more wine than before, and the demand for flavered beers are the social factors of beer industry. The technological ones are the new brands and flavors, the innovation in beer production, increase in efficiency, and the centralization of production and administration...
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...Global forces and the European brewing industry Mike Blee This case is centred on the European brewing industry and examines how the increasingly competitive pressure of operating within global markets is causing consolidation through acquisitions, alliances and closures within the industry. This has resulted in the growth of the brewers’ reliance upon super brands. In the mid 2000s the major centre for production of beer in the world was Europe; its production was twice that of the USA, which in 2003 was the world’s largest beer-producing country. In the alcoholic drinks sector beer sales are dominant: total sales across the world accounted for 74 percent of all alcoholic purchases (Euromonitor 2002). Although the European market as a whole is mature, with beer sales showing slight falls in most markets, Datamonitor 2003 reported that the alcoholic beverage sector grew at an annual rate in value terms by 2.6 per cent year between 1997 and 2002. Table 1 European beer consumption by country and year (000 hectolitres ) |Country | |1980 |1997 |1998 |1999 |2000 |2001 |2002 | | | | | | | | | | | |Austria | |7651 |9145 |8736 |8810 |8762 |8627 |8734 | |Beigium ...
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...Question 1 (i): Using the data from the case (and any other source available), carry out for the European brewing industry a PESTEL analysis. What do you conclude? Beer has been a part of the social fabric of cultures around the world for thousands of years. Even today beer ranks as the third most popular beverage in the world next to water and tea. Considered one of the oldest drinks, the origin of beer dates back to 6000 B.C. With low-cost strategies and lack of marketing and product innovations all created a very stable situation guaranteeing high returns on investments for most breweries in Europe. However, this situation has been changing dramatically and the industry has witnessed different brewing styles over the last decade. The market entry of large multinational breweries resulted in shrinking demand due to changing consumer preferences, the emergence of more aggressive competitive strategies and rapid changes in important distribution channels have created growing competitive pressures for European breweries. An industry that was used to stability must now find its way in an increasingly turbulent market environment. First of all, I need to evaluate the macro environment of the industry. The most suitable tool to analyze the broad macro-environment is the PESTEL analysis. In the PESTEL analysis environmental influences are categorized into political, economical, social, technological, environmental/ecological and legal aspects. It helps to identify how future trends...
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...1 3 PEST analysis 3 Porter’s 5 forces 5 Question 2 6 Michael Porter's Generic Competitive Strategies 6 Threshold Resources 7 Core Resources 7 Question 3 8 Ansoff Matrix 8 Market penetration 9 Product development and Market development 9 Organic development 10 Question 4 10 Johnson and Scholes framework of Suitability, Feasibility and Acceptability 11 SABMiller’s strategic priorities: 11 Constraint of acquisitions 13 Reference 14 Question 1 Using information exclusively from the European Brewing Industry and SABMiller cases as supplied and appropriate models from the course analyse the external environment in which SABMiller operated in 2010. After conducted a series of cross broader mergers and acquisitions SABMiller successfully become the second largest brewer by volume in the world. SABMiller is now operating worldwide: Latin America, Europe, North America, Africa, Asia, and South Africa. Nevertheless, the environmental condition and potential of growth vary between each region (Blee and Whittington, 2010). European brewing industry was one of the world’s major beer consumption regions. Recent years, the market has come into mature stage of the industry life cycle and demand is now decreasing (Euromonitor, 2010). PEST analysis and Porter five forces model are the appropriate methods to evaluate external environment on European Brewing Industry (Johnson, 2002). PEST analysis ...
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...Company Overview 3 Executive Summary 5 Mission Statement 6 Vision Statement 6 Objectives 6 Strategies 6 Products 8 External Assessment 9 Competition 9 AB/InBev 9 SABMiller 11 Heineken 12 Craft Beer 13 External Trends 14 AB/InBev Trends 14 Water Management 15 Energy Use 16 Recycling 16 Government/Political/Legal 17 Economics 17 Internal Assessment 18 Growth Strategies 24 AB/Inbev Strategies 25 SAB Miller Strategies 26 Heineken Strategies 27 Craft Beer Strategies 28 Growth Strategy Advantages v Disadvantages 28 Space matrix 29 SWOT Analysis 30 IFE Matrix 31 Company Overview As the largest brewer in the world, Anheuser-Busch InBev (AB/InBev) has had quite an intense but creative history. In 1852, George Schneider, St. Louis brewer and saloon operator opened the Bavarian Brewery. Four years later, he expanded into a larger location for his brewery to operate due to positive production. However, shortly after the second opening financial problems resulted in Schneider having to sell his brewery to various owners. In 1860, as the brewery reached a worsening financial position, William D’Oench, a local pharmacist, and Eberhard Anheuser, a wealthy German-born soap manufacturer, purchased the brewery and saved it from bankruptcy (Anheuser-Busch...
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...company History of the company II - Environmental Analysis 1 - Economic forces 2 - Political & Legal forces 3 - Demand a)Total size of market b)Market share c)Characteristics of demand 1-When 2-where 3-how often costumers buy 4 - Competitive forces 5 - Technological forces 6 - Social/Cultural forces III - SWOT Analysis A. Strengths and Weaknesses B. Opportunities and Threats IV - Marketing objectives V - Marketing strategies A. Target markets B. Marketing Mix 1-Product 2-Pricing 3-Distribution 4-Promotion VI - Implementation - Marketing structure Bibliography I. Intro on company Heineken N.V. has wide international presence through a global network of distributors and breweries. It owns and manages one of the world’s leading portfolios of beer brands and is one of the world’s leading brewers in terms of sales volume and profitability. Its principal international brands are Heineken and Amstel, but the group brews and sells more than 170 international premium, regional, local and specialty beers and ciders, including Cruzcampo, Birra Moretti, Foster's, Maes, Murphy's, Newcastle Brown Ale, Ochota, Tiger, Sagres, Star, Strongbow and Zywiec. [3] Heineken has the widest presence of all international brewers, thanks to their global network of distributors and 125 breweries in more than 70 countries. The Heineken...
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...MarketLine Industry Profile Alcoholic Drinks in China February 2012 Reference Code: 0099-2201 Publication Date: February 2012 WWW.MARKETLINEINFO.COM MARKETLINE. THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED China - Alcoholic Drinks © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED 0099 - 2201 - 2011 Page | 1 EXECUTIVE SUMMARY Market value The Chinese alcoholic drinks market grew by 9.8% in 2011 to reach a value of $96.5 billion. Market value forecast In 2016, the Chinese alcoholic drinks market is forecast to have a value of $145.6 billion, an increase of 50.9% since 2011. Market volume The Chinese alcoholic drinks market grew by 5.7% in 2011 to reach a volume of 53.2 billion liters. Market volume forecast In 2016, the Chinese alcoholic drinks market is forecast to have a volume of 67.6 billion liters, an increase of 27.1% since 2011. Category segmentation Beer, cider & FABs is the largest segment of the alcoholic drinks market in China, accounting for 65.1% of the market's total value. Geography segmentation China accounts for 38.7% of the Asia-Pacific alcoholic drinks market value. Market share SAB Miller is the leading player in the Chinese alcoholic drinks market, generating a 17% share of the market's value. Market rivalry Growth within the alcoholic drinks market has been robust and steady within the last few years, which tends to reduce the rivalry to some extent and attract...
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...Year of establishment and very brief history Heineken International is a Dutch brewing company, founded in 1864 by Gerard Adriaan Heineken in Amsterdam. It owns over 190 breweries in more than 70 countries and employs approximately 85,000 people. Cruzcampo, Tiger Beer, Żywiec, Starobrno, Zagorka, Birra Moretti, Ochota, Murphy’s, Star and Heineken Pilsener are some of it’s well known brews all over the world. Milestones of Heineken history; 1864 Gerard Adriaan Heineken buys the Haystack brewery on February 15th 1873 On January 11, HEINEKEN’s Bierbrouwerij Maatschappij N.V (HBM) is established. 1889 HEINEKEN is honored with the "Diplome de Grand Prix" at the World’s Fair in Paris 1900 HEINEKEN imports first beer into Africa. 1932 HEINEKEN co-founds Malayan Breweries and starts to brew Tiger for the first time 1933 After 13 years of prohibition, Heineken® sets foot on American soil 1937 HEINEKEN’s Nederlandsch-Indische Bierbrouwerij Maatschappij, Multi Bintang, begins operation 1939 HEINEKEN is listed on the Dutch stock exchange 1946 HEINEKEN enters Nigeria 1968 HEINEKEN acquires Amstel, its major rival in The Netherlands 1974 HEINEKEN acquires a majority stake in the Dreher Group 1975 A new Dutch brewery opens in Zoeterwoude, the largest modern brewery in all Europe at the time. 1991 The former Amsterdam brewery on the Stadhouderskade is converted to a Heineken museum which was renamed Heineken Experience in 2001. 2003-20010 HEINEKEN acquires Brau Union...
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...breweries at Shimla, Murree,Rawalpindi and Mandalay. Another entrepreneur, H G Meakin, moved to India and bought the old Shimla and Solan Breweries from Edward Dyer and added more at Ranikhet, Dalhousie, Chakrata, Darjeeling and Kirkee. In 1937, when Burma was separated from India, the company was restructured with its Indian assets as Dyer Meakin Breweries, a public company on the London Stock Exchange. Following independence, in 1949 N.N. Mohan took over management of the company and the name was changed to Mohan Meakin Ltd. The company continues to produce beer across India to this day and Lion is still available in northern India. Lion was changed from an IPA to a lagerin the 1960s, when due to East European influence, most brewers in India switched from brewing Ales to brewing lagers. Today no brewer in India makes India Pale Ale. All Indian beers are either lagers (4.8% alcohol — such as Australian lager) or strong lagers (15 % alcohol - such as Australian Max super strong beer). In various parts of north-eastern India, traditional rice beer is...
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...SABMiller, the world’s second largest brewer. Grolsch was the 21st largest global beer brand, sold 51.5% of its volume in international markets, and exported to 70 countries. However, its poor profitability in international markets, four countries alone accounting for two-thirds of foreign sales, and churn of markets and distribution partners raised concerns about the company’s international strategy and execution. Grolsch’s 60 years of history in foreign markets provides a rich backdrop to introduce a range of international strategy topics including: performance assessment, rationale for expansion, market selection, and choice of entry mode. Suggested Assignment Questions 1. Why did Grolsch globalize, and how well has it performed internationally? 2. What are the key elements and limitations of its emphasis on adaptation, in particular? 3. What lessons does Grolsch’s history afford about where to compete? What, specifically, do you think about the MABA process? 4. What lessons does Grolsch’s history suggest about how to compete in the markets targeted— particularly about modes of entry? 5. What other changes would you suggest to Grolsch's historical strategy? 6. Will the merger with SABMiller add value—or will it be a win-lose deal? Teaching Objectives This case is intended as an introductory lesson to illustrate how a company develops and executes its global strategy. It affords instructors the opportunity to raise the following...
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...THE GLOBAL BRANDING OF STELLA ARTOIS Professors Paul W. Beamish and Anthony Goerzen prepared this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. This material is not covered under authorization from CanCopy or any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. One time permission to reproduce granted to Interpretive for use in CountryManager by Ivey Management Services on Aug. 1, 2007. Copyright © 2000, Ivey Management Services Version: (A) 2006-08-29 In April 2000, Paul Cooke, chief marketing officer of Interbrew, the world’s fourth largest brewer, contemplated the further development of their premium product, Stella Artois, as the company’s flagship brand in key markets around the world. Although the long-range plan for 2000-2002 had been approved, there still remained some important strategic issues to resolve. A BRIEF HISTORY OF INTERBREW Interbrew traced...
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...History and Economy of the Czech Republic This paper is on the Czech Republic economy. I will first introduce the country with detailed information on the Czech history from past to present. Then, I will talk about their economy during communism and post-communism. This will show how the country and its economy has changed dramatically during and after communism. Transitioning from that, later on in this paper will exemplifies the Czech Republic economy in exquisite details from the past 25 years to now; post-communism. The term "Czech" refers to the cultural characteristics of the Czech-speaking inhabitants of the Czech Republic, which includes Bohemia; the larger western part. The republic is bounded by Poland on the north, Germany on the northwest and southwest, Austria on the south, and the Slovak Republic on the east. The crowning of the first Bohemian king took place in 1085. And the first university in central Europe was founded in Prague in 1348. The development of Czech national culture came to a temporary halt in 1620, when the Czech's social classes possessing political rights were defeated in the Battle of White Mountain. The Bohemian kingdom lost its independence, and its provinces were declared the hereditary property of the Hapsburgs. A period referred to as "the darkness" lasted until the end of the eighteenth century, when the Czech national revival the formation of the modern Czech nation began. The area of today’s Czech Republic used to be an industrial...
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