...BACHELOR OF ARTS IN BUSINESS STUDIES UNIVERSITY OF GREENWICH NAME : STEPHANIE ROBERTS COURSE NAME: MANAGING STRATEGY COURSE CODE: BUSI1484 PORTFOLIO ASSIGNMENTS: 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...
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...with 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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...SABMiller case study 2009. SIAMAK MOULAEIFAR 20207133 Introduction: SABMiller (SAB) plc is the second largest brewers in the world with brewing interests or distribution agreements in over 75 countries across six continents. The group’s brands include premium international beers such as Miller Genuine Draft, Peroni Nastro Azzurro and Pilsner Urquell, as well as an exceptional range of market leading local brands also SABMiller is one of the world’s largest bottlers of Coca-Cola products. (The SAB Miller, 2009) Exhibit below provides a summary scope of SABMiller operation today. (Below figures refer to year ended 31 March 2009) Source: www.sabmiller.com The purpose of this report is to discuss the strategic position of SABMiller in 2009 (SWOT analysis), the SABMiller acquisition strategy in particular the acquisition of Miller in 2002 along with issues rose in acquisition. It will also set out to recommend a strategic development plan for future. The strategic position of SABMiller in 2009 Understanding the strategic position is concerned with identifying the impact on strategy of the external environment, an organisation’s strategic capability (resource and competent) and the expectations and influence of stakeholders. (Johnson & schools & Whittington, 2008) The strategic position that SABMiller has chosen to follow is to continue to protect and further develop its operations, whilst investing for growth in its international beer business, several...
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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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...Craft Beer Brewing Paper Two: Cause and Effect Fermented beverages have played a part in every civilization. The evolution of fermentation by human hands has been a diverse one. From the first fermented beverage, mead, found in ancient Greek, Egyptian, and Sumerian records to today’s micro-brewed barley-based ales, fermented beverages have seen tremendous growth. Today, micro craft breweries are displacing the competition from big brewers in America (Kain n.p.). The number of craft breweries in America has more than doubled since 2011 due to ease of access to the equipment, and craft breweries are creating thousands of jobs, contributing millions of dollars to the U.S. economy, and providing enthusiasts with a wide variety of beers. (Watson n.p.). Being immersed in craft beers over past few years, I learned about the brewing process and started home brewing as a hobby. Prohibition was responsible for shutting down of many small breweries around America. Upon lifting the prohibition, federal government regulated the beer market with an iron fist. Smaller producers of beer were not successful because the regulation clearly favored the large beer producers. When Carter Administration deregulated the beer industry in 1979, it made the market available to craft brewers. Since then, craft beer exploded in popularity and has had an amazing impact on the industry (Kain n.p.). Beer drinkers around the nation love to talk about beer, the different varieties offered by many breweries, and...
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...Western European Brewing Industry Case Study Question: 2. For the breweries outlined above explain: (a) How these trends will impact differently on these different companies; and (b) The relative strengths and weaknesses of each company. (A) Impact of these trends. 1. InBev (Belgium/brazil) • INBev is a merger of two companies Anheuser and Busch and hold the top spot in the world’s top 10 breweries. • INBev is known for being the world’s largest brewing company through mergers and acquisitions and has a 25 percent global market share • By diversifying its enterprise into many countries outside of Europe (where the consumption of beer was increasing), has helped the companies continued success. • INBev are geographically diversified with a balanced exposure to developed and developing markets and leverages the collective strengths of its approximately 155,000 employees based in 25 countries worldwide. • The corporation has a significant position in the Latin American market. • INBev occupies 50% of the US market and 50% of the Mexican market. • The company is established in countries where the consumption of beer is rising. • Revenue of 47 billion US dollars in 2014 • INBev has around 200 beer brands and continues to forge strong connections with consumers. The global brands included are Budweiser, Corona, Stella Artois, Beck’s, Leffe, Hoegaarden, Bud Light, Skol, Brahma, Antarctica, Quilmes, Victoria, Modelo Especial, Michelob Ultra, Harbin, Sedrin, Klinskoye...
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...supply the hops, barley, corn and rice used to produce beer. In 2008, there were 2,053 companies that purchased these ingredients. The overall beer industry sold nearly 206 million barrels of beer in 2009. For major brewers, the volume of ingredients purchased, the large number of farmers available to purchase the ingredients from, low switching costs on the part of the brewer, and inability of the farmers to forward integrate, supplier power in considered low in regard to the major brewers. Craft brewers who purchase fewer ingredients and sometimes more specialized ingredients may cause supplier power for this segment of the industry to be somewhat higher; yet, overall, suppliers have put limited pressure on price and supplier power is LOW. There are only a few large suppliers of aluminium cans, plastic and glass bottles, which increase the supplier’s bargaining power. However, taken into consideration largest brewery companies existing we can assume that the suppliers of those goods have a incentive in taking care those as a customer and will therefore provide them with the best possible price, in order to keep them as a customer. Competitive pressure from supplier bargaining power is considered to be generally low with respect to the industry as a whole. However, due to the high commodity raw material exposure—around 58% of industry cost of goods sold—which include packaging (glass/aluminum/cardboard), barley, sugar, malt, corn, rice, wheat, hops and preservatives, so the uncertainty...
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...ZAMBIA CENTER FOR ACCOUNTANCY BACHELOR OF ARTS IN BUSINESS STUDIES. NAME: CANDIDA PEREIRA STUDENT NUMBER: COURSE: MANAGING STRATEGY BUSI 1482 LECTURER: Ms CHANAKIRA GLOBAL FORCES AND THE EUROPEAN BREWING INDUSTRY Question 1 part 1 “The PESTEL framework categorizes environmental influences into six main types: political, economical, social, technological, environmental and legal” (Johnson et al.,2010, p.59). Political Government restrictions have led to a decline in beer consumption in consequence of the awareness of problems caused by alcoholism. These problems include drunken driving and binge drinking which are great inhibitors of health and wellbeing. Economical Because of government restrictions more beer volumes are being sold through supermarkets than on premises, despite this sale volumes continue to rise with the introduction of premium brands onto the market. Large supermarkets reduce their prices to attract more buyers and yield a higher turnover in an effort to achieve economies of scale. Other marketing strategies like mergers and acquisitions are being used by leading brewers to gain more control of the market. Brewers prices are influenced by their production costs most specially packaging costs which are high for example Heineken would have sell their...
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...MOUNTAIN MAN BREWING COMPANY Bringing the Brand to Light CASE STUDY ON BRAND MANAGEMENT AND PRODUCT INTRODUCTION Mountain Man a well-known brewing company is planning to introduce a new product line of beers. This case analysis and decides whether Mountain Man should go with its product introduction or not considering its financial health and brand value. Narendhiran S 2012H149236P 1. INTRODUCTION Company: Mountain Man Brewing Company is a family owned brewery located in West Virginia, established in 1925.Mountain Man brewed only one beer Mountain Man Lager also known as “west Virginia’s Beer” and a “Working man’s beer”. The company is experiencing a decline in sales by 2% due to changes in the preferences of beer drinkers. Present Position in the Market: Product – Mountain Man Lager, Bitter flavoured beer with slightly higher than average alcohol content and darker color. To accentuate its dark color, the beer was packed in a brown bottle, with its original 1925 design of crew of coal miners printed in the front. Mountain Man’s main differentiation from its competitors is its product. Price – Mountain Man Lager was priced similar to its competitors. Its price is $2.25 for a 12 ounce serving draft beer in a bar and $4.49 for a six-pack in a local convenience stores. Place – Their primary market was in East Central Beer Region – Illinois, Indiana, Michigan, Ohio and West Virginia. MMBC’s beer is mainly sold in liquor stores and super markets. Promotion – MMBC did not...
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...because monetary rewards offset the agent’s risk and unpredictability of its income stream (Jensen and Meckling 1976). Despite general support for this logic, researchers have been puzzled by a substantive dilemma: Incentives often do not work. Benabou and Tirole (2003); Bouillon et al. (2006), and others have found that agents do not always respond positively as incentives increase. Other findings indicate that monetary incentives are sometimes demotivational (Ryan and Deci 2000), lead to dysfunctional activities by rewarding the wrong behavior (Baker 2002; Oyer 1998), are an inefficient control mechanism (Akerlof and Kranton 2005), promote shirking rather than compliance (Gibbons 1998), and are unpredictable under turbulent industry conditions (Prendergast 1999). The idea that incentives often do not work has been substantiated in the practitioner literature as well. Kesmodel (2008) reports in the Wall Street Journal that even dominant firms find it difficult to structure effective incentive portfolios with the resellers of their products. These and other findings motivate our research question: When do incentives work in a channels of distribution context? The question of when principal-designed incentive portfolios work requires examination of the differences that exists between two key marketing channel governance outcomes: compliance and active representation. Of interest is the extent to which a principal’s (e.g., channel supplier’s)...
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...Case Study – Corona Beer (Modelo) Foreign Market Entry and Diversification BUS599 – Strategic Management Identify and discuss the trends in the global beer markets. Beer markets have been primarily a local industry, with only a few of the companies having international presence. “Beer was first brewed in the 14th century in Europe and developed different in every country in order to address local tastes and specific recipes” (Thompson, Strickland, & Gamble, 2010). There was an increase in industry consolidation, a development that took off in North America and Western Europe. “The consolidation began to include brewing companies in the growth markets of Eastern Europe, Asia and Latin America” (carlsberggroup.com). “The United States had the largest beer market in the world until China surpassed in 2003” (Thompson et al, 2010). In the past ten years, global consolidation has accelerated. Due to lack of transportation networks made exportation impossible and brewing remained a local industry. Other countries like Italy and France, they preferred wine over beer for consumption and then you had Germany and Ireland, who both have a few national beer brands. The trend of consolidation by national leaders started expanding in the 1990’s; “Interbrew acquired several breweries in 20 countries and expanded its sales to 110 counters, leaving local managers to control the local brands” (Thompson et al, 2010). The top 10 brewers accounted for 34% of the...
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...[pic] ASSIGNMENT SUBMISSION FORM Treat this as the first page of your assignment Course Name: Competitive Strategy Assignment Title: Project – Globalization Problems faced by Starbucks – Focus on Europe (Let us not waste paper, please continue writing your assignment from below) Table of Contents Executive Summary 3 Industry structure – Porter five forces analysis 4 Company background 5 Globalization strategy [1995-2008] 9 Performance in EMEA 11 Findings and analysis 13 References 27 Executive Summary This study is focused on Starbucks, the world’s largest coffeehouse company. The company has the knack of finding the magic formula for every aspect – be it customer satisfaction, innovative marketing or smart partnerships. Given the brilliant performance that Starbucks found in the US, success should have been a foregone conclusion in other geographies as well. Despite all the positives, it could not replicate the same degree of success in Europe as it enjoyed in the US. This study has analyzed the factors which might be held accountable. The aggressive policy of opening stores worldwide to achieve inimitability of its business model, loss of control over the cost of operations, the stock market’s notional correlation of success with number of stores, over-reliance on Seattle management causing a lack of decentralization of key decision-making power...
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...Economics hans_haanappel@planet.nl I. MANAGEMENT SUMMARY SABMiller plc (www.sabmiller.com), publicly listed on the London Stock Exchange (LSE:SAB) and Johannesburg Stock Exchange (JSE:SAB), and available via the US OTC market (OTC:SBMRF), is a global brewing and bottling group. Founded in South Africa in 1895, SABMiller today is an international enterprise with a market value of £21 billion, producing a range of premium beers, including six numbering amongst the top 50 brands in the world: Pilsner Urquell, Peroni, Miller Genuine Draft, Miler Lite, Castle and Grolsch. The Grolsch brand, previously purveyed by 392-year-old Royal Grolsch NV, was the target of a notable acquisition in the brewery industry in November of 2007, with SABMiller paying a premium €816 million ($1.2bn; £583m), an 84% premium over Grolsch’s then share price. A premium price for a premium band, the acquisition of Grolsch added a northern European product to SABMiller’s portfolio and expanded its native and foreign market share. Riding a wave of merger mania in the brewing industry, hindsight and the global recession ask: was it worth it? This case study takes a close look at the fundamentals in addressing this question. Keywords SABMiller, Grolsch, beer, breweries, acquisitions, valuation, case study II. KEY DYNAMICS Page 1 of 10 Erasmus RSM MFM: Mergers & Acquisitions ‘SABMiller Acquisition of Royal Grolsch NV’...
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...Summary II. EXECUTIVE SUMMARY: 4 III. COMPANY BACKGROUND: 5 IV. SITUATION ANALYSIS 5 A. External Audit 5 1. Industry Overview and Analysis 5 2. PESTLE 6 3. 5 Forces of Porter: 7 B. Internal Audit: 8 1. Marketing Systems 8 2. Marketing Activities 11 C. Portfolio Analysis: 13 1. Ansoff Matrix 14 2. BCG Matrix 15 3. McKinsey: 16 D. Competitive Advantage: 17 E. Analysis Conclusion: 17 V. MARKETING STRATEGY: 18 A. Where do we want to be? 18 B. Segmentation, Targeting and Positioning: 18 1. Segmentation: 18 2. Targeting: 19 3. Positioning: 19 C. Competitive Strategy 20 D. Marketing Mix: 21 1. Product 22 2. Price 22 3. Place: 23 4. Promotion 23 5. People 24 6. Physical Evidence 24 7. Process 25 VI. IMPLEMENTATION: 26 A. Product development and diversification 26 B. Price 27 C. Internationalization and distribution networks: 28 D. Promotion: 28 E. People: 28 F. Budget: 29 VII. CONTROL AND MONITORING: 30 VIII. APPENDIXES 31 EXECUTIVE SUMMARY: Starbucks Corporation, currently the global leader in the coffee business, started off as a coffee bean roaster and retailer in 1971 in Seattle. Since then the firm has established 20,891 stores across 64 countries under the leadership of Howard Schultz. In the last decade, Starbucks has resorted to aggressive expansion making it the leader on the coffee shop market. However, increased domestic competition, recession and rise...
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...SABMilier Aidan McQuade South African Breweries grew on the basis of its strength in developing markets, first in Africa and then in other parts of the world. Following pressure from investors to acquire a brewery in a developed market it acquired Miller in 2002 to become SABMiller and the second largest brewer by volume in the world. This case study explains the business's development. It shows how the strategy has changed with time and circumstances and provides the opportunity to consider its future at both the corporate and competitive strategy levels. ••• Introduction In 2007 SABMiller, the renamed South African Breweries following its acquisition of the American brewer Miller in 2002, had become the second largest brewer by volume in the world. It still vied with Anheuser- Busch. its principal competitor; having dropped back to third place in 2005 it reclaimed the number two position following its conclusion of a US$7.8bn (~6.2bn) deal to take over Grupo Empresarial Bavaira, South America's second largest brewer. In the 2006 annual report SABMiller outlined four strategic priorities upon which its success depended: 'Creating a balanced and attractive global spread of businesses .... Developing strong relevant brand portfolios in the relevant market .... Constantly raising the performance of the local businesses . . . . Leveraging our global scale.' This statement of strategy may be seen as a synthesis of the learning the company has developed...
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