1、HEINEKEN CASE STUDY.OverviewCorporate Objective and goalsbeer industry overviewProblems5 forcesSWOT anlaysisValue chain analysisSolutions.Heineken Overviewone of the worlds leading brands 130 years.Number 2 imported beer in U.S.Number 1 in Europeglobal network of distributors and 115 breweries in mo

2、re than 65 countriesPremier brands Heineken, Amstel Light.Organization goals and objectivesAims for sustainable growth as a broad market leader and segment leadershipExpand and optimize product portfolioembraced innovation as a key component of their strategy in the areas of production, marketing, c

3、ommunication and packaging. Goal is to grow the business in a sustainable and consistent manner, while constantly improving profitability.Priority to reach goal1. to accelerate sustainable top-line growth. 2. to accelerate efficiency and cost reduction. 3. to speed up implementation: we commit to fa

4、ster decision making and execution. 4. to focus on those markets where we believe we can win. .Problem Losing Import beer market share .Problem: The maturing competitive Beer IndustryIntroductionEmergenceMaturityDeclineDemand (units/year)Time.Beer Industry Overview.Beer Industry Overview37% of U.S.

5、adults are beer drinkersBeer is the most widely purchased alcohol beverageBeer industry is projected to grow steadily.CompetitionBasically its “eat or be eatenEvery company is just trying to strengthen their global position any way possibleBiggest rivals include InBev and Grupo Modelo.Mergers and Ac

6、quisitionsSouth African PLC combined with MillerInterBrew and AmBev merged in 2004, and now acquired Anheuser-BuschCoors acquired MolsonAnheuser-Busch in partnerships with Grupo Modelo and Tsingtao.Business Strategy of the IndustryGrow externally to strengthen the position of the company in develope

7、d markets as well as maximizing potential for profit in high-growth marketsBasically do whatever is necessary to get your company represented around the worldHeineken was the pioneer of this strategy, becoming the first brewer to cut deals to distribute worldwide.Industry OutlookBigger brewers acqui

8、ring smaller brewers all over the world“The era of global brands is coming. Alan Clark, SABMillerMarket for premium beer will expand 84% by 2021.Value Chain Analysis(Primary Activities).Value Chain Analysis(Secondary Activities).Porters 5 Forces of competition.Threats of substitutesThreats of new en

9、try very little technical composition of beersGrowing appreciation for wine$250 million needed to build 4 million barrel breweryEntry is risky since not many alternative uses for breweriesNo new entrant in beer industry has cracked the top 3 sellers since WWII.Porters 5 Forces of competition.Bargain

10、ing Power of BuyersBargaining Power of Suppliers No loyalty to any particular brandDemand “beer is inelastic: E=-0.7Demand “Budweiser is elastic: E=-5.0 fewer brewers and Larger plants170 Horizontal mergers between 1950-1983Rising cost of key commodities like grain, glass and aluminumMany Buying sup

11、plier of inputs (wheat field)Porters Five Forces of competition(contd).Porters Five Forces of competition (contd) Rivalry between established competitors1947: Top 5 firms -19% of market in the U.S. 2001: Top 5 generate 87% of the market in the U.S.Highly competitive industry, many brewers leave the

12、industry losing $Lost of advertising for product differentiation.SWOT AnalysisStrengthBrands in over 13 marketsVery DifferentiatedGlobal brand/pioneer of international strategyHas made many acquisitions with national breweriesBottle Recognition and different dispensing instrumentsGreen BottleMini ke

13、g.SWOT AnalysisWeaknessConservative/”Play it safe” cultureStruggle to obtain large breweriesNot drank by younger beer drinkersAlthough consumption age has dropped from 40 to 30 Price when compared to U.S. domestic beers$10 per six packHeineken$7 per six pack-Domestic.SWOT AnalysisThreatsIncrease in

14、Drunk-driving lawsCompetitors increasing market share U.S. IndustryMergers and acquisitions of other breweriesOther Breweries are becoming much larger than Heinekens Brewery“In danger of becoming a tired, reliable, but unexciting brand”John A. Quelch.SWOT AnalysisOpportunityLow calorie beerSociety i

15、s pushing for a “healthy” beerRussia/AsiaPopulation increasing dramaticallyHave greater market shareHispanic consumers are growing rapidly U.S. Industry.U.S. Population Growth.Financial Information200520062007ROE21.1%27.0%15.5%EPS1.711.902.29Interest Ratio14.819.722.7Liquid Ratio.901.09.95.Solutions

16、Need to grow in the U.S. industryIncrease advertising on Tecate and Dos EquisKeep advertising to young beer drinks & Hispanic populationTap into beers with fewer calories and lower carbohydrates (50% of beer market)Sustain global competitionKeep buying more national breweries globallyIncrease awareness of all national breweriesCant obtain .RecommendationsIncrease AdvertisingAdvertising toward young people Spanish-language advertisingNational brandsIncrease presence in convenient storeVertically IntegrateMake own Ingredients