Heineken Case

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Heineken Brewing Company Case Study MBA650 Business Policy John Barber Abstract Heineken is a major competitor in the mass production beer industry. The firm is facing internal and external environment challenges which are affecting its sales and profitability. The corporation is involved in a competitive, concentrated, and differentiated industry that has allowed major rivals to achieve growth through mergers and acquisitions. The case study addresses the issues that the organization is encountering. The company is facing declining sales due to changing consumer tastes and increased competitive pressure. Heineken is attempting to increase sales and retain its position as a premium beer, but is faced with a lack of support from two…show more content…
With this, Heineken has been losing market share, revenue, and brand awareness by not utilizing effective advertising campaigns geared toward young Americans. By incorporating an effective marketing strategy, Heineken will be able to recapture Hispanic and young Americans, which will aid in the growth of the company. STRATEGIC ANALYSIS Porters Five Forces Threat of new entrants The global beer industry exhibits limited threat of new major competitors entering the established market. The major beer manufacturers have achieved economies of scale, strong brand recognition, process patents, and established distribution channels which limit the profitability potential for new organizations. Large scale beer manufacturing and distribution requires a vast amount of capital, and assets to produce and deliver quality products to the consumer. The cost to properly position a product, and gain market share, may be prohibitive for new entrants in an increasingly challenging global beer industry environment. The average cost of a 30 second commercial in 2011, ranged from $96,807 during primetime viewing to $3,100,000 during the NFL Super Bowl (Neilsenwire, 2012). Bargaining power of buyers Consumers have medium bargaining power. Purchasers have a considerable selection of differentiated product choices and brands sold through retail outlets. Beers separated into Anglo-American Style Ales, Belgian Style Ales, Stouts and

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