HEINEKEN CASE STUDY 1. What strategy does Heineken follow in the global beer market?
The strategy that Heineken uses is that of differentiation. This strategy gains market share and competitive advantage by distinguishing their products from their competitors through excellent design. A U.S. wholesaler recently asked a group of marketing students to identify a group of beer bottles that had been stripped of their labels. The stubby green Heineken bottle was the only one among the group that showed an instant recognition. This strategy also focuses on high awareness, easy accessibility, and new products. Heineken spent a lot of money on the launch of Premium Light; the first time that brewer had created an extension of its flagship
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Such cross border deals have provided significant benefits to the brewing giants. This has given them ownership of local brands propelling them into dominant market positions around the world as global brands sell at significantly higher prices and the margins are much better as compared to the local beers.
3. What changes has Heineken made that will help it deal with its challenges?
Some of the changes that Heineken has implemented during the past few years include the following: For the first time in the history of the company, the CEO is not a family member. Van Boxmeer was appointed CEO although the family still maintains the controlling share of the company’s stock. They developed a plan called Fit 2 Fight which made several changes. Most of them aimed at streamlining management. They cut the executive board from 5 members down to three. The new board is made up of the CEO, COO, and CFO. The change is expected to assist the company in thinking about the steps that it needs to take to win over younger customers across different markets whose tastes are still developing. Heineken also created management positions that would be responsible for 5 different operating regions and nine different functional areas. These positions were created to more clearly define different spheres of responsibility. The management group was cut from 36 to 13 members in order to speed up the decision making process. Also, the
When assessing the economic damage to due to Paul Thayer and those that he tipped off about the acquisition of Campbell Taggart, it should be noted that some argue that this kind of insider trading circulates information and forces the stock to its “true value.” If we assume this argument to be flawed, then part of Anheuser-Busch stock dip after the announcement was due to the insider trading and the fact Anheuser-Busch probably paid more to acquire its target. Thayer and his friends trade the Campbell stock for nearly a month before any public announcement of the merger. On July 27 nearly half the volume was insider volume controlled by those individuals who were in violation of rule 14(e)-3 (See exhibit 2). The increased volume might
This document is part of the requirements of the Foundations of marketing course, the University of Newcastle. It is the first part of the marketing plan for Red Bull, the leader of energy drinks market.
This research paper will discuss how the Liberty Beverage Corporation will design and develop a new network architecture for a complex enterprise with a diverse application, user community, and device mix. It will incorporate security policies and discuss the network architecture and components used as defensive preventative measures against known security threats and vulnerabilities. Also, it will speak to several recommended measures to address additional security concerns.
The business level strategy of Heineken is to grow the business in a sustainable and
iii. Import beer companies: These companies include Beck’s(Germany), Heineken (Holland) and Corona (Mexico). They control about 12% of the region’s market. However, these companies are seen to operate at disadvantage due to higher shipping costs, weaker distribution networks and an inability to control product freshness
Competitive brewers will introduce newer styles of beers to meet beer drinkers’ new preferences, more specifically lighter beers. However, both styles will be kept under the same brand
The situation can even explode for Export Brands International, as large beers conglomerates with tremendous power, are targeting the same segment and are creating similar beers. We have the real example of Anheuser-Busch new Bud Light Lime which was selling extremely well in the United States attacking Corona position and following the traces of the
G’Day Beverages was established in 1932 and it is beer brewery located in the Australian state of Victoria, and is headquartered in Melbourne. G’Day beverages has 8 departments for the company to carry out its business processes. These departments are: marketing, production, sales, warehousing, finance, information systems, purchasing, and human resources. Though it seems organized from the various departments they have, G’Day has been facing many supply chain management difficulties throughout the various departments. Some of these problems include forecasting, use of promotions, customer service issues, and issues which include the “silo effect”. Because of these issues, G’Day Beverages is seeking help to revise and fix several of the steps in their supply chain to make the company more successful.
When purchasing beer, customers have a wide variety to choose from. This provides customers with some power, as there are no switching costs between choosing one beer over another. Interbrew could focus on differentiation in order to combat this. They could market their premium beer
United Beverages’ CEO is debating with his department heads on the course of action the company is going to take in the future. Their flagship product, GangBuster, has been highly successful for the past 5 years. However, they have been thinking of entering the market for Energy Drinks for kids. Paul Diaz also comes up with a revolutionary idea of the dual-drink, having two separate flavored drinks in a bottle and being able to mix both flavors. Due to the limited resources of United Beverages, they have two weeks to decide whether to expand their portfolio or not?
Red Bull has built an image as a trendy energy drink, catering to young adults and young professionals between the age groups of (16-29) years. It also targets young club-goers and private parties in order to spread its picture as a stylish drink. It also believes that it is not just selling a beverage, but instead it is selling a ‘way of life’. Red Bull also uses a catchy slogan as ‘Red Bull gives you wings’. These non –traditional marketing strategies of Red Bull are not unique to any market.
That is undoubtedly case for Heineken. Analyzing its strengths and weaknesses it is clear that Heineken wasn’t a truly a global brand at the time the case was written, but was working on it. The confirmation of this is that the company’s presence in more than 170 countries all over the world. The brand is nationwide recognized, as a brand that was established in 19th century and from a local beer became a global icon. Heineken by working so hard on standardizing the brand image achieved its results. The goal for Heineken at the time was to build a demand for the product. In countries where the beer market is already mature like Japan, Australia or Spain Heineken never stopped growing. The obstacle for Heineken to become a global company was connected to the fact that Heineken’s marketing communication in many different countries was not consistent. Another obstacle that Heineken overcame over the years was the fact that it was difficult for the company to overcome the image of its beer as only for special occasions. To be global, Heineken must create the image and perception that Heineken is a daily beer. Also as of 1993, Heineken was associated in countries like Latin America as just only regular imported beer. To become global, the company needs to create advertising campaign in those countries emphasizing values of imported beer to build brand value and attract different customers. To be global Heineken needs to standardize its image and make it consistent
Beer Company 2 is a brewer of “seasonal and year-round beers with smaller production volume and higher prices” that “outsources most of its brewing activity” (pg. 120). It is financially conservative, and has undergone a “major cost-savings initiative to counterbalance the recent surge in packaging and freight costs” (pg. 120).
From the above evaluation, China is a potential and sustainable growth beer market with political stability, high GDP growth, young population led increase consumption, as well as low market share. It can be determined China as attractive country for foreign direst investment. However, we found most failed brewers, which have not understand the local situation and Chinese culture when they are make an investment in China, such as the personality of Chinese consumer, expenditure availability “no factor contributes more heavily to local brewer dominance….than pricing”5 Also Chinese people have strong patriotic feelings attached, which potentially meant that global beer brands could remain nothing more than passing curiosity. “Guanxi” in important elements for those two successful cases – Tsangtao Beer and South African Breweries, have alliance with a local brewers.
Still they convey a different messages with this similar bottle. For example, in the US Heineken stands for a luxury product, caused by the luxurious and exclusive image European products have in the US. While in Holland a bottle of Heineken just stands for a bottle of good quality beer to enhance a community feeling.