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What do you like to drink?
Strategy ManagementHeineken Key Study
Dang Trang Thanh Nha
Contents
1. Heineken company-introduction
2. Beer industry
3. Market share
4. Portes’s 5 forces analysis
5. SWOT anlaysis
6. Value chain analysis
7. Recommendation
Heineken company-introduction
Beer industry
Market share
Portes’s 5 forces analysis
SWOT anlaysis
Value chain analysis
Recommendation
Introduction• Heineken Internatonal-Dutch brewing company• Industry: Beverage - Beer• Established: 1864 by Gerard Adriaan Heineken• Headquarter: Amsterdam, Netherlands• Global present:▫ ranks as the third largest brewer in the world
after Anheuser-Busch InBev and SABMiller▫ Number 2 imported beer in U.S in 2015▫ Global network of distributors and 165 breweries in
more than 70 countries▫ Premier brands – Heineken, Amstel Light
Heineken company-introduction
Beer industry
Heineken Market Share
Portes’s 5 forces analysis
SWOT anlaysis
Value chain analysis
Recommendation
Beer industry overview
• Beer is the most widely purchased alcohol beverage
• A craft beer boom is showing no sign of slowing down after increasing 16% of production volume since the middle of 2014
• USA remains leading beer importer while China remains leading beer consumer across the globe
Beer Market share
Global Beer Market forecast
Heineken company-introduction
Beer industry
Heineken Market Share
Portes’s 5 forces analysis
SWOT anlaysis
Value chain analysis
Recommendation
Heineken Market Share
Heineken key segment
• Heineken® volume in premium segment +3.5% in 2015
Heineken in 4 key market
• Remarkable decrease in Africa Middle & Eastern Europe market, down to 3.8% in 4Q15 while Asia market grow up 2.8%
Product line cycle
Heineken company-introduction
Beer industry
Heineken Market Share
Portes’s 5 forces analysis
SWOT anlaysis
Value chain analysis
Recommendation
Porter’s Five Forces Analysis
0
2
4
6
8
10
Threat of NewEntrants
Threat ofSubstitute products
Bargaining Powerof Buyers
Bargaining Powerof Suppliers
Rivalry amongExisting
Competitors
Porter’s Five Forces
Porter’s Five Forces
Threat of New entrants (6/10)
-The barrier
-10 new beer last year is popular and have
the special taste
Bargaining power of Buyers(9/10)
-A lot of choice-Less loyalty
Threat of substitute products (9/10)
There are a lot of alcohol beverage like wine,
spirit, cider and non-alcohol one, also
Bargaining power of Suppliers(4/10)
-participating in some malting companies
and input require companies.
-focus on biofuels-agricultural products
Rivalry among Existing Competitors
(8/10)
-a lot of best sale brand beers : Bud light,
Corona, Budweiser,…
-Craft brewers tend to increasingly
Heineken company-introduction
Beer industry
Heineken Market Share
Portes’s 5 forces analysis
Value chain analysis
SWOT anlaysis
Recommendation
Value Chain Analysis(Primary Activities)
Inbound logistics
-Store in warehouses placed throughout the world
-> minimize shipping costs
Operations
-Main operation is Brew beer
-They carry out quality controls at every step in brewing process
-Have set the target of reducing the amount of water used and the direct, indirect CO2 emissions
Outbound logistics
-Green Distribution program aims to reduce CO2 emissions
-has brewers throughout the world so that minimize shipping costs to local areas
Marketing and sales
-the 3th most recognized brand of beer in the world
-made a 15-second film based on a tweet, ran an Instagramcampaign for Gay Pride month, and trialled a mobile-only campaign for a new beer-tequila brand (2014)-Desperados
Service
-Encourage consumers to become part of the "Heineken“ by registering , and they will do surveys to meet consumer demand
Value Chain Analysis(Secondary Activities)
Firm infrastructure
• has four operating regions: Europe, The Americas, Africa and the Middle East and Asia Pacific. Each region is headed by a Regional President
Human Resource
Management:
• Heineken create good conditions for promoting and improving their employee leadership and business skill through prudent risk
Technology Development:
• Heineken uses technology to keep their information systems
• 2013, new innovative cooling draught systems were recognized in the ‘Best environmental/sustainability initiative of the year’ category.
Procurement
• Thermal energy: Heineken control nineteen anaerobic treatment plants and it's the 7th largest company that uses the biogas as an energy source
• Electricity: buy most of the electricity and remaining 45% of electricity generate in the site by combining heat and power systems, also using diesel generators
• Water: reduction 17% in water consumption since 2008
• Raw material: participating in joint development projects with malting companies in countries where Heineken operates
Heineken company-introduction
Beer industry
Heineken Market Share
Portes’s 5 forces analysis
Value chain analysis
SWOT anlaysis
Recommendation
SWOT Analysis-Strength
Leading brand portfolio includes more than 250 other
international premium, regional, local, and specialty
beers.
Strong brand with the third place in the market
Owns over 165 breweries in more than 70 countries, lead
to minimize shipping costs to local areas
Innovation rate of 9.2% in 2015, top of the mind recall
owing to advertising and sponsorship initiatives
An M&A “crisis” worth more than $4 billion: buy Asia
Pacific Breweries (APB) which own the leading Asian
brand - Tiger
SWOT Analysis-Weakness
Produce don’t use for young people while there
are less alcohol beverage for them come from
the rivals
Lack of female customers
Being a leader susceptible to fake imitation
products
Average higher price
SWOT Analysis-Opportunity
Healthy beer ,Gluten-free options, is a attractive
segment needed to be develop
Asia market is growing rapidly
The generation tastes are
trending sweet.
SWOT Analysis-Threat Increase in Drunk-driving laws
An increasingly negative perception in society towards alcohol could prompt legislators to restrictive measures.
Customers are less brand-loyal than ever before
Craft beer (14.1% growth last year) and whiskey (up 4.6%), according to the Beverage Information Group and tend to be increasingly
Mergers and acquisitions of other breweries as Anheuser-Busch Inbev buying – the U.K.’s Camden Town Brewery, Arizona’s Four Peaks Brewing,andColorado’s Breckinridge Brewery
Heineken company-introduction
Beer industry
Heineken Market Share
Portes’s 5 forces analysis
Value chain analysis
SWOT anlaysis
Recommendation
Recommendations
• Need to grow in the in Africa Middle & Asia market
▫ Increase advertising
▫ Keep advertising to young beer drinks & Hispanic population
▫ Tap into beers with fewer calories and lower carbohydrates
• Sustain global competition
▫ Keep buying more national breweries globally or joint venture.
▫ Increase awareness of all national
Recommendations
• Marketing▫ Advertising toward young people, female
customers▫ Language advertising base on country▫ National brands▫ Increase presence in convenient store
• Product and accessories▫ Healthy beer (low-carb/low calories beer)▫ New tastes product▫ Beer tender, mini keg▫ Recycled glass