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