Brenna Griffin, Karen Hanschke, Casey Mason, Josh Miller, Charis Siau & Gal Wolman

Overview
Intro/Background
General Environment
Porters Five Forces
Internal Analysis
Business & Corporate Level Strategies
Conclusion & Questions

Introduction/Background

Established in 1864 by the

Heineken Family
>85,000 employees
165 Breweries in more than 70
Countries
Sold in 178 Countries

Beverage Industry
HQ: Amsterdam, Netherlands

#1 Brewer in Europe
#3 Brewer by Volume in the World

Business Priorities

1.What strategy does

Heineken follow in the
global beer market?
Differentiation & Fit 2 Fight
Strategy

Africa, Middle East & Eastern

Europe
Americas
Asia Pacific
Europe

General Environment
Economic
$460billion industry globally
Premium/craft most profitable
Continue to expand for next decade

Global
US and European consumption declining
Africa - fastest growing market
Global brands higher prices/margins
The era of global brands is coming, Alan Clark,
managing director of SABMiller Europe

General Environment
Demographic
73% US population LDA
80% millennials over 21
75% of LDA live within 10 miles
of brewery
Young women (21-34) 44%
of total premium/craft volume
Bottom 60% by income consume
40% premium/craft volume

Sociocultural
Craft/premium increasing while overall decreasing
Growing appreciation for wine
Tougher drunk-driving laws

General Environment
Political/Legal
3-tier system
Manufacturers
Wholesalers
Retailers
Excise tax issues for craft breweries
Anti-trust issues

Technological
DraughtKeg - 20 glasses
BeerTender - keeps fresh for weeks

Five Forces
Threat of
New
Entrants
-

Buyer's
Power
+

Industry
Competitors
++
Rivalry
among
Competitors

Substitutes
+

Suppliers
Power
+/-

What is the structure of the global beer industry?

The Industry

Trending Consolidation via M&A

Operations expansion
DevelopED leader U.S.
DevelopING leader ASIA Pacific

ding
a
e
l
e of wide
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l
a
dv
orld
Bran ands w
r
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5
(201

New Entrants

Capital requirements
Lack of versatility with failed breweries
Top 3 seller strength

Buyers

Low switching cost

Little loyalty
Demand for beer is inelastic
Demand for Heineken is elastic

Suppliers

Fewer brewers, larger plants

Commodity costs
Rise in standards and
expectations

Substitutes

Growing appreciation for wine, ciders,

liquor
Tougher drunk driving laws
Microbreweries & craft blends

nal areas

System

s with

gram

VALUE CHAIN - SUPPORT

ACTIVITIES

VALUE CHAIN - PRIMARY ACTIVITIES

INB R & OPER
OUN D
ATIO
Ne NS
D
LOGI
STIC
S
Pu
rc
ha
sin
g

w
str
ain
s
of
ba
rle
y
an
d

Ove
r
125
bre
weri
es
in
170
cou
ntrie

VALUE CHAIN - PRIMARY ACTIVITIES

DISTRIB MARKETI
UTION
NG
Optimiz
ed
networ
k of
distribu
tors
Minimiz
ed
shippin
g costs
Reduc
ed

Prioritize
d higher
market
spending
Brand
Portfolio
Open
Your
World
Platform
Departur
e

What changes has Heineken

made that
will help it deal
with its challenges ?

BUSINESS- LEVEL STRATEGY

Overall Cost Leadership

Differentiation
Focus
Maturity Stage- Strategies

CORPORATE- LEVEL STRATEGY

Enhancing Revenue
Achieving Diversification
The Influence of Managerial
Motives

 Leader in premium beer

Family-driven firm
More aggressive strategies
Younger drinkers
Beer consumption levels worldwide

MEGA MERGE
Should Heineken remain an
independant company?

MILLENNIALS
What can Heineken do to attract
millennials?

HEINEKEN FAMILY
Would it help or hurt to lessen family
control?
Since 1952 history
has proved it is the
right concept. The
whole business about
family restraint on us
is absolutely untrue.
Without its spirit and
guidance, the company
would not have been
able to build a world
leader.

Q
u
e
s
t
i
o
n
s
?