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Heineken

Heineken. MGT 490. Sean Maines. About Heineken. One of the leading beer brands for 140+ years Headquartered in Amsterdam #1 beer in Europe #2 imported beer in USA 125 breweries in over 70 countries Premier brands - Heineken, Amstel, Newcastle. Financial Snapshot 2010. *in millions (EUR).

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Heineken

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  1. Heineken • MGT 490 Sean Maines

  2. About Heineken • One of the leading beer brands for 140+ years • Headquartered in Amsterdam • #1 beer in Europe • #2 imported beer in USA • 125 breweries in over 70 countries • Premier brands - Heineken, Amstel, Newcastle

  3. Financial Snapshot 2010 *in millions (EUR)

  4. Since 2006 • EBIT • Consolidated Beer Volume • Net Profit In millions of Euros In millions of hectoliters In millions of Euros

  5. Beverage Life Cycle

  6. PEST ANALYSIS

  7. Political • Government has a negative view on alcohol due to the negative social and health consequences • All governments have higher taxes on emerging beer markets while exporting alcohol

  8. Economic • Unemployment around the world is rising • Money for leisure spending will decrease for everyone globally

  9. PEST ANALYSIS

  10. Socio-cultural • Beer isn’t just for men anymore. More and more women are enjoying beer for the taste • The new lifestyle of the newest generation is face paced. This leads to less time to drink beer; at home or at a bar. • The growing population in China leads to more leisure time for people to drink. • The more health conscious America becomes leads to less drinking.

  11. Technological • Every business uses some type of technology. • With Heineken increasing their technology, it becomes easier for them to communicate with all aspects of their worldwide operation. • Makes penetrating new markets easier

  12. Industry Overview • Contributes $223.8 B/yr. to US economy • Beer industry predicted to increase steadily • Every brewers goal- to grow globally • Very concentrated industry

  13. Michael Porter • Five Forces of Power

  14. Supplier Power • Suppliers for ingredients are mainly farmers. • Threat for supplier power is very high • Makers of green glass bottle is Heye Glass Netherland • Had 33% stake in the past • Since 2002, they have kept 100% stake

  15. Buyer Power • A buyer has many different options on where to buy beer • A buyer also has many different options on what beer they want to drink • Threat for buyer power is very high

  16. Competitive Rivalry • The Top US Breweries include: • Anheuser-Busch, MillerCoors, Pabst, Boston Beer • The Top International Competition include: • Anheuser-Busch, Carlsberg, SABMiller • Beer industry is very saturated • No evidence of price rivalry • Product differentiation is very important

  17. Threat of Substitution • Threat of substitution is very high • People have many different tastes and preferences • Some aggressive mergers could help Heineken develop new products under their core brand

  18. Threat of New Entry • Recent explosion of craft breweries in last decade • Making industry very competitive • Threat of new entry is very high • Heineken must focus on uniqueness and innovations to keep a competitive advantage

  19. Five Forces Summary

  20. Blue Ocean Strategy? • Penetrating Russia • Biggest untapped beer market • Growing economy (7-8% annually) • Growing market for alcohol • Premium beer is 50% of beer market

  21. Conclusions • Highly competitive and concentrated industry • Heineken must focus on differentiation with the competitive environment • Continue to grow globally with increased technologies • Must develop new product innovations with rapid increase of craft breweries

  22. competition Top Breweries Worldwide by Volume

  23. Competition by Region (%) Fastest predicted drink rates regions- Asia Pacific and Africa

  24. Strategic map HIGH SAM MILLER BUD Branding Effects COORS CORONA HEN LOW HIGH LOW Specialization

  25. competition

  26. import competition Losing Import Market Share 2.25 gallon cases

  27. Competitor Analysis

  28. Types of rivalry • Price-based • No evidence of price wars in industry • Non price-based • Compete with product innovations • Ex- Bud Light Lime vs. Miller Chill • Product Differentiation • Ways each company brews their beer

  29. bud light • Future strategic plans • Stay undisputed market leader • Steal loyal drinkers from other companies • Take tag lines out of campaigns • Only for loyal customers

  30. Miller Lite • Future strategic plans • Take market share from InBev • New strategy plan against Bud Light • Better tasting beer campaign • New multi-addition hoppy process

  31. Coors light • Future strategic plans • “What guys like” campaign • Less focus on TV campaigns • More broad adversing fields • More sponsorship in sports

  32. Corona • Future strategic plans • Strong penetration into Facebook • Going after Canada beer drinkers • Increase sales in all seasons • Saturated summer

  33. Who is drinking? - one drink/week

  34. who is drinking? Age Occupation Income

  35. Where people are drinking • Premium beer drinkers go to bars less • Domestic beer drinkers go to bars more

  36. Growing rate • According to Global Beer Trends Report: • Global beer consumption will increase to 2 billion hL by 2013 • Global average growth by country is 2.8% per year from 2011 and 2015 • Predicting very strong changes in country consumption trends

  37. Global drinking trends Between years 2011 and 2015

  38. Beer trends • Trends towards increased: • Craft beers • Malt beverages • Wine • Low calorie beers

  39. beer trends • Huge growth in Microbreweries • More appreciation for craft beers • Hurting sales of major brewers • More attention to detail and ingredients

  40. Social Media Influences • Budweiser steps out of there comfort zone with social media advertising. • Big Brother meets FIFA World Cup with BUDHOUSE, a reality TV show with 32 soccer fans • Also added a Facebook application where fans can paint their face with flag of favorite team • With social media, Budweiser can increase there branding with people across the world.

  41. social media influences • Miller realized that mobile devices has become a part of everyone’s everyday life. • Take approach towards active, low-calorie life style MGD 64 promotes • Users can compete with friends and take progress on Facebook application.

  42. Reflection • Every top beer company world-wide has a goal of: • Overcoming their competition • Sustaining global growth • Focusing on markets not yet reached • Strengthening their global position anyway possible • Companies need to make changes due to: • Shift in global beer markets • Trends in alcohol use • Increase of social media advertising

  43. Heineken - Overview • Corporate Overview

  44. Key Figures 2006-2010 In mill euros - Heineken was hit by the 2008 recession, but was able to weather it better than its competitors due to its premium brands.

  45. Geographical Split In mill euros The Africa/Middle East Region is the only region not to have a decline in revenue during the 5-year period.

  46. The Global Picture Revenue - Euros (mil)

  47. Business Model

  48. Mission - Sustainability • To Brew a Better Future • Become the GREENEST international brewer in the world • Continuously IMPROVE the environmental impact of our brands and business • EMPOWER our people and the communities in which we operate • Positively IMPACT the role of beer in our society

  49. Brewing a Better Future • Heineken’s 10-year Plan

  50. Three Core Values • Passion for Quality • Responsible Enjoyment of the Brand • Respect for the People, the Environment and the Society we work in

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