What trends from the external macro-environmental factors are most important to Heineken, specifically, and why?
One of the trends from the external macro-environmental factors that are most significant to Heineken specifically is the trend of merger and acquisition. This is important to the company because its competitors are not only increasing the statuses and positions in the global market, but are also attaining more proficiencies in manufacturing and distribution. Devoid of acting upon this trend indicates that the company runs the risk of falling behind and losing its string position in the global market. Another trend is international consolidation. This is important to Heineken because the other companies attained domination in the global markets from being a company that was not previously largely renowned by consumers. Another trend is the growth of the Hispanic population. This is important to the company because the Hispanic population is responsible for 25% of the sales in the United States. Therefore it is important for Heineken to market brands that target this consumer base.
Which of Porter’s 5 forces are most impactful to Heineken, specifically, and why?
Porter’s 5 forces encompasses five elements that include threat of new entrants, threat of substitute product or services, rivalry among existing competitors, bargaining power of buyers and bargaining power of suppliers. The force that is clearly identified and discussed in exceptional length in the case study is the rivalry among existing competitors. In particular, change in the beer industry had been taking place owing to significant wave of consolidation. Majority of the bigger brewers started to undertake merger and acquisition with their competitors in global markets to become global players. This steered them into a dominant position in different markets across the globe and also granted ownership of such brands. What is more, this granted the competitors with capabilities in manufacturing and distribution. Even with respect to establishing an international presence, the company faced severe competition and found it very hard to go toe to toe with the recent moves made by competitors such as Inbev and SABMIller of Belgium and United Kingdom respectively.
What are the critical issues facing Heineken and what should they do about them?
There are a number of critical issues facing Heineken as pointed out in the case study. One of the critical issues is the conservative style of leadership within the organization. For a very lengthy period now, Heineken has experienced a tight control from the family, an aspect that has influenced the corporate culture of the company in terms of having slow and decelerated decision-making. However, it is imperative to note that this culture has been the successful foundation of the company. I believe what the company ought to do about this issue is to incorporate both new changes and old approaches used by the company. This will not only sustain the strong basis of the company, but also incorporate the new changes in the industry. Another critical issue discussed in the case study is the perception of the brand of the company becoming obsolete and worn out. As pointed out, the company runs the risk of being considered a tired and unexciting brand. Going forward, Heineken should utilize the similar strategy as the unveiling of Amstel, to target young consumers and also other individualities to ensure the brand is still recognized and largely acknowledged.
Identify and discuss the strategies Heineken used in the past and what they should do going forward
One of the previous strategies utilized by Heineken is the restricting of itself to snapping up and acquiring small national brewers like Moretti and Cruzcampo from Italy and Spain respectively, which offered the firm minimal but profitable avenues for growth. Going forward, Heineken ought to merge and acquire major beer companies in different regions across the world. Not only will this increase its global status across the world and also generate additional proficiencies in manufacturing and distribution, but the company will also increase the revenues generated and become a powerful international competitor. Another strategy used by Heineken in the past was largely depending upon the success of its flagship Heineken brand. However, going forward and in the future, the strategy that ought to be utilized by Heineken is to ensure utilization of awareness of its brands across consumers of all cohorts, different regions and even races. For instance, not only concentrating on Hispanics, but also Africans and also not just concentrating on the young and old drinkers but also those in the middle of the age brackets (Heineken pdf, n.d).
References
Heineken pdf. (n.d). Case 29: Heineken.
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