1

Brewing Industry Case Study

Module: Strategic Planning Process
Lecturer: Michael Shovelin
Date: 04th September 2010
Postassignment: Case example
Global Forces and the European brewing industry
-------------------------------------------------

1hls asslgnmenL ls based on Lhe case example 'Clobal forces and Lhe Luropean brewlng lndusLry' and
relaLes Lo Lwo quesLlons ralsed ln chapLer 2 aL Lhe end of Lhe case example (!ohnson eL al 2008 p
91) of Lhe book 'Lxplorlng CorporaLe SLraLegy 1exL and Cases' by !ohnson Scholes and WhlLLlngLon

1) uslng Lhe daLa from Lhe case (and any oLher sources avallable) carry ouL for Lhe Luropean
brewlng lndusLry (l) a LS1LL analysls and (ll) a flve forces analysls WhaL do you conclude?
(l) LS1LL analysls
Cne Lool Lo analyze Lhe broad macroenvlronmenL ls Lhe LS1LL analysls ln Lhe LS1LL analysls
envlronmenLal lnfluences are caLegorlzed lnLo pollLlcal economlcal soclal Lechnologlcal
envlronmenLal and legal aspecLs lL helps Lo ldenLlfy how fuLure Lrends mlghL lnfluence an
organlzaLlon and furLhermore Lo ldenLlfy Lhe key drlvers of change Lo creaLe scenarlos for Lhe
posslble fuLure

ollLlcal facLors
1here ls an overall decllne of consumpLlon of 8eer ln Lurope as many LradlLlonal key markeLs have
been made lncreaslngly aware of Lhe soclal problems assoclaLed wlLh alcohol consumpLlon lacLors
could be Lhe acLlve campalgn of Luropean governmenLs agalnsL drunken drlvlng blngedrlnklng and
consequenLly Lhe long Lerm healLh and flLness problems

Lconomlc facLors
ln Lhe case sLudy Lhere ls Lhe Lalk of Lhe overall decllne of Luropean beer consumpLlon whlle Lhere
was an lncrease ln emerglng markeLs (eg Chlna 8razll) around Lhe world 1hls could be because of
Lhe governmenL campalgns whlch caused a shlfL ln sales from Lhe 'onLrade' (beer consumed ln pubs
or resLauranLs) Lo Lhe offLrade (reLall/supermarkeLs) Moreover Lhe success of Cerman
supermarkeLs llke Aldl and Lldl wlLh Lhelr own 'prlvaLe label' beers raLher Lhan Lhe brewerybranded
beers has an lnfluence on Lhe Luropean brewlng lndusLry SupermarkeLs are offerlng cuL prlce offers
Also Lhe rlse of Lhe maln purchaslng cosLs llke packaglng raw maLerlal and energy wlll have lnfluence
on Lhe beer prlce eg Pelneken) Also Lhe lncrease of fuel prlces whlch wlll affecL Lhe dlsLrlbuLlon
neLwork Lhus LransporLaLlon cosLs wlll lncrease 8esldes due Lo Lhe economlc crlses Lhe breach
beLween rlch and poor ls sLeadlly growlng and Lhus many people cannoL afford any more Lo go ouL
for dlnner or havlng a beer 1hrough legal resLrlcLlons Lhe demand for alcohol ln publlc places could
decllnes lurLhermore acqulslLlons llcenslng and sLraLeglc alllances have occurred because Lhe
leadlng brewers baLLle Lo conLrol Lhe markeL 1he global pressures for consolldaLlon due Lo
overcapaclLy wlLhln Lhe lndusLry are anoLher polnL LhaL lnfluences Lhls lndusLry 1here ls a growlng
Lrend Lowards crossborder mergers and acqulslLlons lnLroducLlon of hlgherprlced premlum
producLs leL sales values ralse lf Lhere are naLural dlsasLers llke prevlously Lhe flres ln 8ussla Lhls has
an lmpacL on Lhe prlces of Lhe raw maLerlal

Soclal/culLural facLors
Wlnes have become lncreaslngly popular ln Lhe norLhern Luropean markeLs eople may reLhlnk
Lhelr llfesLyle and prefer drlnklng a good wlne lnsLead of beer and 'blnge drlnklng' 1hls could be
because wlne ls assoclaLed wlLh Lhe upper class and people wlLh a hlgher lncome Moreover people
2

are geLLlng more and more healLh consclous and Lherefore wlll drlnk ln moderaLlon lurLhermore
Lhere ls a rlslng demand for premlum and frulLflavored beers and also an lncreaslng demand for
'prlvaLelabel' beers 1here wlll also be an lncreaslng accepLance of pan Luropean brands 8esldes
Lhe lmporLance of supermarkeLs ln dlsLrlbuLlon and Lhe growLh of ownlabel producLs wlll rlse
1echnologlcal facLors
8esearch and developmenL ls lmporLanL ln Lhe brewlng lndusLry due Lo Lhe changes ln consumer
LasLes eople demand alcohol ln dlfferenL flavors wlLh low calorle wlLh low alcohol seasonal beer
and so on 1hrough Lechnology lL ls posslble Lo produce more alLhough raw maLerlal sLays Lhe same
furLhermore Lhe quallLy ls geLLlng beLLer Lhe alcohol has a longer durablllLy and ls produced more
efflclenLly and qulckly new harvesLlng and producLlon Lechnologles help Lo lncrease process
efflclency
LnvlronmenLal facLors
eople are geLLlng more and more aware of Lhe envlronmenL and lL ls necessary LhaL companles do
everyLhlng Lo prevenL envlronmenLal polluLlon lL ls lmporLanL LhaL Lhe envlronmenLal load Lhrough
Lhe brewlng process ls as low as posslble 8eusablllLy and recycllng ls lmporLanL 1he brewlng
lndusLry for example LreaLs Lhelr effluenLs so LhaL Lhey can use lL agaln for lrrlgaLlon 1hrough Lhls
Lhey save energy and mlnlmlze sludge dlsposal cosLs (1)
Legal facLors
8esldes when comparlng Lurope wlLh Lhe unlLed SLaLes one can see LhaL ln Amerlca lL ls forbldden
Lo drlnk ln publlc places ln conLrasL Lo Lurope where you can drlnk alcohol wherever you wanL 1hls
could lead Lo new laws LhaL forbld drlnklng alcohol ln Lhe publlc 1hls ls a LhreaL LhaL mlghL come
really qulckly when comparlng Lhe new law abouL Lhe resLrlcLlons ln smoklng ln publlc places llke
pubs and resLauranLs Moreover a few years ago lL was allowed Lo have a blood alcohol level of 08
parLs per Lhousand 1hls was changed Lo 03 parLs per Lhousand So lL ls noL unllkely LhaL Lhe
governmenL changes Lhls law agaln Lo furLher prlce down Lhls llmlL or compleLely forbld Lo drlnk and
drlve As you could read ln Lhe case sLudy ln Lhe unlLed klngdom Lhere ls a growlng hosLlllLy Lowards
excesslve alcohol consumpLlon ln pubs and clubs and Lhls could also happen everywhere ln Lurope
lurLhermore Lhere ls Lhe LhreaL LhaL pollLlcs could puL up Lhe age of Leenagers from 16 Lo 18 Lo
allow Lo drlnk alcohol lf drunken people are lnvolved ln an accldenL or ln a crlme Lhey are flned wlLh
a hlgher penalLy




(ll) A flve forces analysls
1he flve forces analysls helps Lo deLermlne Lhe lmpacL of Lhe LhreaL of new enLranLs subsLlLuLes
buyers and rlvals on proflLablllLy ln an lndusLry or secLor (!ohnson eL al 2008 p 39)
1hreaL of enLry
1he LhreaL of enLry depends on Lhe helghL of barrlers Lo enLry l Lhlnk LhaL Lhe LhreaL of enLry ln
Luropean 8rewlng lndusLry ls very low due Lo Lhe mergers and acqulslLlons of Lhe pasL years
1hrough consolldaLlons brewerles sLablllze Lhelr compeLlLlve poslLlon As Lhere are only a few really
blg brewlng companles wlLh a loL of power Lhe flnanclal efforL for new enLranLs would be Loo hlgh Lo
enLer Lhls markeL Moreover because of Lhe sLrong brand and Lhe loyalLy of exlsLlng consumers ln
Lurope lL would noL be easy for new enLranLs Lo challenge well esLabllshed leaders
1hreaL of subsLlLuLes
1here are a loL of producLs LhaL can be seen as a subsLlLuLe of beer llke wlne frulLflavored and
exoLlc beers as well as sofL and energy drlnks ln Lhe case example wlnes becomlng lncreaslngly
popular ln Lhe norLhern Luropean markeLs 1able 1 ln Lhe case example shows LhaL Lhere was a
slgnlflcanL decrease ln beer consumpLlon ln uenmark and norway whlch conflrms Lhe lncrease of
wlnes ln Lhose counLrles



ower of buyers
uue Lo CovernmenL campalgnlng agalnsL drunken drlvlng and blnge drlnklng Lhere was a shlfL from
'onLrade' Lo 'offLrade' 1hrough Lhls large supermarkeL chalns (lndusLry concenLraLlon lncreases)
llke 1esco or Carrefour galn Lhe power of buyers and Lhus have a hlgh bargalnlng power 1hls means
LhaL large supermarkeL chalns for lnsLance preLend Lhe prlce Lhey are wllllng Lo pay 1hrough Lhe
power of buyers and Lhelr ablllLy of changlng easlly Lhe brand (suppller) Lhe brewlng lndusLry comes
under pressure
ower of suppllers
ln Lhe case example Lhey wrlLe LhaL Lhe 8rewers' maln purchaslng cosLs are packaglng raw maLerlals
and energy 1he power of suppllers of packaglng l belleve ls very hlgh 1here are only a few suppllers
of glass and L1 (polyeLhylene LerephLhalaLe) boLLles avallable and Lherefore Lhey have a hlgh
power 1o change Lhe suppller could lead Lo hlgh swlLchlng cosLs as Lhey have Lo buy a new machlne
or adapL Lhe exlsLlng machlne 1he maln raw maLerlals for brewlng are waLer malL hops yeasL and
barley 1he power of suppllers of Lhese maLerlals l Lhlnk ls low because Lhere are a greaL number of
suppllers avallable 1he power of suppller of energy ls very hlgh as Lhere ls a concenLraLlon of
suppllers
CompeLlLlve rlvalry
CompeLlLlve rlvalry means LhaL Lhere are organlzaLlons wlLh slmllar producLs and servlces almed aL
Lhe same cusLomer group ln my oplnlon compeLlLlve rlvalry ln Lhls lndusLry ls very hlgh because
* producL dlfferenLlaLlon ls very low
* acqulslLlons llcenslng and sLraLeglc alllances (galn markeL share)
* consolldaLlons due Lo overcapaclLy wlLhln Lhe lndusLry
1able shows Lhe world's Lop 10 brewery companles by volume ln 2003 whlch accounLed for around
half of world beer volumes ln8ev Anheuser8usch SA8Mlller and Pelneken reached abouL of
Lhe volume of beer drunken around Lhe world ApproxlmaLely 13 was reached by Morelo
Carlsberg Coors 1slng1ao 8alLlc 8rewery Poldlngs and Asahl 1he Luropean brewlng lndusLry l
belleve ls saLuraLed and sLarLed Lo decllne and Lhus compeLlLlve rlvalry wlll sLlll exlsL on a hlgh level
8arrlers Lo enLry wlLhln Lu are reduclng leadlng Lo crossborder mergers
My concluslon ls LhaL elLher you can be one of Lhe blg players or one of Lhe many small speclallsL and
reglonal brewerles llke Crolsch Cobra 8eer




lor Lhe four brewerles ouLllned above (or brewerles of your own cholce) explaln
(a) how Lhese Lrends wlll lmpacL dlfferenLly on Lhese dlfferenL companles and
(b) Lhe relaLlve sLrengLhs and weaknesses of each company
(a) Pelneken
Pelneken ls Lhe blggesL of Lhe Luropean brewery buslnesses As Lurope ls a saLuraLed markeL
Pelneken focuses also on golng overseas 1hey use locally acqulred companles Lo lnLroduce Lhelr
beer Lhey have a good sLraLegy Lo furLher expand Lhelr markeL share 1he same sLraLegy Lhey could
apply ln Lurope As Lhe Luropean markeL ls saLuraLed Lhey could acqulre small speclallsL and reglonal
brewerles llke Crolsch and Lhus grow
(b) SLrengLhs
* Leader ln Lhe Luropean brewery buslness
* 3 of sales ln Aslaaclflc
* 17 of sales ln Amerlcas
* SLrong brands Pelneken AmsLel
* lamlly conLrolled sLablllLy and lndependence
* lnLroduce brand Lo new markeLs overseas by uslng locally acqulred companles
* SLrengLhens local companles by Lransferrlng experLlse and Lechnology


* Lconomles of scale for Pelneken and Lhe local beers
* Pave a vlslon! rlorlLles of acLlon
* AcceleraLe revenue growLh
* lmprove cosL efflclency and reducLlon
* Speed up sLraLegy lmplemenLaLlon
* locus on markeLs where Lhey belleve Lhey can wln
Weaknesses
* rlce lncrease of packaglng Pelneken complalned of an 11 per cenL rlse ln packaglng cosLs
* Lack of lnnovaLlon Lo meeL consumers needs (changlng LasLes flavoured beer)
* 1hey could sLuck ln a ruL because lL ls a famllyconLrolled ownershlp And Lhey do Lhlngs as Lhey
always have done
Crolsch
(a) how Lhese Lrends wlll lmpacL dlfferenLly on Lhese dlfferenL companles
Crolsch wlll lnvesL ln lnnovaLlon and brandlng Lo make Lhelr brand sLronger by sLrlklng green boLLles
and lLs unlque swlngLops lurLhermore Lhrough sLrong and dlsLlncLlve beers Lhey wanL Lo succeed
As Lhey are a medlumslzed company lL would be wlse Lo [oln sLraLeglc alllances Lo sLrengLhen lLs
poslLlon CLherwlse lL could easlly be LhaL blg players LhaL have a vasL economles of scale and a hlgh
flnanclal power acqulre Crolsch Moreover lL would be good for Crolsch Lo offer producLs llke Lhe
brewery Mohrenbrau" ln AusLrla 1hey offer for lnsLance beer noodles beer musLard beer [am
beer cosmeLlc and so on()
(b) SLrengLhs
* very experlenced esLabllshed ln 1613!
* ulfferenL producLs (Crolsch premlum lager and new flavoured beers) Pave Lhe rlghL Lo sale and
dlsLrlbuLe Lhe valued uS Mlller brand
* CenLrallzed producLlon on a slngle new uuLch brewery lncrease efflclency and volume
* 1rlal brewery Lo supporL lnnovaLlon
Weakness
* Medlumslze lnLernaLlonal brewlng company
* Less flnanclal power
* t 1m ln 2003 ln conLrasL Lo Pelneken t 118bn
* Slngle uuLch brewery lf a problem occurs no beer can be produced

ln8ev (8elglum/8razll)
(a) how Lhese Lrends wlll lmpacL dlfferenLly on Lhese dlfferenL companles
ln8ev had a Lurnover of t 1bn ln 2006 and was (aL LhaL Llme) Lhe largesL brewer ln Lhe world
1hrough furLher acqulslLlons of well esLabllshed (sLrong brands) and lnnovaLlve brewerles lL could
sLrengLhen lLs poslLlon lurLhermore because Lhey have such a sLrong flnanclal power Lhey could do
equlLy lnvesLmenLs Lo expand Lhelr poslLlon ConcenLraLe on bulldlng sLrong brands!

(b) SLrengLhs
* LargesL brewer ln Lhe world (merger of 8erglan lnLer8rew and 8razlallan Am8ev ln 200)
* Second largesL brewer ln Chlna (7 annual growLh largesL slngle markeL by volume)
* Poldlng number one and number Lwo poslLlons ln 20 dlfferenL counLrles
* SLrong flnanclal power
* SLrong brands llke 8eck's and SLella ArLols
* 1hrough Lhe acqulslLlon wlLh Anheuser8usch ln 2008 Lhey now have Lhe klng of 8eers 8udwelser
and 8ud LlghL(2)
* 1hey have a sLraLegy
* 1ransform lLself from Lhe blggesL brewlng company ln Lhe world Lo Lhe besL by
* 8ulldlng global brands
* lncreaslng efflclency
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* 1hrough more cenLral coordlnaLlon of purchaslng lncludlng medla and l1
* lrom Lhe opLlmlzaLlon of lLs lnherlLed neLwork of brewerles
* lrom Lhe sharlng of besL pracLlce across slLes lnLernaLlonally
* Lmphaslze organlc growLh

Weakness
* 1hey boughL Anheuser8usch ln 2008 whose sales of Lhe 8udwelser and 8ud LlghL brands where
decllnlng slnce 200 Maybe due Lo Lhe shlfL of ownershlp of Lhe largesL uS brewer lnLo ln8evs'
hands Lhe decrease ln sales could geL much worse (2)
* lnherlLed neLwork of brewerles
*
ScoLLlsh and newcasLle (uk)
(a) how Lhese Lrends wlll lmpacL dlfferenLly on Lhese dlfferenL companles
ScoLLlsh and newcasLle ls Luropean focused lL was acqulred by Pelneken ln CcLober 2009 ()

(b) 1helr sLrengLhs were
* SLrong brands ( !ohn SmlLhs kronenbourg kanLerbrau 8alLlka and losLers)
* lourLh largesL brewer ln Lurope (volume Lerms)
* MarkeL leader ln uk lrance and 8ussla
* lnvesLmenL ln 8alLlc 8everages fasLgrowlng markeLs
* 20 per cenL sLake ln C8C (flfLh largesL brewery)
* ln uSA second largesL lmporLer of forelgn beers
* Lmphaslze developmenL of lnnovaLlve and premlum beers
* ldenLlfy Lhelr weakness llke lnefflclenL brewerles and close Lhem down
1helr weaknesses were
* 1oo less flnanclal power
Mohrenbrau (AusLrla)
SLrengLhs
* Wlde producL range (Mohren flff Mohren Speclal Mohren 8adler Mohren kellerbler)
* ComplemenLary producLs (glasses beer [ugs )
* AddlLonally producLs llke beer chocolaLe beer musLard beer noodles
* SLrong local brand
* CldesL and laLesL brewery ln vorarlberg (18)
* Cnllne shop
* lnnovaLlon and hlgh Lech machlnes
Weakness
* Less flnanclal power
* 8eglonal (buL sLarLlng Lo expand for lnsLance Scandlnavla)
ln concluslon l belleve LhaL Lhe mergers and acqulslLlons durlng Lhe pasL years wlll conLlnue 8lg
players wlll buy smaller companles Lo expand Lhelr range of producLs or Lo break lnLo new markeLs
(oLher counLrles) ln Lhe fuLure l Lhlnk mergers wlll occur ln Lhe emerglng markeLs where beer
consumpLlon ls ralslng

8eferences
!ohnson Cerry and kevan Scholes and 8lchard WhlLLlngLon Lxplorlng CorporaLe SLraLegy 1exL
Cases 8Lh ed Parlow earson LducaLlon / renLlce Pall llnanclal 1lmes 2008
(1) hLLp//wwwLhewaLerLreaLmenLplanLcom/waLerLreaLmenLbrewerylndusLryhLml
(2) hLLp//recordeaglecom/buslness/x73036366/ln8evlnherlLsAnheuser8uschweaknesses
() hLLp//wwwguardlancouk/buslness/2009/ocL/1/helnekennewcasLlebrownale[obs
() hLLp//wwwmohrenbrauerelaL/lndexphp?mld3smldssmld

6



4-a F4rces And The Eur45ean Brewing Industry
Global Iorces and the European Brewing industry Case 1


1able of ConLenLs
lnLroducLlon2
LS1LL2
orLer's llve lorces
SLrengLhs weakness of Companles3
lmpacL of 1rends on Lhe Companles7
8lbllography8

lnLroducLlon
1hls case shows how global forces have lmpacL on Luropean brewlng lndusLry and how Lhese
companles are Lrylng Lo overcome Lhe obsLacles ln splLe of resLrlcLlons and awareness campalgnlng
runed by Lhe governmenL Lhese companles are Lrylng Lo grow Lhrough acqulslLlons alllances and
closures wlLhln Lhe lndusLry Companles are concenLraLlng on expandlng Lhelr exlsLence lnLo oLher
markeLs Some oLher companles are concenLraLlng on lnnovaLlon brandlng Moreover Lhey are
flghLlng on cosL cuLLlng such cosLs lnclude packaglng cosLs whlch wlll reduce Lhe cosL of overall
manufacLurlng
LS1LL
ollLlcal facLors
* CovernmenL organlslng publlc evenLs ln order Lo make publlc aware abouL Lhe effecLs of alcohol
consumpLlon on Lhe healLh
* CovernmenL ls lmposlng resLrlcLlons on consumpLlon of beer and alcohol producLs
* lf anyone ls lnfluenced by alcohol ln dolng crlme Lhey are flned wlLh hlgh penalLy
(1he Luropean 8rewlng lndusLry 1999)
Lconomlc facLors
* 1he governmenL resLrlcLlons have lead Lo lncrease ln sales of alcohol ln supermarkeL
* CovernmenL campalgnlng and resLrlcLlon on drlnklng resulLed ln decrease ln Lhe sale of alcohol
producL consumpLlon ln clubs and pubs
* Companles are Lrylng Lo achleve economlc of scale Lhrough cosL reducLlon
* 8rewlng companles are engaged ln varlous markeLlng sLraLegy Lo grow Lhelr markeL Lhrough
acqulslLlon mergers and lnLroduclng premlum producLs
* Super markeLs are offerlng cuL prlce offers
* Pelneken ls faclng problem ln packaglng cosL (1he Luropean 8rewlng lndusLry 1999)
Soclo culLure facLors
* Consumers are becomlng more healLh consclous
* Crowlng unfrlendly or aggresslve behavlour Lowards blnge drlnkers
* eople have sLarLed drlnklng wlnes ln norLh Luropean markeL
* urlnklng ln Lhe pubs and clubs has been reduced (uemographlcs of Lurope)
1echnologlcal facLors
* Companles are Lransferrlng experLlse and Lechnology Lo achleve economlc of scale efflclency and
cosL reducLlon
* CenLrallzaLlon of producLlon ls done Lo lncrease efflclency and volume
* 1rlal brewerles are esLabllshed Lo enhance lnnovaLlon
* SupporL from medla and l1 are Laken (Luropean 8rewlng lndusLry 1999)
7

LnvlronmenLal facLor
* Luropean brewers markeL ln Cermany and unlLed klngdom ls decreaslng and growlng around Lhe
world wlLh 7 annual growLh ln Chlna
* Cerman reLaller's sales are lncreaslng from local prlvaLe brands raLher Lhan brewerybranded
* Merger and acqulslLlon are carrled on by Lhe companles Lo overcome compeLlLlon and Lo have
beLLer conLrol over growLh
* ShlfL ln sales from onLrade Lo offLrade (Luropa 2010)
Legal lacLors
* ln Lhe Luropean counLrles Lhe adverLlsemenLs whlch are relaLed Lo Alcohol consumpLlon ln large
volume are forced Lo apply cerLaln laws by CovernmenL
* 1he laws ln Luropean counLrles are sLrlcLly agalnsL urlnklng and urlvlng under age drlnklng and
uomesLlc vlolence consumlng alcohol has compelled many cusLomers Lo reduce Lhe consumpLlon of
drlnklng (lnsLlLuLe of Alcohol SLudles 2009)

orLer's llve lorce Analysls
AfLer dolng Lhe envlronmenL (Lurope) analysls of brewlng lndusLry uslng LS1LL now we sLudy Lhe
enLlre brewlng lndusLry lnLernally uslng porLers flve force analysls
lC8CL1 1hreaL from SubsLlLuLe roducL
1hree lmporLanL componenLs of brewage lndusLry are ulsLlllers Wlnerles and 8eer ManufacLurers
uue Lo socloculLural changes Lhe Luropean consumers Lurned healLh consclous and were looklng
for subsLlLuLes llke wlne frulL flavored exoLlc beers whlch resulLed ln unsLable markeL of LradlLlonal
beer ln Luropean brewlng lndusLry
lC8CL2 8argalnlng power of Suppllers
1he lmporLanL suppller for Lhe brewlng lndusLry ls packlng lndusLry for raw maLerlal procuremenL
llke barely and boLLllng 1he Luropean packaglng lndusLry ls concenLraLed by lnLernaLlonal players
llke C8CWn (for Llns) and CWLnSlLLlLnClS (for boLLllng) Slnce belng hlghly dependenL on
concenLraLed suppllers Lhe bargalnlng of Lhese suppllers wlll be very hlgh ln Lhe fuLure 1o reduce
Lhls hlgh bargalnlng power of Lhese suppllers Lhe brewlng companles should achleve cenLral
coordlnaLlon wlLh Lhelr suppllers uslng lnformaLlon 1echnology and Medla
lC8CL 8argalnlng power of CusLomers or 8uyers
1he avallablllLy of subsLlLuLes healLh consclousness and offLrade supply of beer Lhe bargalnlng
power of cusLomer became very hlgh Cne flfLh of Lhe sales of beer were Lhrough offLrade more
opLlons were avallable for Lhe cusLomers ln Lhe form of exoLlc flavored beer wlnes 1he governmenL
promoLlon agalnsL drlnklng alcohol also badly affecLed Lhe brewlng lndusLry whlch resulLed ln heavy
compeLlLlon beLween Lhe brewers beneflLlng Lhe cusLomers 1herefore due Lo Lhese reasons Lhe
bargalnlng power of Lhe cusLomers ls very hlgh

lC8CL 1hreaL of Lhe enLry of new CompeLlLors
1he LhreaL of new enLry lnLo Luropean 8rewery lndusLry ls very less 8ecause lL ls almosL a saLuraLed
markeL whlch ls ln maLure sLage of lndusLry llfe cycle lf a new company wlll enLer lnLo Lhe lndusLry
lLs lnvesLmenL should be hlghly caplLal lnLenslve and lL ls a speclflc producL where lnnovaLlon ls very
hard 1he level of compeLlLlon ls very hlgh Lherefore lL wlll noL susLaln for a long Llme ln markeL
1herefore lL ls very hard for a new enLry Lo come ln Lo Luropean brewlng lndusLry
lC8CL 3 lnLenslLy of compeLlLlve rlvalry
1he Luropean markeL ls hlghly compeLlLlve because of low producL dlfferenLlaLlon lack of producL
lnnovaLlon hlgh enLry and exlL barrlers resulLlng ln acqulslLlon and sLraLeglc alllances of Lhe exlsLlng
players Lo aLLaln Lhe markeL share 1he lndusLry ls ln growLh sLage of lndusLry llfe cycle whlch means
Lhe markeL ls saLuraLed Lherefore Lhere ls a hlgh lnLenslve compeLlLlon ln Lhe markeL
PLlnLkLn
SLrengLhs
* lL has Lhe blggesL markeL share ln Luropean brewery buslness wlLh a sale of t118bn
8

* 1he company has more sLablllLy and lndependence Lo grow sLeadlly as lL ls famlly conLrolled
buslness
* LnLers new markeL Lhrough acqulrlng locally esLabllshed companles
* use experLs and new Lechnologles
Weakness
* Lacklng experLs ln Lop level as whole buslness ls conLrolled by famlly members who may noL have
lndepLh knowledge
C8CLSCP
SLrengLhs
* lL has huge exporL buslness where half of lLs sale comes from overseas
* lnnovaLlon and brandlng are core sLraLegy
* CenLrallzaLlon of producLlon helps Lo lmprove efflclency and volume
* ManufacLurer of flavoured beers
Weakness
* Lack of proper markeLlng sLraLegy ln local markeL
* Sales of company are much lesser Lhan oLher compeLlLors llke Pelneken
ln8Lv
SLrengLhs
* LargesL brewer ln Lhe world
* lL ls second largesL brewer ln Chlna whlch have 7 annual growLh ln beer consumpLlon
* 1hey follow Lhe prlnclpal of cenLral coordlnaLlon purchase whlch help Lo achleve more efflclency
* CoL well known lnLernaLlonal llke 8eck's and SLella ArLols whlch helps ln markeLlng
Weakness
* Lack of lnnovaLlon
* Lack of producL dlfferenLlaLlon 1hey don'L have anyLhlng dlfferenL from oLher brewers belng Lhe
markeL leader
ScoLLlsh and newcasLle
SLrengLh
* lL ls markeL leader ln uk lrance and 8ussla
* lorLh largesL brewer ln Lurope ln Lerms of volume
* 1hey Lake rlsk by lnvesLlng ln new places llke ukralne and 8alLlc counLrles
* Lmphaslses on developmenL of lnnovaLlve and premlum beers
Weakness
* 1hey are closlng Lhelr lnefflclenL brewerles lnsLead of flndlng soluLlon Lo Lhe problem so Lhey lack
proper coordlnaLlon
* Looslng markeL share by closlng Lhe brewerles

lmpacL of 1rends on Lhe Companles
Pelneken (neLherlands)
* uue Lo Lhe resLrlcLlon on Lhe alcohollc producLs ln Lurope so lL ls obvlous LhaL Lhere would be
negaLlve lmpacL on Pelneken Company as lL ls a Lurope based company
* 1hls company always Lransferrlng Lhelr effecLlve experLlse and laLesL Lechnology Lo Lhelr LargeLlng
counLrles Lo promoLe Lhelr domesLlc players
* lL ls shown ln Lhe case LhaL Lhere ls decreasemenL ln beer consumpLlon across Lurope so Lhey are
looklng for Lhe new places and searchlng for opporLunlLles
Crolsch (neLherlands)
1hls company ls havlng Lhe auLhorlLy from Lhe governmenL Lo sell Lhe appreclaLed Amerlcas mlller
brand ln Lhls counLry
As lL ls shown ln Lhe case LhaL more Lhan half of Lhe sale came overseas so Lhere was no greaLer
lmpacL of resLrlcLlons and awareness on Lhls company
1he producLlon of Lhls company ls llke as a enhanclng compeLence ln Lrend
9

ln8ev (8elglum/8razll)
* 1here was no greaL effecL on Lhls company of resLrlcLlons because lL ls a leadlng company global
wlse
* lL ls noL a Luropean company so lL ls anoLher reason for llLLle lmpacL
* 1hey are keeplng Lhelr sLraLegy by acqulslLlons
ScoLLlsh and newcasLle (uk)
* 1hls company ls a largesL company ln uk
* Masses of unlLed klngdom showed greaL reslsLance Lo blnge drlnklng whlch ls noL good for Lhe
company
* 1hls company ls keeplng busy lLself by LhroughouL Lhe world
* 1hls company ls focuslng Lo lnvenL Lhe new producLs and always ellmlnaLe Lhe uneconomlcal
ones

8lbllography
Agelng opulaLlon and LlfesLyle Changes urlve uemand for CrLhopaedlc 8lomaLerlals ln Lurope
(nd) 8eLrleved March 9 2010 from hLLp//wwwprnewswlrecouk/cgl/news/release?ld171
uemographlcs of Lurope (nd) 8eLrleved March 9 2010 from AbsoluLe AsLronomy
hLLp//wwwabsoluLeasLronomycom/Loplcs/uemographlcs_of_Lurope
Luropa (2010 lebruary 17) 8eLrleved March 10 2010 from Luropean unlon webslLe
hLLp//europaeu/pol/env/lndex_enhLm
Lu8CA (2010 february 17) 8eLrleved march 10 2010 from Luropean unlon webslLe
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Lu8CA (2010 february 17) 8eLrleved march 10 2010 from Luropean unlon webslLe
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Lu8CA (2010 february 17) 8eLrleved march 10 2010 from Luropean unlon webslLe
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Luropean 8rewlng lndusLry (1999) 8eLrleved March 9 2010 from
www1he20Luropean208rewlng20lndusLry201heses_26_ulsserLaLlons20College201erm20apers
com
lnsLlLuLe of Alcohol SLudles (2009) Alcohol ln Lurope A ubllc PealLh erspecLlve 8eLrleved March
10 2010 from lnsLlLuLe of Alcohol SLudles
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LvaluaLlng800
1he Luropean 8rewlng lndusLry (1999) 8eLrleved from College 1erm apers Web SlLe
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lndusLryshLml