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Heineken was founded in Amsterdam by Gerald Heineken in 1864. Presently, Heineken NV is the worlds third largest beer producer after Anheuser-Busch and SAB Miller. Almost from the start, the firm was successful within a few years of its founding. Heineken sells more beer out side the United States than either of them. Of its 10.3 billion euro in 2002 sales only 14% were in home market. Heineken not only a market leader in every European countries it also sells its products through out north and south America, Africa and Asia 170 countries in all.


Heineken was founded in Amsterdam by Gerald Heineken in 1864. The firm was very successful within a very few years of its founding because of its quality product and right way of market positioning and sales promotion initially in Europe, Far East and later on United States by his friend as the name Van Munching & Company. Prior to World War-II Despite Heineken success, it ceased its US operations during prohibition in 1933, it reestablished those operations, again granting Van MUNCHING & Company of NEW YORK exclusive rights to import Heineken products into the United States. Heineken has continued to grow steadily. It has breweries in over 50 countries. Some of the largest are in Canada and France. (contd)

Its joint venture with a leading Japanese brewer, Kirin, gives it a strong presence in that key market. Heineken aggressively expanded in European market in 1980 considering the EUs competition of its common market and invested heavily in new internet based technology. Heineken has made one recent important strategic decision to change the Van Munching & company to Heineken USA which has helped cut costs and added additional profit. Heineken has made another significant investment for Muslim customers by producing non alcoholic beer under the Fayrouz label which has brought 1.3 billion Muslims customers in the world to enjoy the Heineken Beer.

Discuss the advantages and disadvantages of Heinekens exporting

Almost immediately after the foundation of Heineken in 1864, it started to export beer to France, Italy, Germany and upto the Far East countries. 1920 the company ceased its export to USA due to Prohibition, under which the sale, manufacture, and transportation of alcohol for consumption were banned nationally Heineken setup breweries in over 50 countries including Canada, France, New Guinea, Australia and Brazil. It got into Japanese market through joint venture with a leading Japanese brewer Kirin. (CONTD)

Heineken setup breweries in over 50 countries including Canada, France, New Guinea, Australia and Brazil. It got into Japanese market through joint venture with a leading Japanese brewer Kirin. Heineken aggressively expanded its market in Europe in 1980s to establish itself with overwhelming market dominance. Subsequently, it bought breweries in Greece, Ireland, Italy and Spain and thereby expanded its product lines and facilities of distribution throughout Europe But interestingly Heineken did not setup any brewery in USA, taking lessons from Miller, a distributor of Lowenbrau in US market, importing from Germany In 2002 Heineken bought Egypts brewery, Al Ahram Beverage Co. Thereafter, in 2003 onward it started exporting nonalcoholic beer in Muslim World, a popular product of Al Ahram and captured the large untapped market.

key issues facing Heineken in so far as

international licensing is concerned
Heineken has boldly ventured into international markets and so far has been a big success. It has made the right decisions so far and has gone on to be the third largest beer producer. Not only is it a big market seller in Europe, but also in Asia, North America and South America, and Africa as well The key issues facing Heineken regarding international licensing is the fact that people may no longer find the Heineken beer as it was before. People's perception can be a very important factor in the success or flop of an international product that is brewed locally. (CONTD)

Another key issue Heineken might eventually face is that the original flavor of the brew might be mixed with a flavor from the locality, thus, losing its original, imported taste. It's not about perception. That can really happen because the locality might greatly influence the taste and flavor of the locally produced beer.

Heineken is that it must be shrewd enough to choose the business partner that has the lowest demand. The licensee must agree on a high value of fees the parent company would charge
on every bottle of beer it could sell

Answer to Q No-4
Heineken's Greenfield Investments
In 1931 the very first foreign Heineken brewery was opened near the Indonesian city of Surabaya. Two years later Heineken set up a brewery in Singapore together with soft drinks producer Fraser & Neave

Heineken setting up brewery operations

After world war-II, export became a top priority for Heineken Shortly after the war, African countries, especially in Western Africa, were top export destinations for Heineken beer

Heineken using Licensing to expand exports

From the 1970's when it began to "go international" Heineken expanded its interests by licensing agreements "Firstly, by concluding licensing agreements with various breweries in France, Ireland, Spain and Italy and subsequently by taking participation in those breweries. FDI through Collaborative Relationships In 2002 Heineken entered into an agreement with Canadian brewer Molson who acquired Kaiser in Brazil. Heineken entered into a partnership with Molson by taking a 20% participation in the new brewery group that Molson formed by merging Kaiser and Bavaria

Anheuser-Busch taken over by In Bev

On July 13, 2008, Anheuser-Busch and InBev formally informed that they had agreed to a deal resulting in InBev purchasing the American icon at $70 per share, creating a new company to be named Anheuser-Busch InBev. Post this acquisition, Anheuser-Busch got two seats on the combined board of directors.

Heineken was the unique company in the history of the global business that just after the establishment of the company, the firm started exporting in the foreign market successfully. The Heineken from its inception, became very profitable firm except a few depression in the US market, the firm grew in a very aggressive manner in the global market and became the 3rd largest beer company in the world. The key success factor of the company was, the perfect Vision and strategic objectives setting and maintaining value chain in all the company activities to maintain its best cost Brand image.