Global Forces and the European Brewing Industry Essay

1572 Words Jul 30th, 2010 7 Pages
Global forces and the European Brewing industry –Case 1

Table of Contents
Introduction……………………………………………………………2
PESTEL……………………………………………………………….2
Porter’s Five Forces…………………………………………………..4
Strengths & weakness of Companies………………………………..5
Impact of Trends on the Companies………………………………..7
Bibliography……………………………………………………………8.

Introduction
This case shows how global forces have impact on European brewing industry and how these companies are trying to overcome the obstacles. In spite of restrictions and awareness campaigning runed by the government, these companies are trying to grow through acquisitions, alliances and closures within the industry. Companies are concentrating on expanding their existence into other markets.
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Therefore it is very hard for a new entry to come in to European brewing industry.
FORCE 5: Intensity of competitive rivalry
The European market is highly competitive because of low product differentiation, lack of product innovation, high entry and exit barriers resulting in acquisition and strategic alliances of the existing players to attain the market share. The industry is in growth stage of industry life cycle which means the market is saturated therefore there is a high intensive competition in the market.
HEINEKEN:
Strengths: * It has the biggest market share in European brewery business with a sale of €11.8bn. * The company has more stability and independence to grow steadily as it is family controlled business. * Enters new market through acquiring locally established companies. * Use experts and new technologies.
Weakness:
* Lacking experts in top level as whole business is controlled by family members who may not have in-depth knowledge.
GROLSCH
Strengths: * It has huge export business, where half of its sale comes from overseas. * Innovation and branding are core strategy. * Centralization of production helps to improve efficiency and volume. * Manufacturer of flavoured beers.
Weakness:
* Lack of proper marketing strategy in local market. * Sales of company are much lesser than other competitors like Heineken.
INBEV:
Strengths: * Largest

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