Professional Documents
Culture Documents
Traces origins to 1366 brewery in Brussels Bought out by master brewer in 1717 Expansion in 1954 brought Leffe and Dommelsch in 1968 1987 Merger with another Belgian brewery to form Interbrew
Momentum in local market propelled Interbrew for international acquisitions Hungary, Croatia, Romania, Bulgaria and Canada in early 1990s Late 1990s Ukraine, Dominican republic, China, Montenegro, Russia and Korea
Momentum in local market propelled Interbrew for international acquisitions Hungary, Croatia, Romania, Bulgaria and Canada in early 1990s Late 1990s Ukraine, Dominican republic, China, Montenegro, Russia and Korea
80 Countries Top 10 markets account for 86% of sales 61% of Volume production came from Americas
Worlds beer market in 1998
Americas Europe Asia Pacific 5% 0% 27% 33% 35% Africa Middle East
Interbrews vision is to be within top 3 beer producers in each of the key markets Deliver high quality beers.
Domestic markets are experiencing contraction and declining sales Health consciousness trend Marketing functions of Interbrew are not attuned for global beer brand Uncertainty with developing markets in China and Russia
4th Company globally Lessen dependence on Belgian and Canadian markets Strengthen controlled brands positions Local for local, decentralized administration
Traditional and sophisticated beer Flexibility of decentralization Fierce customer loyalty Intended strategy Global brand unified campaign Emergent strategy Global brand through adaptable regional initial branding
External environment
How do politics affect us
Alcohol tax, consumption restrictions Opening of Eastern European markets in early 2000s Potential trade sanctions and tariffs
Economic trends
Eastern European and Asian financial crisis of early 2000s Rise of emerging economies
External environment
Social factors
Emergence of wine culture, especially in Australia and NZ Trend towards healthy life style: lite line of products Trend towards specialty products, microbrew
Innovations
Emergence of internet
External considerations
Opportunities that the environment presents
Opening of Asian and eastern European markets Reduction of trade barriers Converging markets
Where do we excel?
Companys performance is partially attributed to its:
Strategic operations- cross fertilization Strategic sourcing Motivated employees Successful capacity utilization Diverse product line from premium to light beers
Rivalry- intense, Anheuser-Busch, Heineken, Carlsberg, little differentiation, high exit cost
Outbound Logistics
Economies of scale in distribution
Procurement
Great relationships with limited suppliers across the board
Intangible Resources
Wide Portfolio
Very different from its competitors Key acquisitions Presence in both developing and emerging markets Best practices from different sites can be applied across the board Allows flexibility despite portfolio size Handles different tastes Can shift and adjust product mix
Decentralized approach
Organizational Capabilities
Makes strategic acquisitions Ability to leverage knowledge Focus on growth markets with long term volume growth potential Cost savings gained by purchasing and then rationalizing operations
Intellectual Capital
Human Capital
Spread globally Cultural, local and economy knowledge and expertise
Structural Capital
Breweries around the world Brand equity
Relational Capital
Corporate Strategy
OPERATIONS
BRANDS
MARKETS
INTERBREW TRIANGLE
Strategy Objective
Underlying Objectives
Consolidate the company position in mature markets Improve margins through higher volumes of premium and specialty brands
Rationalize
Worlds major markets would each end with just 2 or 3 major players
Fundamental Objective
Increase shareholder value
Operational Strategy
Cross fertilization Sharing of best practices between sites Employee propositions Improvement linked to employee motivation not technical performance Capacity Utilization Close overproducing facilities and open underproducing Strategic Sourcing Selecting small number of suppliers
Brand Strategy
Acquisition of existing brewers, in growth mature markets Identify brands, typically specialty products and them a regional basis across a group of markets
Market Strategy
Increase global volume of beer production and reduce their dependence on Belgium and Canada Establish and manage strong market platforms Decentralization corporate structure Mature markets greater efficiencies in production, distribution and marketing Growth markets build significant positions & concentrate on long-term volume growth potential
Economies of scope
Core Competencies
MERGERS AND ACQUISITIONS
4TH Largest beer company in the world Houses beers from 80 countries
Vertical Integration
Strategic sourcing
BCG MATRIX
STAR Relative Growth Rate QUESTION MARK
South Central & Eastern Europe America Asia
DOGS
Joint Venture
Enter new markets Reduce costs in the value chain Develop and diffuse new technologies Potential Limitations: Partner issues Control issues
Does the nation have favorable Factors of Production that supports the beer industry? Presence/Absence of Suppliers & related industry such as wineries, and Distilleries that are globally competitive?
Alternatives
Continue with Stella Artois
Inadequate marketing experience Old fashioned image Alcohol level inconsistence in different markets
Alternatives
No global brand, differentiation of local beers
Leverage core competencies and structure Consistent with acquisition strategy Cross cultural sharing and regional brand development Embrace Belgian Beer cafes franchise
Alternatives
Promote Interbrew as a global brand
Similar to no global brand, could be used as a tool to achieve it
Today
Interbrew no longer exists after 2 major mergers with AmBev and later with Anheuser Busch forming the biggest beer company in the world Anheuser-Busch InBev