Written Case #5: Heineken

Required Written Case Assignment No. 5

I. Statement of the Problem

The main problem of the company is the overall market share of the company is
declining.
II. Strategic Analysis
SWOT Analysis
STRENGTHS WEAKNESSES
 The company is the pioneer of the  The company is playing safe or has a
international strategy in the industry. conservative culture.
 The company can invest globally.  The brand was discerned as an
obsolete brand by young drinkers.
 The company uses the transnational
strategy to expand its presence  The company is acquiring small
around the globe. breweries rather than merging with big
companies.
 The company has a strong brand
portfolio.
 The company engages in product
differentiation.
 The company changes its
management.
 The company has developed its brand
image.
OPPORTUNITIES THREATS
 Raise awareness of the brand to  Continuous aggressive consolidation
various markets with growing demand, of competitors.
especially in developing countries.
 Restriction imposes on alcoholic
 Aggressive acquisition of breweries in beverages in the other country.
Russia provides a significant market
 The company is in danger of
share because of an increasing
becoming a tire, reliable, but
population and beer consumption.
unexciting brand.
 Capture the heart of the young
drinkers through aggressive marketing
 campaigns.

III. Alternative Courses of Action

 Incorporate an Integrated Marketing
The company must go beyond traditional marketing and work hard to
increase awareness and reach the other potential market and younger drinkers.
By this, the company can grow its market share and provide a competitive
advantage.
 Sustainable global expansion
The company should continue expanding its presence around the world.
The company must take advantage to utilize the capacity for investments.
Merging with other big companies and competitors provides the company to
become a global player and match or surpass the recent moves of the big
competitors. Further, the company must consider glocalization. Distribution of
the product adjusted to the local market, culture, belief, policies, and norms of
the foreign market will patronize by that market and rise to popularity.
 Continuous improvement of the product quality
Enhancing the freshness of the beer, having tasty, healthy, and flavorful
products, high-quality raw material, improving the packaging and pricing, and
engaging in e-commerce can be drivers to enhance the product quality and
eventually achieve customer satisfaction.
IV. Discussion
Given that the company is one of the pioneers of the international strategy, the
company followed the differentiation strategy and transnational strategy. The company
offers a variety of products, has a strong brand portfolio and centralization of control at
the top management enable a global competitive advantage. The structure of the beer
industry is that it has intense competition as there is a growing number of consolidations
within the industry. There is a change in management of the company wherein the
company appointed a non-family CEO. This change was followed by the adjustment of
centralizing the control and reducing hierarchy to speed up decision- making process.
Another, the company is finally trying to get off in playing-safe zone and engage in
aggressive acquisitions. Also, the company worked hard to increase awareness among
young drinkers.
V. Recommendation
 This paper presents the problem of Heineken’s challenges in the declining
market share. The company focuses on acquiring small brewers from various countries
to get better access to new markets and gain a dominant position while the competition
improves growing mergers and acquisitions. The beer industry has been undergoing a
furious wave of consolidation. However, the company is reluctant to match the recent
moves of the formidable competitors. These resulted in a decrease in overall market
share. One action identified to amend the issue is to incorporate advertising. Another is
to have a sustainable global expansion that encourages the company to acquire big
companies and consider the glocalization.
The company can incorporate integrated marketing, sustainable global
expansion, and continuous improvement of product quality. These courses of action
present a benefit and risks. Compiling these alternatives contributes to the company
increasing its overall market share and creating a sustainable strategy.