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Heineken

McGraw-Hill/IrwinStrategic Management, 3/e Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

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Heineken

1. What strategy does Heineken follow in the beer market?

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Heineken

2. What is the structure of the global beer industry?

What recent changes have impacted the structure?

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Heineken

3. What moves did Anthony Ruys make upon taking over the helm of the firm in 2002?

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Heineken

4. What challenges does Ruys face?

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Q1. Globalization challenges

Global strategy with its core brands – standardized products with strong central coordination; Heineken and Amstel are global brands

Moving toward a multidomestic strategy through acquisition of small breweries Gives Heineken brands that are known within their domestic

or regional markets Most of these brands primarily geared toward local taste

preferences and have not achieved much of a global presence

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Q2. Industry Structure

SUPPLIERS BUYERS

SUBSTITUTES

POTENTIAL ENTRANTS

INDUSTRY COMPETITORS

High – abundant choices; brand appeal difficult to maintain; brand image important

High – many alternatives for desserts/snacks (cake, pie, fruit, candy)

High – large brewers expanding globally through acquisitions; U.S. beer consumption down since 2000

High – growing appreciation of wine

High – Top four brewers (in 2004) accounted for only a third of the global market; number of local brewers operate

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Q3. Ruy’s Moves

Marketing U.S. marketing expenses increased to $51 million

vs. $35 million for Corona To appeal to younger customers, tie-in with

movies such as Austin Powers and The Matrix Possibility of launching Heineken Premium Light

to tap into the growing light beer market

Acquisitions Acquisition of small brewers – Italy’s Moretti,

Spain’s Cruzcampo, etc. Major acquisition ($2.1 billion) of BBAG in Austria

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Q4. Ruy’s Challenges

Global Competition Both Interbrew and SAB Miller became

larger through major acquisitions Lost 65 year old leadership in U.S. marketOwnership Issues Still a family owned firm with daughter

Charlene de Carvalho in charge Need to respect age old tradition and not

attempt major changes