MUSTAHID ALI MBA-3 ROLL NO. 1334
[Grolsch: Growing Globally]
Case analysis
Grolsch: Growing Globally
Q.1 Why did Grolsch Globalize and how well has it performed internationally? Reasons for Global Expansion: Grolsch faced less demand in Netherland (Home) to its products in 1970’s. At the same time its rivalry Heineken was moving impressive in an international market. Grolsch acquired German brand called as Wickuler due to which the capacity of Grolsch was doubled. Grolsch also bought Ruddles, UK brand to create distribution network for its own brands. In 1990, Eastern Europe started opening up which resulted an investment in Poland & Russia. Although Gorlsch acquired aforesaid brands Wickuler was sold to to another German brand
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5) Communicating value is crucial. MABA is a tool used by the employees to judge the ranking/standing of a country in terms of investment priority after assessing various factors to judge the distance between the new market and the home market. For eg: Language difference (Cultural), EU Membership (Administration), cost of transport (Geography) and GDP (Economic) are factors for Market Assessment and total volume growth, variable commercial contribution
Q.4 How to compete in the Markets Targeted, particularly in modes of entry?
According to Grolsch the best way to enter a market is in cooperation with importers,
distributors, brewers and retailers. A change suggested in Grolsch’s historic strategy is not to adapt the market completely in this case because it is an industry that gives importance to the country-of-origin. Markets Targeted: South Africa: Monopoly Market, No.1 SABMiller (Market Share: 98%) Brazil: Occupied by major Brewery Groups. China: Competitive Market. How to Compete: South Africa Brazil China Additional Line with SABMiller Co-Promotion with SABMiller
License out to Local Companies Marketing Research
Intensive Promotion Support Co-promotion with JV
Q.5 What other changes would you suggest to Grolsch’s historical Strategies? I suggest that Grolsch use a global strategy in the future. They should continue to offer the standard products of the Grolsch premium Lager and
In this paper I will be talking about the U.S. beer industry and in short an overview of the brewing industry worldwide. I will talk about the barriers to entry, economies of scale, government intervention, pricing, current market trends, product differentiation, and imports. The focus being mainly on the U.S. brewing industry oligopoly. The U.S. brewing industry has three major players: Anheuser-Busch, SAB Miller, and Coors/Molson. Anheuser-Busch is currently the largest brewer in the world, producing over 100 million barrels a year. Anheuser-Busch currently owns over 50% of the market in the United States, with Miller trailing behind at 20% and Coors at about 11% with the rest of the market occupied by imports and craft breweries. When analyzing any industry, how easy it is for newcomers to enter the market is a great importance. If there are high barriers to entry
Boston Beer Company (BBC) has enjoyed much success with their craft beers with Samuel Adams as their main focus. Being the leader of this segment, overtopping five of their competitors combined (Exhibit 1), the company now must decide how to take advantage of the light beer market. Boston Lightship, their current light beer, had been a small contributor in BBC’s product line. Currently, it is facing dwindling sales with product volumes down from 12 000 cases per month to 3000 cases per month.
SABMiller and Diageo are two largest beer producer in Africa. ”SABMiller, if combined with its partnership with France's Castel Group, sells roughly 60% Africa’s beer by volume. Diageo’s also expands its operation successfully that Senator Keg, its supercheap beer, is also now number two most popular beers in Kenya. As these giant brewers monopolized Africa’s beer market, it can be said that the market has an oligopoly market structure, and both pursue identic operations, so the market can be labeled as competitive. The interdependence that is happening between both brewers makes the competition happens. As SABMiller produces Impala that is half price from its previous beer Manica, Diageo produces Senator Keg to balance it. Diageo
Political –Governments tend to exercise significant control over beer as it contains alcohol which has caused many problems in society and has addicted people. This attention from the government will affect Heineken in sale volume in the market. Many governments have imposed heavy taxes on liquor and beer imports, and with globalisation many brewers are looking for new markets where they can gain maximal profits. This proves to be a threat for Heineken. Heineken must conduct thorough research on countries policies on alcohol such as drinking in public, alcohol contents in drinks, legal drinking ages and must strategically plan their integration into these markets based on the research.
iii. Import beer companies: These companies include Beck’s(Germany), Heineken (Holland) and Corona (Mexico). They control about 12% of the region’s market. However, these companies are seen to operate at disadvantage due to higher shipping costs, weaker distribution networks and an inability to control product freshness
Germany is an excellent country to expand new products and services into as it is located in the heart of Europe, following a constitutional monarchy with a parliamentary government and a Prime Minister which has the power to appoint and remove ministers. As a member of the G8, Germany contributes significantly to the world 's economy. The Gross Domestic Product in Germany was valued at USD $3634.82 billion in 2013 which is equivalent to 5.86% of the world’s economy. In Germany, more than 95% of the population speaks German as their first language.
As the world’s largest brewer, AB Inbev has the ability to compete in new and foreign markets as a strong threat. Due to their enormous capital and expansion-based strategy, they can enter any market as a challenger and shutdown competition to become the leading brewer in this market. As an aggregated note we can also see this in domestic or already dominated markets because due to economics of scale they can achieve differentiated products at a low cost.
In 1999, the CEO of Companhia Cervejaria Brahama (largest brewer in Brazil) was considering the bit for Antarctica (second largest brewer in Brazil). The purpose for this merger was to exploit the potential synergies and avail the economies of scale. The secondary motive was to raise the barriers to entry to the industry
Q3. Which changes would you suggest for Red Bull's future global marketing mix, in order to meet the future challenges?
That is undoubtedly case for Heineken. Analyzing its strengths and weaknesses it is clear that Heineken wasn’t a truly a global brand at the time the case was written, but was working on it. The confirmation of this is that the company’s presence in more than 170 countries all over the world. The brand is nationwide recognized, as a brand that was established in 19th century and from a local beer became a global icon. Heineken by working so hard on standardizing the brand image achieved its results. The goal for Heineken at the time was to build a demand for the product. In countries where the beer market is already mature like Japan, Australia or Spain Heineken never stopped growing. The obstacle for Heineken to become a global company was connected to the fact that Heineken’s marketing communication in many different countries was not consistent. Another obstacle that Heineken overcame over the years was the fact that it was difficult for the company to overcome the image of its beer as only for special occasions. To be global, Heineken must create the image and perception that Heineken is a daily beer. Also as of 1993, Heineken was associated in countries like Latin America as just only regular imported beer. To become global, the company needs to create advertising campaign in those countries emphasizing values of imported beer to build brand value and attract different customers. To be global Heineken needs to standardize its image and make it consistent
SABMiller is a leading brewing and beverage company that concentrates on delivering refreshment and sociability to millions of people globally. Over its 120-year history, SABMiller has produced over 200 beers in more than 80 countries, appropriating the title as the second largest brewer in the world. Not only does it focus its efforts in the alcoholic beverage industry, but also as a company formulating sustainable efforts to make a change in the world and society today.
Despite the dominance of Carlsberg, in its annual report BGD could lay claim to being the largest Scandinavian beer exporter. This was because Carlsberg placed emphasis on licensing agreements or local production for its foreign markets, while BGD’s strategy was export led: ‘Eighty-three out of every hundred bottles of beer that we produce are sold in foreign markets.’ By 1995 the percentage of export sales by region of the world was as follows: western Europe 63 per cent, the Americas 10 per cent, eastern Europe 22 per cent, others 5 per cent. The development of BGD’s operations in some of these markets is now reviewed.
1.) Why do companies like Pepsi need to globalize? What are the various ways in which foreign companies can enter a foreign market? What hurdles and problems did Pepsi Face when it tried to enter India during the 1980s?
|What do you see as the key success factors for firms in the global beer industry? |
SABMiller plc ranks as the world's second largest brewer in terms of volume, trailing only Anheuser-Busch Companies, Inc. Although now based