I chose Heineken
Outline and Grading
Guide (150 points)
a case from the textbook for this assignment from the following list.
6 - AIG
9 - Heineken
11 - World Wrestling Entertainment
14 - Johnson & Johnson
19 - Fresh Direct
22 - eBay
23 - Matel
26 - Pixar
27 - Procter & Gamble
29 - Ann Taylor
Case 36 - Green Mountain Coffee
NAME, WEBSITE, and INDUSTRY
State the company name, website address, and
Briefly describe the company in the case
analysis. What is their primary business, who were the officers or key players
described in the case study? If the case study company is currently in
business, list the company’s current CEO, total sales, and profit or loss for
the last year where data is available. Identify key events or phases in the
company’s history. Describe the performance of this company in the industry. Visit
the company’s website and use http://finance.yahoo.com and/or some other
financial search engine to find this data. (15 points)
NOTE: Make sure to use
APA citations throughout the paper. The textbook should be cited if it is the
source of information. If you are not familiar with APA citation, check out the
Guidelines for Citing Sources at the end of the course Syllabus. There
are videos to help you with the APA format and business research in the Week 1
ANALYSIS VIA PORTER’S FIVE FORCES MODEL
Analyze the competitive environment by
listing the threat of new entrants, the bargaining power of buyers, the
bargaining power of suppliers, the threat of substitute products and services,
and the intensity of rivalry among competitors in the industry (Chapter 2).
Summarize your key points in a figure. (25 points)
How does this
company create and sustain a competitive advantage? What strategy from
the readings was undertaken by this company? Were they successful? Can all
companies use this strategy? How is the strategy affected by the life cycle in
the industry? Remember to reference Porter’s generic strategies identified in
Chapter 5 of the textbook, THIS IS CRITICAL. (40 points)
Choose two specific strategies from this list.
Related Diversification (pages
Advantage (pages 256–267)
Entry Mode (pages 267–272)
Entrepreneurial Strategy (pages
External Governance Control
Linking Strategic Rewards (pages
Organization Designs (pages 383–387)
Leadership (pages 392–416)
Apply them in detail to the organization. Be
sure to think strategically and show the results clearly. Use the strategy as a
sub-header for each section so it is clear what is being applied. (40 points)
OF ACTION RECOMMENDED
If you were in a position to advise this
company, what strategy would you recommend to sustain competitive advantage and
achieve future growth? Be specific and list the steps the company should take
for successful implementation of your course of action. (15 points)
What do you think of this case study?
Describe what you believe are the lessons learned from this case. (10 points)
When you have completed the paper using the
above sections, insert a page break and have a separate reference page. The
references should be listed in accordance with the APA guidelines as shown in
the tutorial. (5 points)
a title page.
Use Times New Roman, 12 point.
your name in the upper left hand corner of the page.
section of your paper should be headed by the bolded, capitalized item
page numbers bottom right.
length should be four to six double-spaced pages not including title page,
references, or illustrations and tables.
APA citations throughout the paper. If you are not familiar with APA citation,
refer to tutorial, which is contained in the last section of our course Syllabus.
a separate Reference page at the end of the paper.
prepare reference page as follows.
G., Lumpkin, G., & Eisner, A. (2012). Strategic
Management (6e). Boston: McGraw-Hill Irwin.
THE CASE AS FOLLOWS AND FOLLOW DIRECTIONS ABOVE
Case 9: Heineken*
In January 2011, Dutch brewer Heineken announced the acquisition of five breweries in Nigeria as part of its plan to expand in one of the world’s fastest growing beer markets and Africa’s second largest. The purchase will raise the firm’s market share to approximately 68 percent, giving it a substantial lead over its competitors. Nigeria’s beer market has grown at an annual rate of about 9 percent over the past 10 years, and growing sales in the country have provided a dominant share of Heineken’s profits in Africa.
The move came on the heels of the acquisition of a Mexican brewer, FEMSA Cervesa, for about $5.4 billion in 2010. The deal made the firm a stronger, more competitive player in the Latin American beer market, which has also become one of the most profitable and fastest growing markets in the world. It allowed the firm to add FEMSA’s beer brands, such as Dos Equis, Sol, andTecate, to its already vast array of offerings. Heineken had already been distributing these beers in the United States, under license from the Mexican brewery, to cater to the growing Hispanic segment of the population.
However, the firm made its most high-profile recent acquisition in 2008 when it bought Scottish-based brewer Scottish & Newcastle, the brewer of well-known brands such as Newcastle Brown Ale and Kronenbourg 1664.Although the purchase had been made in partnership with Carlsberg, Heineken was able to gain control of the Scottish & Newcastle operations in several crucial European markets, such as the United Kingdom, Ireland, Portugal, Finland, and Belgium, further solidifying Heineken’s position as the leading brewer in Europe. But the Dutch-based firm also took over the Scottish brewer’s ventures in far-flung places such as the United States and India.
These decisions to acquire brewers that operate in different parts of the world have been part of a series of changes that the Dutch brewer has been making to raise its stature in the various markets and to respond to changes that are occurring in the global market for beer. Beer consumption has been declining in key markets as a result of tougher drunk-driving laws and a growing appreciation for wine. At the same time, the beer industry has become ever more competitive, as the largest brewers have been expanding across the globe through acquisitions of smaller regional and national players (seeExhibits 1 and 2).
Exhibit 1: Income Statements (in millions of euros)
Exhibit 2: Balance Sheets (in millions of euros)
The need for change was clearly reflected in the appointment in October 2005 of Jean-Francois van Boxmeer as Heineken’s first non-Dutch CEO. He was brought in to replace Thorny Ruys, who had decided to resign 18 months ahead of schedule because of his failure to show much improvement in the company’s performance. Prior to the appointment of Ruys in 2002, Heineken had been run by three generations of Heineken ancestors, whose portraits still adorn the dark-paneled office of the CEO in its Amsterdam headquarters. Like Ruys, van Boxmeer faces the challenge of preserving the firm’s family-driven traditions while trying to deal with threats that have never been faced before.
Confronting a Globalizing Industry
Heineken was one of the pioneers of an international strategy, using cross-border deals to expand its distribution of its Heineken, Amstel, and 170 other beer brands in more than 150 countries around the globe. For years, it has been picking up small brewers from several countries to add more brands and to get better access to new markets. From its roots on the outskirts of Amsterdam, the firm has evolved into one of the world’s largest brewers, operating more than 125 breweries in over 70 countries in the world, claiming a little more than 8 percent of the worldwide market for beer (see Exhibits 3and 4).
Exhibit 3: Geographical Breakdown of Sales (in millions of euros)
Exhibit 4: Heineken Brands: Significant Heineken Brands in Various Markets