MGMT 661 Business Environment And Strategic Management

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MGMT 661 Business Environment and Strategic Management

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This case deals with a firm that had been a pioneer in establishing itself as a global competitor in the beer business, gaining recognition around the world based on its well-known green bottle. Heineken had to respond to a wave of massive consolidation in the beer market. Many beer brewers had been moving aggressively to establish themselves as global players by acquiring smaller regional and national players. Jean-Francois van Boxmeer was appointed as Heineken’s first non-Dutch CEO in October 2005. Since his appointment, Heineken restructured itself to increase its ability to respond to the megaacquisitions done by its formidable competitors such as Belgium’s Anheuser-Busch InBev and South Africa/United Kingdom’s SAB Miller. Heineken entered into a joint venture deal with Denmark’s Carlsberg to acquire Scottish-based brewer Scottish & Newcastle, and most recently had acquired breweries in Nigeria, Ethiopia, and Mexico. This would help establish Heineken as the leading brewer in Europe, the second largest in Africa, and a supplier to the growing Hispanic population in the United States. The firm was also in talks to buy the Brazilian unit of Kirin from its Japanese parent. This acquisition would double Heineken’s share in Brazil to 20 percent, adding to its regional portfolio which included Mexican brewer FEMSA Cervesa. This made Heineken a stronger player in both Latin and South America. In Asia Heineken had strengthened its position by taking full ownership of Asian Pacific Brewers, and was planning to launch Bintang, its biggest selling beer brand in Indonesia, into the UK and select European markets. Heineken had needed to raise its stature in its various worldwide markets and respond to the changes that were occurring in the global beer industry. The firm had evolved into one of the world’s largest brewers, operating more than 190 breweries in over 70 countries, and claiming about 10 percent of the global market for beer. In the wake of furious consolidation in the industry, were the current strategies effective? Discussion Questions:1. What strategy does Heineken follow in the global beer market?2. What is the structure of the global beer industry?3. What changes has Heineken made that will help it deal with its challenges?

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