BEER INDUSTRY CASE STUDY
Beer industry is one of the oldest industries particular in EU as it is one of the biggest beer consumption markets. This industry has seen fluctuation of the demand and consumption of the beer over the last quarter of 20th century due to many factors. This analysis will look in to those factors by taking into account the case given and will analyze the general reasons, growth and effects of the industry keeping in mind the macro-environment and its main component such as political, legal, environmental, economical, technological, social- cultural, and international aspects. Furthermore industry analysis will be discussed in details by analyzing the critical factors such as the threats of new entrants, suppliers and buyers power on the industry, product substitutions, and alliance and merging of the companies. The details of micro-environment and industry analysis will be available in the appendices. In addition, current strategy, links between the micro-environment and industry analysis, will be discussed along with brief recommendations. The fore European brewing company will be analyzed in terms of strength and weakness. Current strategy
The beer industry has been in the existence for as long as the barley have been harvested and used for the making of the beer. The drink is mixed with alcohol in order to give it tantalizing taste with addictive quality. The beer is used as an everyday drink by many around the world and it by creating a taste and demand in the market. It probably will not be controversial, if argued that it is in the top 5 most drinkable beverage in the world. The demand of the beer has increased significantly in the last half of the century and some cultural such as German has included it, as part of their culture and celebrates beer drinking festivals annually. The industry has been facing some threats in the market due to increased number of brewery companies, who over supplies cheap beer in the market, which could possibly kill the industry. Some other new and non-traditional threats such as increased health risks, potential abuse of the beer, new legal challenges, globalization and environmental has put a question mark on the future of the industry. These threats are real and the industry needs to address them effectively and efficiently in order to survive in the future. Some of the threats are addressed by adopting new strategies, such as being environmentally friendly production line, innovation, GM foods, and many more in order to be in the market and create consumer for the future. Summary of macro environment analysis
One of the biggest current threats almost on every business is the current financial crisis and the beer industry is not immune to it at all. The global crises have forced many workers out of their jobs, increased unemployment, which means less finance to purchase basics for a everyday life. Many had to cut unnecessary activities such as going to the local pub for a drink after work on regular basis or purchasing beer off the self from super markets. The uncertain financial times have dropped the consumer confidence and most of the people are afraid of spending any money on unnecessary activates. There is very strong evidence that consumers are saving money during these crunch times. Europe has been one of the hardest hit by the financial crisis, and some of the countries such as Island were almost to the brink of the bankruptcy. This uncertainty will have huge impact on the industry in short term and will affect the profitability. The usual willing buyers might cut down to consumption of the beer significantly or even chose to switch to a cheaper brand in the market, in order to fulfill their alcohol appetite. In terms of macro-environment, it simply means the buyers becomes price sensitive. The fuel price and beer have direct relationship, since the early stages of this crisis, the fuel prices had...
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