Global Forces and the European Brewing Industry

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THREAT OF NEW ENTRANTS| -Inexistence of legal entry barriers;-High initial investments in the industry;-Existence of economies of scale;-Inexistence of switching costs for costumers.| MEDIUM| THREAT OF SUBSTITUTES| -There are no switching costs for costumers;-High interest in exotic products;| HIGH| BARGAINING POWER OF SUPPLIERS| -European packaging industry is highly concentrated;-There are no substitutes for the packaging input.| HIGH| BARGAINING POWER OF COSTUMERS| -The buyers are individuals, so there is no concentration of buyers;-Low switching costs for costumers;-The product is not so differentiated and can be replaced by substitutes.| LOW| COMPETITIVE RIVALRY| -There are many players in the industry;-There is not much differentiation between player’s products; -The companies compete a lot in prices.| HIGH| ATTRACTIVENESS| | LOW|

In order to analyze the brewing industry attractiveness, we performed a Porter Five Forces Model analysis and a PEST analysis. CONTEXT| TREND| IMPACT| | | POSITIVE| NEGATIVE|

Political-Legal| -Governmental campaigns against drunken driving;-Governmental campaigns towards health problems because of alcohol;-Free-circulation of goods and capitals in the EU;-Alcohol consumption limits policies in some countries.| -There are no barriers for trades and that is positive in a market that is so global.| -Growing consumer’s awareness for health problems and drunken driving.| Economical| - Slowdown of economic grow rate in Europe countries;-Exponential economic growth in markets like China, India and South America.| -In the non-European market there are a lot of opportunities of growth.| -There are some challenges in the European market, because of the slowdown of beer consumption.| Socio-Cultural| -Growing awareness for health problems and fitness;-Increasing hostility towards “binge drinking”;-Growing interest in...
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