Grolsch, a company with a strong history and a highly rated product, has just been purchased by SABMiller. The company is evaluating its global strategy in light of the acquisition and determining how to position and sell its beer going forward. Grolsch has positioned itself well to compete internationally and has leveraged several tools (e.g. the MABA framework, strategic analysis) to effectively expand abroad. However, they must assess whether or not the MABA framework is still useful, what type of international strategy they should pursue (i.e. developed vs. developing markets), and if their adaptation strategies will continue to be an asset in their business development. The initial conclusion, detailed below, is that Grolsch should expand the MABA framework while also leveraging and recognizing the value of SABMiller’s distribution network. They need to maintain focus on international markets, looking at both developed and developing markets to diversify growth opportunities. Success for Grolsch depends on how well they can identify markets where their high-end, premium product will be desirable. But, it will also depend on their ability to adapt the brand image and marketing approach based on the cultural differences of the foreign markets they enter. The subsequent presentation contains exhibits and analysis that support and further develop these conclusions. Industry overview
Before assessing Grolsch’s global strategy and approach, it is important to understand the beer industry overall from a strategic perspective. Two helpful methods for doing this are Porter’s Five Forces and a PEST analysis. Analyzing Porter’s Five Forces for the beer industry can provide insights into the reasons for the underlying economics and general competitive situation (see exhibit 1). The five aspects include competitor rivalry, suppliers, buyers, substitutes, and new entrants / barriers to entry. A PEST analysis helps in understanding the macro-environmental factors such as market trends, market potential, business positions, and direction for future operations (see exhibit 2). The four components of PEST include Political, Economic, Social, and Technological factors affecting the industry. These frameworks are useful in providing a basis for analyzing Grolsch’s global strategy. Insights are referenced in this paper, but details contained within each framework are primarily discussed in the exhibits so as to focus on core questions related to Grolsch’s global strategy. Grolsch’s early globalization
Although Grolsch was founded in the 17th century, it was not until the 1970’s and beyond that they began to expand internationally. The reasons for this were twofold: Stagnation in the home market and success by others expanding internationally. As with most businesses, Grolsch recognized the only feasible means for increasing revenues is to sell more beer to their current customers in the Netherlands or find new customers elsewhere to whom they could sell their beer. After years of Grolsch’s and Heineken’s success in their home country increasing, sales began to stagnate and shrink in the 1970’s. This left the option of expanding to other markets where Grolsch was not already sold in order to increase revenues, often through stealing share from competitors in those foreign markets. The second reason for Grolsch’s global expansion was as a result of Heineken’s success. As Grolsch’s larger rival in the Netherlands, Heineken had been ‘making impressive headway’ in exporting beer to foreign countries. Further, Heineken’s success led to the merger with Amstel, further strengthening their position domestically and internationally. These conditions led to Grolsch pursuing international exporting of its beer. By 2007, 51.5% of Grolsch’s sales came from exports. Grolsch’s adaptation and international strategy
As Grolsch globalized, it was forced to adapt to changing market conditions. The Asian...