heineken case
BPL 5100- Heineken Case Study
November 17, 2014
Heineken uses an international strategy that involves using cross-border deals to increase their distribution of over 250 beer brands in over 175 countries. The company has also acquired many different small brewers all over the world to add to their portfolio and increase access to new markets. Due to this strategy, Heineken currently operates over 125 breweries in over 70 countries and holds 10% of the global beer market. The company’s main entry mode into foreign markets involves foreign direct investment through acquisitions that give Heineken a great degree of ownership and control. They gain control of the whole brewery, so they expand by way of wholly owned subsidiaries. Heineken’s international acquisition strategy allows the company to increase market share and presence in their industry across the world, and do not have to worry about the added costs associated with creating new brands. It is difficult to pinpoint exactly what strategy for globalization Heineken has used, since they acquire these brands with already developed and successful products and allow them to stay as their own brands. I would describe Heineken’s strategy to be most similar to a transnational strategy. A transnational strategy is based on firms optimizing the trade-offs that go along with efficiency, local adaptation, and learning, where the pressures for local adaptation and lowering costs are high. A company using this strategy, seeks efficiency but as a means to achieve global competitiveness, as does Heineken. Heineken has limited its acquisitions to small national breweries, rather than gaining more growth through mega-acquisitions like its more aggressive competitors. The company’s reluctance towards acquiring larger breweries is in part due to the weakening of family control. The corporate culture at Heineken, being that it started as a family business, is more of a low-risk taking and lengthy decision making type of
November 17, 2014
Heineken uses an international strategy that involves using cross-border deals to increase their distribution of over 250 beer brands in over 175 countries. The company has also acquired many different small brewers all over the world to add to their portfolio and increase access to new markets. Due to this strategy, Heineken currently operates over 125 breweries in over 70 countries and holds 10% of the global beer market. The company’s main entry mode into foreign markets involves foreign direct investment through acquisitions that give Heineken a great degree of ownership and control. They gain control of the whole brewery, so they expand by way of wholly owned subsidiaries. Heineken’s international acquisition strategy allows the company to increase market share and presence in their industry across the world, and do not have to worry about the added costs associated with creating new brands. It is difficult to pinpoint exactly what strategy for globalization Heineken has used, since they acquire these brands with already developed and successful products and allow them to stay as their own brands. I would describe Heineken’s strategy to be most similar to a transnational strategy. A transnational strategy is based on firms optimizing the trade-offs that go along with efficiency, local adaptation, and learning, where the pressures for local adaptation and lowering costs are high. A company using this strategy, seeks efficiency but as a means to achieve global competitiveness, as does Heineken. Heineken has limited its acquisitions to small national breweries, rather than gaining more growth through mega-acquisitions like its more aggressive competitors. The company’s reluctance towards acquiring larger breweries is in part due to the weakening of family control. The corporate culture at Heineken, being that it started as a family business, is more of a low-risk taking and lengthy decision making type of