Heineken environment analysis
Heineken environment analysis
External analysis of the company
Porter’s five forces model
The bargaining power of suppliers
The suppliers of raw materials to Heineken Company are mainly farmers. Therefore, the threat for power of supplier is high. The bottle supplier for Heineken is provided by Heye Glas Nederland which is fully supplied the green bottle for the worldwide distribution of Heineken beer.
In the past, Heineken kept only 33% its stake in Heye Glas in order to secure the supply of high quality export bottles at a lower cost to meet the needs for demand but now Heineken has kept 100% stake in 2002. Beer is produced by water, barley, hops and yeast. These ingredients are supplied by farmers. Heineken also mentioned that competition for agricultural products from the biofuels industry that is affecting their costs.
The bargaining power of buyers
The buyers in this industry have many choices as there are many companies serving beer. This will increase the choice of the customer and hence the threat for power of buyers is high. For example, for serving customer at the pub, there are a lot of beer brands for them to fit their taste such as Guiness, Carlsberg, Tiger. Therefore, buyers now have a choice to choose the one they like. As a result, choosing of customer for what kind beer they want to drink will bring threats for Heineken.
The threat of potential new entrants
Nowadays, an explosion of smaller brewers has entered the market during the past decade that making the industry much more competitive. Heineken is one of the largest brewers in the world and they have to share market with other brewer. The barrier in the beer market is low. Therefore, the threat of potential new entrants for Heineken is high. This will make Heineken considering to create innovation or uniqueness into their product that can sustain competitive advantages in the beer market.
The threat of substitutes
Beer is a kind of beverage which contains alcohol.
External analysis of the company
Porter’s five forces model
The bargaining power of suppliers
The suppliers of raw materials to Heineken Company are mainly farmers. Therefore, the threat for power of supplier is high. The bottle supplier for Heineken is provided by Heye Glas Nederland which is fully supplied the green bottle for the worldwide distribution of Heineken beer.
In the past, Heineken kept only 33% its stake in Heye Glas in order to secure the supply of high quality export bottles at a lower cost to meet the needs for demand but now Heineken has kept 100% stake in 2002. Beer is produced by water, barley, hops and yeast. These ingredients are supplied by farmers. Heineken also mentioned that competition for agricultural products from the biofuels industry that is affecting their costs.
The bargaining power of buyers
The buyers in this industry have many choices as there are many companies serving beer. This will increase the choice of the customer and hence the threat for power of buyers is high. For example, for serving customer at the pub, there are a lot of beer brands for them to fit their taste such as Guiness, Carlsberg, Tiger. Therefore, buyers now have a choice to choose the one they like. As a result, choosing of customer for what kind beer they want to drink will bring threats for Heineken.
The threat of potential new entrants
Nowadays, an explosion of smaller brewers has entered the market during the past decade that making the industry much more competitive. Heineken is one of the largest brewers in the world and they have to share market with other brewer. The barrier in the beer market is low. Therefore, the threat of potential new entrants for Heineken is high. This will make Heineken considering to create innovation or uniqueness into their product that can sustain competitive advantages in the beer market.
The threat of substitutes
Beer is a kind of beverage which contains alcohol.