Strategic Management and Strategy

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Section A

Q1: What is the essence of Heineken strategy? Acquisition or Brand building?

Heineken is the world's most international brewer and the world's second largest brewer by revenue. Heineken's key focus is driving the growth of its brands and improving its financial performance by ensuring that all directly controlled operations and partnerships create value. The Company is also focused on enabling its employees to use their potential and building a true performance-based culture. Heineken aims for sustainable growth and to be a leading brewer in each of the markets in which it operates and to have the world's most prominent brand portfolio. The Heineken brand plays an important part in this. Heineken also establishes broad leadership by acquiring strong brands, which are combined into a new, larger portfolio. This results in economies of scale for both local beers and the Heineken brand. If a premium segment does not exist in a certain market yet, Heineken devotes all of its energy to developing it. Heineken aims at achieving number one or number two positions in the markets where it chooses to operate. The main issue surrounding the company is to establish a strong global brand which is standardized across all the countries in the world. Heineken, in its Project Comet, has defined five components of Heineken’s global brand identity and has explored how they should be expressed in Heineken brand communicators. Project Mosa has also involved a different team of executives and identified the expressions of taste and friendship that had the most appeal and explored how they should be expressed in Heineken television advertising worldwide. The aim was to make sure that both the projects were mutually consistent and together work towards standardization of Heineken’s brand image and advertising worldwide.

Q2: What are the advantages of acquisitions in building global reach? And what are the problems?

Leading businesses are constantly on the lookout for acquisition opportunities in high value-growth markets

Some leading businesses have created partnerships and alliances with other companies in the industry to build the critical mass necessary for distribution scale and efficiency in key markets. Heineken USA, for example, has struck a deal with the Mexican brewer FEMSA Cerveza to gain an edge in that market. Heineken USA will benefit from greater scale and from the broader portfolio of brands, which will allow the company to increase its leadership in the import segment. And Anheuser-Busch uses third parties—including local Heineken companies—to brew and sell its leading brand, Budweiser, under license in Italy, Russia, Argentina and Spain, among other countries. Q3. Would you recommend following the Heineken strategy or the strategy of its rivals?

• Some of Heineken's competitors have success in acquisition strategy like Inbev and SAB Miller have growth rapidly than Heineken.

Let look as SAB Miller Breweries Strategy (the 3rd brewery in the word)

• Remain the strong financial support from its home country brand

• They choose the long term potential for acquisition such as central Europe, Africa, China, and India.

• Have good control and remain profit over the acquisition process such as Columbian, Bavaria acquired

• Always looking towards the future and following the business cycle of industry “have never purchase size to sake of size”

Section B

1.Cost reduction strategic
2.Resource based view (7 elements)
The resource-based view emphasizes the internal capabilities of the organization in formulating strategy to achieve a sustainable competitive advantage in its markets and industries. If we see the organization as made of resources and capabilities which can be configured (and reconfigured) to provide it with competitive advantage, then its perspective does indeed become inside-out. In other words, its internal capabilities determine the strategic...
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