Grolsch Company Case Study
BUAD 497
1. Yes, several of the major players have been actively engaging in mergers and acquisitions, leading to a more concentrated market with larger market shares for the leading firms.
2. There is not a clear leader which absolutely dominates the industry. While Heineken is the leader in the international market, Bud (Light) leads total volume. There is also no core, the leading companies in international and total volume markets differ from each other.
3. In its process of expansion, Grolsch has engaged in both cooperation with local brewers, and direct shipping from domestic factories, depending on the markets demand. For markets such as the USA that valued originality, direct shipping was used. For others that did not hold an emphasis on this, joint venture options were explored to cut costs.
4. No, standardization is not increasing. Majority of Grolsch’s sales come from its Grolsch Premium Lager, with other variations such as Amsterdam beers. Packaging was not standardized around the globe, products shipped to different markets had country-specific labels. Grolsch is also priced differently in various markets, priced at a higher price in its domestic market.
5. It implies that minimum target should be to further enhance operations, increasing production and distribution efficiencies to achieve cost reduction in order to remain profitable.
6. Variation is quite large on cross-country markets. Grolsch is priced as a premium brand in non-domestic market and a mid range standard product in the Netherlands for Grolsch Premium Lager. Also, the different products offered in different regions also make them differ in profitability. For example, the home market that accounted for roughly 50% of sales in volume generated 65% of revenues with even higher EBIT.
7. Profits are most tightly linked with volume, with national sales as it is the most profitable providing the highest EBIT and lowest distribution costs.
1. Yes, several of the major players have been actively engaging in mergers and acquisitions, leading to a more concentrated market with larger market shares for the leading firms.
2. There is not a clear leader which absolutely dominates the industry. While Heineken is the leader in the international market, Bud (Light) leads total volume. There is also no core, the leading companies in international and total volume markets differ from each other.
3. In its process of expansion, Grolsch has engaged in both cooperation with local brewers, and direct shipping from domestic factories, depending on the markets demand. For markets such as the USA that valued originality, direct shipping was used. For others that did not hold an emphasis on this, joint venture options were explored to cut costs.
4. No, standardization is not increasing. Majority of Grolsch’s sales come from its Grolsch Premium Lager, with other variations such as Amsterdam beers. Packaging was not standardized around the globe, products shipped to different markets had country-specific labels. Grolsch is also priced differently in various markets, priced at a higher price in its domestic market.
5. It implies that minimum target should be to further enhance operations, increasing production and distribution efficiencies to achieve cost reduction in order to remain profitable.
6. Variation is quite large on cross-country markets. Grolsch is priced as a premium brand in non-domestic market and a mid range standard product in the Netherlands for Grolsch Premium Lager. Also, the different products offered in different regions also make them differ in profitability. For example, the home market that accounted for roughly 50% of sales in volume generated 65% of revenues with even higher EBIT.
7. Profits are most tightly linked with volume, with national sales as it is the most profitable providing the highest EBIT and lowest distribution costs.