Western European Brewing Industry Case Study
Managing Strategy – Case 1
PESTEL ANALYSIS:
Political Factors – In the recent years, governments are campaigning strongly against drunken driving which has affected the tendency for beer consumers to drink in restaurants and bars. It has shifted beer sales to off-trade (retail) which is dominated mainly by large supermarket chains like Tesco or Carrefour. Globally, the off-trade volume boomed from 63% in 2000 to 68% in 2008, which represented an 8% growth
Economic - As part of the government campaigns to fight against drunk driving and excessive alcohol consumption, the elevation of beer-related taxes has led to inflated prices especially towards the area of on-trade. Coupled with the inflation of various cost of making beer, the breweries are likely to bear the shrink in profit margin if the prices are bound to stay at the same level to prevent loss of demand.
Social Factors – The government campaigns on anti-excessive drinking for health and fitness reasons coupled with the evidence of death and injuries caused by drunk driving, the shadow of the negative effects of beer has grown substantially. On the other hand, the relatively more healthy and high-end image of wine drinking has become increasingly popular especially in Northern European countries.
Technological Factors- High-tech brewing facilities has enhanced the efficiency of the entire beer manufacturing cycle, resulting in better energy saving, shorter maturation and packaging lead time and less wastage. Such technologies have also allowed brewers to come up with innovative products such as the non-alcoholic and fruit-favored beer relatively easier.
Environmental Factors- The demand of beer in large developing economic entities such as China, India and Latin America countries has grown exponentially in the past decade. An example of this would be how Tsingtao Beer was nowhere to be seen in the top ten brewers in year 2000 but has grown to top six in 2009. With the recent changes in
PESTEL ANALYSIS:
Political Factors – In the recent years, governments are campaigning strongly against drunken driving which has affected the tendency for beer consumers to drink in restaurants and bars. It has shifted beer sales to off-trade (retail) which is dominated mainly by large supermarket chains like Tesco or Carrefour. Globally, the off-trade volume boomed from 63% in 2000 to 68% in 2008, which represented an 8% growth
Economic - As part of the government campaigns to fight against drunk driving and excessive alcohol consumption, the elevation of beer-related taxes has led to inflated prices especially towards the area of on-trade. Coupled with the inflation of various cost of making beer, the breweries are likely to bear the shrink in profit margin if the prices are bound to stay at the same level to prevent loss of demand.
Social Factors – The government campaigns on anti-excessive drinking for health and fitness reasons coupled with the evidence of death and injuries caused by drunk driving, the shadow of the negative effects of beer has grown substantially. On the other hand, the relatively more healthy and high-end image of wine drinking has become increasingly popular especially in Northern European countries.
Technological Factors- High-tech brewing facilities has enhanced the efficiency of the entire beer manufacturing cycle, resulting in better energy saving, shorter maturation and packaging lead time and less wastage. Such technologies have also allowed brewers to come up with innovative products such as the non-alcoholic and fruit-favored beer relatively easier.
Environmental Factors- The demand of beer in large developing economic entities such as China, India and Latin America countries has grown exponentially in the past decade. An example of this would be how Tsingtao Beer was nowhere to be seen in the top ten brewers in year 2000 but has grown to top six in 2009. With the recent changes in
References: List BBC, 2010, “Bad Times for Beer”, http://news.bbc.co.uk/1/hi/business/1468932.stm Blee, M & Whittington, R., 2010, Global Forces and the Western European Brewing Industry. Brussels: Euromonitor. Data Monitor Inc., 2011, Heineken N.V. New York: Data Monitor Inc Lawrence, P. & Edwards, V., 2000, Management in Western Europe. London: Palgrave Macmillan Lorat, N., 2009, Market Audit and Analysis. Boston: GRIN Verlag Schmitt, C., 2011, Brewing Industry Analysis. Boston: GRIN Verlag Stewart. G, 2000, Sales & Marketing Director of Whitbread PLC (today part of the Interbrew group), reported in The Grocer, 6ht May 2000, in Key Note on “Premium Lagers, Beers & Ciders”, Markt Report Plus ^ PESTLE analysis history and application, CIPD. Retrieved 2009-10-21.