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...Industry/Market Analysis Industry Size With annual sales in excess of £18 billion each year beer is undoubtedly a huge market in Britain. Information from Euromonitor shows that the UK Beer Market size is of 4, 364.3 million liters in 2013, a number that has consistently been decreasing since 2011 where the total volume was of 5,152.3 million liters2. Along with the volume size, the Consumer Expenditure on Beer was of 3,984.3 million £ in 2013, a number that represents a diminution in three consecutive years since 2011. As for the general alcohol consumption, it goes up to £15 billion per household. The beer industry is extremely competitive as Britain has more breweries per head of the population than any other country with a total number of 1285. There is currently one brewery for every 50,000 people in the UK. Trends In Britain sales of mainstream beer are currently in decline, as consumers seem to be drinking less beer in general. However the number of microbreweries are increasing and Britain can now boast that they have over 1,000 microbreweries; many of which are branching away from traditional styles and are experimenting with different flavours. More adventurous, new and creative beers have been doing very well 2014. This being said craft beer is no longer being considered a niche market as it is becoming more and more popular in the UK with one third of the population stating that they associate craft beers with high quality that they would be willing...
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...1. The U.S. brewing industry has become more concentrated over the last two decades for several reasons. a. The consumption of beer has been slowly declining, in order for companies to gain market share, they have to take customers from other companies. This would then lead to some companies to go out of business due to the lack of customers. b. Brand loyalty also increased. Advertisement played a large role. Larger companies were able to spent $0.40 per case of beer sold. Smaller mass-market brewers could not afford to spend near that amount. c. Technological change in canning and distribution lead to the concentration of the brewing industry, as well. The size that a mass-market brewer has to accomplish to acquire all economies of scale has grown. They must produce more beer and achieve more market shares. Not all companies reach minimum efficient scales of production. 2. The competitive structure of the brewing industry using Porter’s five forces model. a. Risk of entry by potential competitors. New micro brewing companies have low barriers of entry. New micro brewing companies do not rely heavily on brand loyalty or economies of scale. Mass market brewers our faced with higher barriers to entry because of brand loyalty of customers and absolute cost advantages. b. Intensity of rivalry of previously established companies new customers are always entering the market as they become legal age and the willingness to consume beer, so mass market brewers try to appeal to them...
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...Introduction The purpose of this briefing paper is to analyse the data given from the case study to determine the impact and consequences global forces have, by using the PESTEL framework. This framework is used to help form a strategic analysis of the macro-environment; the outside factors beyond the control of a company. It categorises the environmental influences into six groups: political, economical, socio-cultural, technological, environmental and legal; making up the acronym PESTEL. Analysis Political factors Europe has traditionally been seen as the centre of the beer brewing industry. However, the level of alcohol consumption is gradually declining. This is because many of the key markets within Europe are increasingly more aware of the social and health issues caused by excessive alcohol consumption. Governments are actively campaigning against the abuse of alcohol and the possible consequences of drunk driving, ‘binge drinking’, and the long-term effects related to health. These key factors relate directly to government policies and their decisions towards the European beer market. Economic factors As a result of government intervention, there has been a marked decrease in product sales in public premises. As people are more and more likely to drink at home rather than out to bars, the alcohol sales has shifted from ‘on-trade’, where beer is consumed on public premises, to ‘off-trade’, where beer is purchased by retail and consumed on private property...
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...GLOBAL FORCES AND THE WESTERN EUROPEAN BREWING INDUSTRY DATE OF SUBMISSION: 09/02/2012 1. (i) PESTEL ANALYSIS OF THE WESTERN EUROPEAN BREWING INDUSTRY The PESTEL framework provides a comprehensive list of influences on the possible success or failure of particular strategies (Johnson et al, 2008, p55). PESTEL stands for Political, Social, Technological, Environmental and Legal. Political- Governments in Europe were campaigning strongly against drunken driving. This affected the propensity to drink beer in pubs and restaurants. Economic- Some low consumption European markets have been showing good growth. Pubs have suffered as a result of large supermarket chains such as Tesco and Carrefour who often use cut price on beer to lure people into their shops. The result was that an average of about 50 pubs closed per week during the recessionary year 2009. Social- There was increasing awareness of the effects of alcohol on health particularly in the UK. This led to a growing hostility to excessive alcohol consumption in pubs. Beer consumption in the UK as well as in Germany began to fall as a result of this. Wines were becoming increasingly popular as Europe was turning off beer. There was an increasing demand for Exotic imported beer more especially in Belgium, Denmark, Finland and the Netherlands according to Table 2 of the case study. (ii) FIVE FORCES ANALYSIS OF THE WESTERN EUROPEAN BREWING INDUSTRY According to Johnson et al (2008),...
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...Western European Brewing Industry Case Study Question: 2. For the breweries outlined above explain: (a) How these trends will impact differently on these different companies; and (b) The relative strengths and weaknesses of each company. (A) Impact of these trends. 1. InBev (Belgium/brazil) • INBev is a merger of two companies Anheuser and Busch and hold the top spot in the world’s top 10 breweries. • INBev is known for being the world’s largest brewing company through mergers and acquisitions and has a 25 percent global market share • By diversifying its enterprise into many countries outside of Europe (where the consumption of beer was increasing), has helped the companies continued success. • INBev are geographically diversified with a balanced exposure to developed and developing markets and leverages the collective strengths of its approximately 155,000 employees based in 25 countries worldwide. • The corporation has a significant position in the Latin American market. • INBev occupies 50% of the US market and 50% of the Mexican market. • The company is established in countries where the consumption of beer is rising. • Revenue of 47 billion US dollars in 2014 • INBev has around 200 beer brands and continues to forge strong connections with consumers. The global brands included are Budweiser, Corona, Stella Artois, Beck’s, Leffe, Hoegaarden, Bud Light, Skol, Brahma, Antarctica, Quilmes, Victoria, Modelo Especial, Michelob Ultra, Harbin, Sedrin, Klinskoye...
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...Chapter 6 – Organisational Culture Assessment Instrument (OCAI) 6.1 Competing Values Framework The Organisational Culture Assessment Instrument (OCAI) is based upon the Competing Values Framework. An average count of around 40 dimensions return regularly in management literature, essays and courses about organisational culture. For example: strength, congruence, strong, weak, speed of feedback, degree of risk-taking, people orientation, response to the environment, clarity, direction, conflict resolution, performance emphasis, and human resources. All these phrases are divided in 4 quadrants by • Horizontally: left: internal focus and integration to right: external focus and differentiation. • Vertically: top: flexibility and discretion to bottom: stability and control. This framework is called the Competing Values Framework and is used as a basis for many methods and theories. For example the Competing Values of Total Quality Management32 are shown below: Total Quality Management (TQM) is one of the most applied organisational change methods in the last two decades. It is focused on increasing an organisations’ effectiveness by setting quality objectives. The number of successful implementations of TQM is not sky-high, Cameron and Quinn derived from TQM literature that this has mainly two causes33: 1. only partial deployment; 2. failure to integrate TQM and culture change. Each quadrant is named after its most recognisable characteristics: Family or Clan, Adhocracy,...
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...Global forces and the Western European brewing industry Mike Blee and Richard W h i t t i n g t o n ~" s case • Western •:-petitive 5 zausing i-z -.—.nth closures is centred Europe pressure on the European and examines of operating through brewing industry increasingly markets alliances in the how the within global consolidation within acquisitions, This has resulted the industry. reliance of the brewers' upon super-brands. - :~e e a r l y y e a r s of t h e 21st c e n t u r y , E u r o p e a n b r e w e r s ^ : e d a s u r p r i s i n g p a r a d o x . The t r a d i t i o n a l c e n t r e of t h e -=-.-.' i n d u s t r y w o r l d w i d e a n d h o m e to t h e w o r l d ' s l a r g e s t : - = w i n g c o m p a n i e s , E u r o p e , w a s t u r n i n g off b e e r . B e e r : : " s u m p t i o n w a s falling in the largest m a r k e t s of G e r m a n y = r d t h e U n i t e d K i n g d o m , w h i l e b u r g e o n i n g in e m e r g i n g ~ a ~ k e t s a r o u n d t h e w o r l d . In 2008, E u r o p e ' s _ largest a ~ k e t , G e r m a n y , r a n k e d o n l y 5 t h in t h e w o r l d , b e h i n d ~ • ria, t h e U n i t e d S t a t e s , B r a z i l a n d R u s s i a . C h i n a , w i t h I'—, a n n u a l g r o w t h b e t w e e n 2003 and 2008, h a d b e c o m e " r . a r g e s t s i n g l e m a r k e t by v o l u m e , a l o n e a c c o u n t i n g : - 2 3 % of w o r l d c o n s u m p t i o n [ E u r o m o n i t o...
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...Year of establishment and very brief history Heineken International is a Dutch brewing company, founded in 1864 by Gerard Adriaan Heineken in Amsterdam. It owns over 190 breweries in more than 70 countries and employs approximately 85,000 people. Cruzcampo, Tiger Beer, Żywiec, Starobrno, Zagorka, Birra Moretti, Ochota, Murphy’s, Star and Heineken Pilsener are some of it’s well known brews all over the world. Milestones of Heineken history; 1864 Gerard Adriaan Heineken buys the Haystack brewery on February 15th 1873 On January 11, HEINEKEN’s Bierbrouwerij Maatschappij N.V (HBM) is established. 1889 HEINEKEN is honored with the "Diplome de Grand Prix" at the World’s Fair in Paris 1900 HEINEKEN imports first beer into Africa. 1932 HEINEKEN co-founds Malayan Breweries and starts to brew Tiger for the first time 1933 After 13 years of prohibition, Heineken® sets foot on American soil 1937 HEINEKEN’s Nederlandsch-Indische Bierbrouwerij Maatschappij, Multi Bintang, begins operation 1939 HEINEKEN is listed on the Dutch stock exchange 1946 HEINEKEN enters Nigeria 1968 HEINEKEN acquires Amstel, its major rival in The Netherlands 1974 HEINEKEN acquires a majority stake in the Dreher Group 1975 A new Dutch brewery opens in Zoeterwoude, the largest modern brewery in all Europe at the time. 1991 The former Amsterdam brewery on the Stadhouderskade is converted to a Heineken museum which was renamed Heineken Experience in 2001. 2003-20010 HEINEKEN acquires Brau Union...
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...Industry Overview: Craft Breweries & Microbreweries Craft breweries and microbreweries produce beer in limited quantities when compared to large breweries (generally under 10,000 barrels per year) and usually distribute their beer within a limited geographic region. Craft breweries often specialize in specific styles of beer, and focus on providing customers a superior product, using traditional brewing techniques. Certain craft breweries sell beer directly on their premises, and are called brewpubs. Craft breweries are known to develop clever marketing strategies with limited budgets in order to connect with their target markets. Industry Overview BC In 2009, 209 breweries were identified by Statistics Canada and 49 of those establishments were located in British Columbia. However, an article by The Province estimates that by the end of 2013 there will be more than 60 independent breweries (this number includes microbreweries, nanobreweries and brew pubs). This increase in breweries is mirrored by an increase of 6.4% of microbrewery beer sales in British Columbia in March 2007 to 12.7% in March 2011. In the last two years, this number have only grown. In an article published July 3, 2013, The Province asserts that craft beer is almost at 20% of the market share for beer in British Columbia, while BC Business cites the Craft Brewers Association of British Columbia in stating that the market share is currently around 15% but that many brewers are experiencing sales growth...
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...Company Analysis The Boston Beer Company- Britton McGlachlin As a relatively new entrant into the beer brewing industry, the United States has often been poked fun at and considered to be an inferior beer brewing country among global competitors. Up until 1984, most domestic beer options were pale lagers produced by the mass market brewers. If a person wanted to get a full and flavorful beer, it was considered that importing was the only option with beers such as Heineken and Beck’s establishing themselves as the premium beer leaders. American craft beers were virtually non-existent other than a few small basement and kitchen operations, and there were no widely distributed micro brewed, now known as craft, beers available. (History) In the early 1980s, Jim Koch, a would be sixth generation beer brewer, was convinced that he could find a niche in the competitive beer market for a high-quality American beer. In 1984, Koch used his great-great grandfather’s 150 year old recipe called “Louis Koch Lager” to brew his first batch of what eventually became Samuel Adams Boston Lager. (About) Jim began to take bottles of his beer bar-to-bar for tasting and received excellent feedback about the quality and flavor of his beer, which used all natural ingredients with no adjuncts. In 1985, Jim decided to debut in the Boston market with small batches focusing primarily on quality. Six weeks after its introduction, Samuel Adams was selected as “The Best Beer in America” in The...
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...cereal grains, to which hops and water have been added. Brewing has evolved from a cottage craft into a modern industry where large breweries export their beers worldwide. On a per capita basis, Germans consume the most beer at about 40 gallons (151 1) per person per year. Beer drinkers in the U.S. rank fourteenth in the world, with American breweries producing approximately 156,900 million barrels of beer a year. Each barrel is the equivalent of 117 liters or approximately 31 gallons. The true origin of beer can only be conjectured. Early attempts at brewing occurred around 7000 B.C. in Mesopotamia. The Egyptians and Greeks also brewed alcoholic beverages by various methods, but the term "beer" did not appear in these early languages. The Babylonians offered brewing recipes, and there are various references to beer in the Bible. The English word "beer" seems to stem from the Celtic word "beor," which referred to a malt brew made by monks at a North Gaul monastery. In the Middle Ages, monasteries were the leading producers of beer, and monks are credited with many early brewing techniques, such as the addition of hops to improve the aroma and help preserve the beer. The distinction between ales, lagers, and darker bock beers began to appear in French and Irish writings in the 13th century. It is generally accepted that the modern beers as we know them today date to the 1600s. Beer brewing was already a thriving industry in Europe when the United States declared its independence...
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...Hudepohl Brewing Company Summary Hudepohl Brewing Company was founded by Louis Hudepohl in Cincinnati, Ohio. Bob Pohl was appointed as the new general Manager in 1980 after the sudden death of the company’s president. The company experienced a disappointing stint during the late seventies as it was operating at less than 40% of its capacity and bore a loss of $538,000 in 1978. Even after the disappointing results, Pohl was optimistic about the future and predicted growth in the earnings and this was confirmed by a 7% growth in sales during first four months of 1980. Pohl majorly focused on changing the organizational structure of the company right after he was appointed as the general manager. U.S. Brewing Industry -Growing market increasingly supplied by fewer brewers. -Concentration of the industry - due to economies of scale in the production, distribution, and marketing of beer. -By 1978, top 10 American brewers accounted for 94% of beer sales. -Winners (1969 & 1979) - Anheuser-Busch, Miller, and Heileman. Industry Economics Raw materials purchasing - major brewing ingredients, were subject to wide fluctuations in price. * Production - reluctant in changing its methods of brewing, expensive installation. * Labor – Higher wages, Labor productivity improved. * Packaging - canning line speed increased 123% and labor requirements dropped 42%. * General and administrative expenses - Increase in the average plant’s scale, 1 million barrels (1969) to 2.5...
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...Company Overview 3 Executive Summary 5 Mission Statement 6 Vision Statement 6 Objectives 6 Strategies 6 Products 8 External Assessment 9 Competition 9 AB/InBev 9 SABMiller 11 Heineken 12 Craft Beer 13 External Trends 14 AB/InBev Trends 14 Water Management 15 Energy Use 16 Recycling 16 Government/Political/Legal 17 Economics 17 Internal Assessment 18 Growth Strategies 24 AB/Inbev Strategies 25 SAB Miller Strategies 26 Heineken Strategies 27 Craft Beer Strategies 28 Growth Strategy Advantages v Disadvantages 28 Space matrix 29 SWOT Analysis 30 IFE Matrix 31 Company Overview As the largest brewer in the world, Anheuser-Busch InBev (AB/InBev) has had quite an intense but creative history. In 1852, George Schneider, St. Louis brewer and saloon operator opened the Bavarian Brewery. Four years later, he expanded into a larger location for his brewery to operate due to positive production. However, shortly after the second opening financial problems resulted in Schneider having to sell his brewery to various owners. In 1860, as the brewery reached a worsening financial position, William D’Oench, a local pharmacist, and Eberhard Anheuser, a wealthy German-born soap manufacturer, purchased the brewery and saved it from bankruptcy (Anheuser-Busch...
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...Liqui-Cel® Membrane Contactors are widely used in the soft drink and brewing industries to Control dissolved gasses Gas control is an important concern in the beverage industry. Oxygen in the water can oxidize flavor components and shorten the shelf life of the product. Carbon dioxide can also have an impact on taste and pH of the product. Liqui-Cel Membrane Contactors utilize a hydrophobic polypropylene membrane to remove dissolved gasses from water. Water flows on one side of the membrane and a vacuum or strip gas is passed on the other side of the membrane. By controlling the pressures of gasses in contact with the water, a highly efficient method for gas control can be achieved. Membrane contactors are widely accepted to control gas levels in liquids used in the soft drink and brewing industries. Some of the applications that membranes have been used for in these industries are listed below. Brewing O2 removal from blending water • Oxygen can break down the final product if it is not removed from the water used in the blending process. For this reason, O2 specifications are typically less than or equal to 10-ppb. O2 removal of pushing water • In breweries, large volumes of product is left in DE filters and piping. In order to collect and use the product, the brewery will pump water through the system to “push out” the beer. • The O2 specification here is also less than or equal to 10-ppb. Low O2 concentrations are important because the product will absorb any gasses present...
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