Case Study: Heineken

1. What strategy does Heineken follow in the beer market? The strategy that Heineken follows is that of differentiation with a product lifestyle focus. This strategy gains market share and competitive advantage by distinguishing their products through excellent design. A U.S. wholesaler recently asked a group of marketing students to identify a group of beer bottles that had been stripped of their labels. The stubby green Heineken bottle was the only one among the group that incited instant recognition. This strategy also focuses on high awareness, easy accessibility, and new products. Heineken spent $50 million dollars on the launch of Premium Light, the first time that brewer had created an extension of its flagship launch. This new product was able to attract customers without cannibalizing sales from the original brew. The decision to launch a new product came in part as a series of changes to raise its stature in the U.S. market and to respond to changes that are occurring in the growing global market. Awareness of the brand as need since there has been an overall decline in the market due to tougher drunk-driving laws and a growing appreciation for wine.
2. What is the structure of the global beer industry? What recent changes have impacted the structure? The name of the game now in the global beer industry is consolidation. This has caused the industry to undergo significant changes during the past several years. Most of the bigger brewers have begun to acquire or merge with their competitors in foreign markets in order to become global players. Over the past 6 years, South African Breweries acquired U.S. based Miller Brewing to become one of the worlds largest global brewers. In 2004 Belgium’s Interbrew combined with Brazil’s AmBev to eventually become the largest global brewer with operations across most continents. During this time