Title: “Who Will Take Over”
View Point: The Heiress (Charlene de Carvalho)
Time Content: Current

I. Problem Statement

Who will take over of the business operations of Heineken, which is the world’s 3rd largest brewer considering that the owner and founder has only one legitimate heir who has no experience in handling such business?

II. Statement of the Objective Be able to identify who will take over the operation of Heineken within the most reasonable time and who can be effective in ensuring that the company will remain profitable and competitive in the market maintaining the legacy and brand name built by the founder of the company.

III. Areas of Consideration Strengths * Heineken is a well- established company and its product is well known to the market. It’s the world’s 3rd largest brewer. * The company has a strong business penetration in the Americas and Europe markets. * The company has Jean Francios van Boxmeer as the company’s CEO who was considered to be one of the top CEO’s of the world. He has a strong and reputable experience in improving the company’s financial statement.

Weaknesses * The death of the owner/founder of the company, Freddie had made the company’s management and its shareholders worried about the future of the company. * Charlene who is the only legitimate heiress has no experience neither an exposure to the actual operation of the company. She also does not have hands on experience in running the business in which her father has built and established. Additionally, there is no clear succession plan for the company. * Charlene’s children are still young and may not have the sufficient expertise and knowledge of how to effectively run their grandfather’s business. Opportunities * Charlene’s husband, Michel de Carvalho is a retired investment banker. His network and connections with business moguls and wealthy investors could be a great advantage. This is in addition to the fact that he is a former actor which could be presumed that he has a good charisma which could attract potential investors. * Charlene had experienced working in an Ad Agency and has studied photography, secretarial and law which could be a good opportunity for her to manage the marketing and communications department of the company. Additionally, she studied French which is the language of France of which most people loved to drink beers. * The beer industry was brimming with big ideas in which Heineken could consider this as a great opportunity to expand and grow. Threats * Company’s competitors are successfully expanding in other areas of the world while Heineken was missing some opportunities in the global market. * The company’s profit growth had slowed and stock was declining after Freddie’s death. Shareholder’s are worried that Charlene and Michel might just screwed up the business. * The company’s CEO, Mr. Boxmeer is approaching his last year of his third 4-year contract and there are no clear successors yet. IV. Assumptions It is assumed that the current CEO of the company, Mr. Boxmeer is still able and is willing to extend his contract to another 4 years. It is also assumed that the company is entirely owned and control by the Carvalho family. Furthermore, it is also assumed that all of Carvalho’s children have the potential skills and knowledge in handling business but with limited hands on exposure. V. Alternative Courses of Action

ACA1 – Michel and Charlene together with their children will take over the control of the entire business after the expiration of Mr. Boxmeer’s 4 year contract.

ACA2 – Heineken to consider renewing the contract of Mr. Boxmeer for another 4 years and allow the entire business operation to be manage by him while allowing the Carvalho’s children to start being involved in the business.

ACA3 – Sell the business to potential investors who will continue the operation.

VI. Analysis ACA1 Charlene could consider handling the Marketing department since she has the knowledge and experience in advertising operations while Michel could consider handling the corporate communications department dealing with the shareholder’s and the management of the company. Additionally, their children could start being involved in the day to day operations of the company depending on the areas of expertise they have while Mr. Boxmeer still has 1 more year remaining on his 4 year team contract. Advantage – By involving the entire Carvalho’s family in the operation, they can preserve the tradition and the legacy of the business while preserving the family’s ownership of the business which Charlene’s father had built upon. This will also strengthen the value of the business as the next generation of leaders will be coming from within. As such, Carvalho’s children will be given opportunities to develop and improve the business bringing with them the ownership and stewardship mentality as this business is a built legacy of their grandfather. Disadvantage – This course of action will surely put both Charlene and Michel together with their children in a frying fan situation where they can no longer be complacent knowing that there is so much tasks to be done. There is also a high risk of failing because neither Charlene, Michel nor their children have any experience in handling the end to end process of their business. It may also be expected that their employees may be cynical about the changes in leadership and may brought some turbulent and costly transition. One year time maybe too short for Charlene, Michel and their children to learn all the ins and outs of the Heineken business which is operating worldwide. ACA2 No doubt that Mr. Boxmeer has the tenure, experienced and has the needed skills and expertise in handling the company. He has a proven track record and notable successes in handling the business added to the fact that he is recognized worldwide as one of the top CEOs. Mr. Boxmeer can then train Michel and Charlene or any of the Carvalho’s children in the next succeeding years. Advantages – Having the right skills and expertise in handling the business could bring stability in the operation. By extending his contract, the Carvalho’s can buy time to equipped themselves with the skills and expertise in handling their business. This could also be the best time to transition leadership to their children while allowing their children to start getting involve in the operation for the next succeeding years ensuring that the company’s pride and legacy are passed on to the rightful heirs. Disadvantages – Despite the expertise of Mr. Boxmeer in handling the business for the past several years, the company still suffered some stiff challenges in the global market. It might also bring some shifting gears in the company’s core value and direction should it be lead by outsiders. Furthermore, Mr. Boxmeer may possibly ask significant pay for the extension of the contract.

ACA3 Alternative course of action 3 could be the most no brainer option. By selling the entire stake of the company, Charlene and Michel could then separate themselves from all the headaches of handing the business and then live the rest of their lives living in the fortune built by Charlene’s father. Advantages – It will be obvious to say that one major advantage is really the avoidance of all pressures and troubles in running the business. Heineken can then be manage and controlled by potential investors who are willing to risk their stake for the business and at the same time reap the reward. This may potentially put the business in a competitive advantage should it be handled by skilled leaders who will potentially buy the company. Disadvantage – This will definitely loss the control of the Carvalho’s interest in the business. As such, the legacy of the business built by their family for the past decades may not be preserved. This will also dispossess the children of Charlene and Michel the opportunity to handle and manage the business in which was Freddie’s desire to have it handed down to his family.

VII. Conclusion Criteria | ACA1 | ACA2 | ACA3 | Risk Factor | 1 | 5 | 3 | Efficiency | 4 | 5 | 4 | Timeliness | 5 | 3 | 5 | Achievability | 2 | 5 | 3 | Cost | 1 | 4 | 1 | Total | 13 | 22 | 16 |

Legend: 1 – Worst 2 – Bad 3 – Moderate 4 – Good 5 – Excellent

VIII. Plan of Actions

Activity | Responsible Person | Timeframe | Timing | Planning and setting up of goals and objectives | Carvalho family | 1 week | Immediate after the decision is made | Evaluating and Identifying potential department which each family members may manage | G5 together with Michel and Charlene | 1 week | Simultaneous during the planning phase | Discussion and planning with Mr. Boxmeer regarding contract extension | Charlene, Michel and Mr. Boxmeer | 1 day | After the strategic planning phase | Communication of the business plan to the entire organization | Heineken’s communication department | 1 month | After discussion and signing of contract extension | Hands on training for the Carvalho’s children who are willing and able to handle the business | G5 | 4 years | After the communication of the business plan | Setting up transition management from Mr. Boxmeer to whoever among the Carvalho’s children who will take the leadership of the business. | Management & Leadership team of Heineken | 6 months | During the last 6 months of Mr. Boxmeers extended contract | Handling of the business leadership from Ms. Boxmeer to Carvalho’s children who will lead the business. | Mr. Boxmeer and the Identified children of Charlene &Michel who will take over the leadership | 1 month | One month prior to the expiration of Mr. Boxmeer’s contract | Feedback, Evaluation and Post transition planning | New CEO (any one from the Carvalho’s children) | 2 months | After the transition |