What strategy does Heineken follow in the global beer market?
One of the strategies employed by Heineken is the development of a consistent framework for the global market. Heineken is a leading Beer brand that strived to be consistent in its endeavors and business activities. Consistency in this case denotes maintaining the quality of the same products that it has had in the global market. Heineken realized that controlling global markets by developing global strategies were critical to the overall success of the company. The consistency of the brand of beer that is produced by the entity is a good strategy that ensures loyalty is maintained in the organization. The beer industry is one that experiences a lot of challenges. Customers identify with brands that have always taken a particular approach in terms of the quality of what it produces. The consistency can be seen in the manner in which the brand is represented in the international platform. It develops the brand in a particular manner with which customers can identify with the product, most notably in terms of taste and quality. The Heineken brand, therefore, forms an identity in its brand (Schulenkorf, 2008). Additionally, Heineken operates on a strategy that assures it of the integration with the other business within and outside of the company. Enterprises in all spheres affect and determine how a company has success. By integrating the businesses around it with the overall objective of the company, it is better placed to find success in the international market. Blending involves the coordination of the companies that are involved with the enterprise. All of them ought to possess the same agenda that is to steer the company in the right direction (Denison & Ren, 2001).
One of the strategies that Heineken is geared towards developing is that of ensuring that its brands are well suited to the global market. The approach involves tapping into the market through the integration of all the brands and successful launch of products that excite customers. It was noted that Heineken has brands that are well suited for the local market. Apparently, the local market is satisfied with everything that can be accrued to the traditional beer that the company produces because of a preference in the taste. The scenario is not the same as the global market. The market is fuelled with a lot of dynamism and diverse views on tests that are preferred. It is a broad market that is constituted of different types of beer takers, all of whom have a variety of tastes. Therefore, it was realized that indeed, a change was vital to the continued survival of Heineken in the global market, and its overall success story. As a result, the strategy in question involves incorporating different brands into the company that have the preferences of the different consumers in the global market. Consumer needs in the world have been noted to moving toward a unified system regarding issues of choice and expectations. Such a statistic means that the preference of the customers is likely to be the same. Still, there are unique factors in every part of the globe that make them have different needs. Heineken has a strategy that could tap into the different uniqueness of these areas of the world. Tapping into such distinction necessarily involves a thorough evaluation of the other brands that are inexistent in the company. The process then facilitates making the brands unique and suitable for the preferences of different consumers (Schulenkorf, 2008).
What is the structure of the global beer industry?
The structure of the beer industry consists of many aspects. The factors shape the outlook of the beer industry and determine the success of the company. The structure includes high rivalry among the many firms that are available in the industry. The competition is caused by the rising entrance of new firms into the market. Some of these new entrances are independent entities, while some are substitutes for the big beer brands. The point is that they cause rivalry and competition that is strict by all measurable standards (Denison & Ren, 2001). The notion can be evidenced by the fact that a number the big businesses in the beer sector have only taken a third of the market. The other share is consumed by the new entrances into the beer industry. Buyers form part of the beer industry. They shape the course for which these companies embark because they determine how the brands will taste, among other factors. The buyers determine the rate at which the suppliers will flock the market because they showcase the demand for the beer. The imaging of the brand is paramount in determining how or what the buyers will prefer (Denison & Ren, 2001). They, therefore, form the foundation of the structure of the beer industry. The beer industry structure is a radical one because it keeps changing all the time. The companies constantly have to adapt to such changes, and Heineken has been presented with a sea of challenges on a regular basis.
What changes has Heineken made that will help it deal with its challenges
Heineken was initially controlled in the traditional way. That implies that it was managed through the family lineage. That, was undoubtedly, a culture that had to be opted off since the new management was the initial strategy that would facilitate the required transformations that the company needed to remain competitive in the modern times.
That Heineken is of late facing aggressive competition is without a shadow of doubt. That would be attributed to various factors that might include but not limited to the presence of larger companies, as well as several smaller ones pulling together through acquisition. That, as a result, places the Heineken's percentage of market share at a tough place market-wise necessitating various new strategies that would enable the company maintain as well as control the market share (Schulenkorf, 2008).
There are different strategies that are on record to have been initiated by the company towards that effect. For instance, Heineken is on record to have launched a policy that they termed FIT2FIGHT strategy. Under the approach, the company was aiming at understanding and accepting that they were required to have an influence over the smaller enterprises in the industry. By so doing, they would be in a position to have greater influence on the decisions that would be made, and without a doubt, no strategy would see the light of day in case it would compromise the market share of the company itself. Equally, Heineken initiated the need for merger and acquisition a comparable strategy that its competitors were opting for as mentioned exceeding. They did so to the local as well as international brands enabling them to gain a high market niche. Noteworthy also was the strategy of cost cutting. It was a strategy that entailed the enactment of various schemes that would ensure that their cost of productions, as well as management, are reduced considerably. As a result, better outcomes would be anticipated since reducing such costs bear greater outcome in the long run.
Supplementary strategy adopted by Heineken enabling it to deal with its encounters is the international policy. Under the strategy, the company opted to undertake initiatives that would ensure that the company's products are more preferable within the market. That was something that would be attained through the introduction of sound goods and brands. To attain that, they had to standardize their products, not overlooking the fact that they took their client's need into consideration. Factual is the point that customers prefer cheaper products and Heineken as a company had no option other than to have measures that would enable the present more inferior products to ensure it remains competitive (Denison & Ren, 2001). Closely related to the exceeding strategy was the consideration of the younger generation. Heineken, being one of the oldest product in the market had to ensure that it becomes appealing to the younger generation since they made up the larger proportion of the market. Otherwise, their older generations were loyal to the product, and the younger generation was target especially through advertisements.
References
Denison, E., & Ren, G. Y. (2001). Packaging prototypes 3: Thinking green. Crans-Près-Céligny: RotoVision.
Root, F. R., & Root, F. R. (1987). Entry strategies for international markets. Lexington, Mass: Lexington Books.
Schulenkorf, N. (2008). Positioning of Heineken via sport sponsoring in the German beer market. München: GRIN Verlag GmbH.
