Premium Essay

Western European Brewing Industry

In: Business and Management

Submitted By mirfath92
Words 6918
Pages 28
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


industry increasingly markets alliances in the

how the within global

consolidation within

acquisitions, This has resulted

the industry. reliance

of the brewers'



- :~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


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 r , 2010]. T a b l e 1 d e t a i l s t h e o v e r a l l d e c l i n e of E u r o p e a n b e e r : : - s u m p t i o n . D e c l i n e in t r a d i t i o n a l key m a r k e t s is due to s^.eral factors. Governments are campaigning strongly ; n s t d r u n k e n d r i v i n g , a f f e c t i n g t h e p r o p e n s i t y to d r i n k b e e r in r e s t a u r a n t s , p u b s a n d b a r s .…...

Similar Documents

Premium Essay

Global Forces and the Western European Brewing Industry 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 (e.g. at home). This has resulted in the increase of supermarket sales, along with the added......

Words: 1246 - Pages: 5

Premium Essay

Global Forces and the Western Euoropean Brewing Industry

...ASSIGNMENT 1; 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......

Words: 1160 - Pages: 5

Premium Essay

The Us Brewing Industry Case Study

...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......

Words: 326 - Pages: 2

Premium Essay

Analyze Case Study “Global Forces and the European Brewing Industry”

...firm strategy has to be immediately fixed and improved to move in conjunction with the needs of the external environment (Stead et al., 2004). Understanding the importance of strategic management, the report’s purpose is to exploit supplied information from the case study “Global forces and the European brewing industry” to carry out the external environment analysis which uses PESTEL and Five Forces Models. Basing on the achievements from the industry analysis, a further analysis called strategic groups which based from strengths and weaknesses of four brewing firms is made to categorize each kind of firms. References from books, journal articles were used to providing proper prove for supporting the trend in the case. INTRODUCTION The case study reflects how international forces have influence on European brewing industry as well as how such breweries firms has tried to overcome the difficulties. Despite of the fact that the European governments have enforced some restrictions and carried out a campaign against alcohol, these firms still tried their best in order to increase growth rate via alliances, acquisitions and closures within the brewing market. Firms are focusing on broadening their appearances in other marketplaces while several of firms are mustering on innovating and branding their products. Furthermore, they also pay much attention to cut down cots, including packaging cost which will contribute to decrease the......

Words: 2220 - Pages: 9

Premium Essay

Eu Brewing Industry

... | Volume Share % | | | | | | | | | | | | |Pan European Own Label Suppliers |Pan European Branders |Multinational Major Branders | | | | | | | | | | | | ...

Words: 723 - Pages: 3

Premium Essay

Uk Brewing Industry

...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......

Words: 498 - Pages: 2

Premium Essay

Assess the View That Secularisation Has Only Been a Part of Western European Societies

...Assess the view that secularisation has been a feature only in modern European societies-33 marks The idea of secularisation implies that there has been disenchantment in social life, that sacred ideas are no longer of any relevance to people and practical matters are emptied of any spiritual significance. Secularisation according to Wilson is the process whereby ‘religious thinking, practice and institutions social significance,’ that people are more interested in leisurely pursuits and that society and religion has become more pluralistic as a result of globalisation. Exclusivists think that secularisation is definitely happening whilst inclusivists argue that it is not happening, rather that society is experiencing resacralisation, that there are other religions such as NRMS and New Age Spirituality which are equally valid. Woodhead and Heelas suggest that there are two versions of secularisation. Firstly the disappearance thesis states that modernity is bringing about the death of religion. This thesis tends to use Church statistics as evidence. Crockett found that in 1851 40% Church attendance and in 2007 2% attended. In 2002 2/3 attended a religious service such as weddings no more than once a year. However there are problems concerning the use of Church statistics, regarding their reliability and validity. Statistics tell us very little about the social meaning of religion as Davie suggests many people can believe without belonging. Bellah also notes that religion......

Words: 2142 - Pages: 9

Premium Essay

Brewing Industry

...Introduction to USA Brewing Industry: * The Economic impact of brewers, distributors, retailers, our supply-chain partners and induced industries totalled more than $246.5 billion dollars in 2012.  * The industry today includes more than 2800 brewers and importer establishments and over 3,700 beer distributor facilities across the country * The Brewing industry employs more than 2 million Americans, providing nearly $79 billion in wages and benefits. * The industry pays over $49 billion in business, personal and consumption taxes. * Each year U.S. brewers, importers and distributors pay over $3.6 billion in federal excise taxes and almost $1.7 billion in state excise taxes. * Brewing industry has over 129,500 people work for distributors and more than 900,000 work for retail outlets that sell beer * The American brewing industry has now crossed more than 3,000 breweries which is a biggest milestone in the history of brewing industry 1. Threat from potential new entrants * Every business do have the entry barriers but in Brewing Industry there are some unique challenges like creative thinking and sustaining in the competitive market * Creating the market space and brand in the brewing industry for the new entrants is very difficult as there are many such existing companies. * Brewers should follow the government regulations and other state legislative rules like the three tier rule of production and sales. * At the federal......

Words: 1380 - Pages: 6

Premium Essay

Global Forces and Western European Brewing Industry Five Forces

...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,......

Words: 803 - Pages: 4

Premium Essay

Sun Brewing

...rP os t 9-207-039 REV: JUNE 28, 2010 BELÉN VILLALONGA RAPHAEL AMIT SUN Brewing (B) op yo In late July 2004, Nand Khemka and his sons Shiv and Uday assembled in Paris to discuss their holdings in SUN Interbrew Limited (SIL), a leading Russian beer producer. SIL was a joint venture formed in April 1999 between their beer company SUN Brewing and Belgian beer giant Interbrew.1 SUN Brewing was part of SUN Group (SUN), an international commercial and investment group owned by the Khemka family. SUN’s shareholders were firm believers in the long-term growth potential of the Russian beer market and in the value creation potential of SIL. The family was extremely pleased with the recent success of the management team led by Joe Strella and felt they shared a common vision with the shareholders and management of Interbrew. However, the last few months had led SUN to consider carefully the situation in which they found themselves. First, the Alfa Group, a large financial and industrial conglomerate in Russia, had accumulated 15.8% of the voting stock in SIL, thereby becoming the third largest voting shareholder in the company.2 Alfa had approached both Interbrew and SUN separately and had expressed their desire to buy out SUN’s interest and to become a partner with Interbrew in the future growth of the business. SUN had also been approached by Interbrew about buying SUN’s stake. tC Although the family was keen to remain a long-term shareholder in the business, the......

Words: 7406 - Pages: 30

Premium Essay

Analysis of European Airline Industry

... Management and Strategy (MBA INTERNATIONAL) Module Reader: Claire Devlin Student Name: Varghese Jacob Student Number: 8202730 Date: 16/03/2007 Introduction Air line Industry can be called as one of the biggest industry in the world. In that huge industry European Airline industries part is very high. European Airline industry consists of two sectors mainly Main stream and Budget Airlines. The budget airline sector is becoming a great threat to the main stream airlines in these days. Among the Budget Sector Airlines Ryanair is the most established one. Here the essay is mainly dealing with the reviewing of the management strategy of the budget airline giant RYANAIR. Essay includes not only the management strategies but also the main problems that Ryanair have to face in their entire business period. And also includes the analyses of European Airline Industry in relation to Ryanair. ANALYSIS OF EUROPEAN AIRLINE INDUSTRY European Airline industry can be called as the world’s biggest airline industry. Europe’s main stream airlines industry includes British airways, Lufthansa, Scandinavian Airlines and BMI. Before the establishment of the budget airlines they were the kings of European airline industry. The Budget Airline or the Low frae airline includes Easyjet, Virgin Express, Aer Lingus, bimbay My TravelLite and last but not the least Ryanair. Among these budget airlines and the main stream airline there......

Words: 3709 - Pages: 15

Free Essay

The Western Brewing Industry

...feeling largely contributes to the working atmosphere amongst personnel. In order to be a professionally operating organisation, the Family feeling should not be too present as it can slow down change and progress. A group of employees that is extremely cohesive can be very difficult to handle. Hierarchy is absolutely necessary as the 3D IS Benelux department is large and complex. The various functions often have overlap with one another. Processes, procedures and line-management increase the clarity about responsibilities, which can also be shared between functions. 6.4.2 From examples from Cameron & Quinn In Cameron and Quinns’ Diagnosing and Changing Organisational Culture many examples are presented for various organisations and industry groups. The organisations that are closest to the 3D IS Benelux department are the “Multinational Manufacturer” and the branch of “Retail and Wholesale Trade”. The first because of the multinational aspect, the second because of the customer focus. A balance between - the above visual representations of two organisations and - the earlier written analysis of the questionnaires reviewed, result in a proposal for a required Organisational Culture for 3D IS Benelux. This proposal matched with the ideas the workgroup had after reviewing the received questionnaires and has been well received by the IS Management Team. ...

Words: 1144 - Pages: 5

Premium Essay

European Airline Industry

...The European Airline industry has gone through a lot in the past century since the establishment of the first public airline after the World War I. Until a few decades ago most of these airlines were national and at least partially state owned, and most of the European countries had at least one, with direct government control. Significant change in this only came in the 1990’s with the appearance of the low cost airlines. While the business model existed for some time (first such in 1973 US), the appearance of these in the European market needed the liberalization brought forth by the EU, implementing the „Freedoms of the air” in three stages. In 1997 the first LCC (Low Cost Carrier), the Ryanair began its operation, and in a few years a few more followed, which gave the national and network airlines a new problem to the existing economic problem, shrinking market and others such as 9/11. By today the changes in the past two decades have shifted and diversified the industry, which was once a mature and to some level declining in structure. The new regulations, companies, investors and consumers have brought new life, the industry once again mature with fragmented characteristics. The ideal tool for the assessment of the airlines industry is Michael Porter’s five force model. It aims to find and demonstrate the forces in the microenvironment which influence the industry, internal and external as well. Threat of new entrants (barriers to entry) • High capital investment......

Words: 931 - Pages: 4

Premium Essay

  Ryanair and Its Activities Within the “European Airline Industry”

...To what extent has Ryanair met the critical success factors for the sector in the last five years? 1. Loyalty: The most important factor for being successful in service industry is loyalty. Quality of service, communication with the current and potential clients as well as promos and discounts can help airline companies to attract more travelers. As Ryanair is a low-cost airline, they do not invest in any particular loyalty program, like majority of full-cost airlines do. The attitude for the low-cost airlines could be described as ‘you get what you paid for’. Looking for other big companies, it is essential, that a properly working loyalty program needs big investments and proper, continuous management that would essentially increase costs of operation for Ryanair. Despite this fact, during the research it was investigated, as Ryanair is one of the leading European low-cost airlines, it already has a base of loyal customers, mostly because of simplicity (a lot of destinations offered, cheap prices, and relatively new aircrafts). 2. Access: Airports are usually out of the cities. Passengers are spending a lot of time in traffic jams on the way to and from the airport. In addition, passengers are spending a lot of time in the airport, as usually they must check-in in advance. Reducing advance time and developing transportation can reduce the overall time of the trip. Access factor for Ryanair a is topic for discussion, as majority of airports they operate in are very far......

Words: 1628 - Pages: 7

Premium Essay

A Study of the European Cosmetics Industry

...Executive Summary - November 2007 A Study of the European Cosmetics Industry Executive Summary Prepared for: European Commission, Directorate General for Enterprise and Industry Prepared by: Global Insight, Inc. November 2007 Executive Summary - November 2007 Contact Information Emilio Rossi Managing Director Business Planning Solutions, Europe Global Insight, (Italy) srl. Via S. Maria Segreta 6 20123 Milan +3902 8648 130 Antonia Prlic Principal 1 Adelaide Street East Suite 2505, P.O. Box 198 Toronto, Ontario, M5C 2V9 Canada +1 416 682-7312 Robert Hoffman Senior Consultant 1 Adelaide Street East Suite 2505, P.O. Box 198 Toronto, Ontario, M5C 2V9 Canada +1 416 682-7311 Executive Summary - November 2007 I. Broad Market Study An overview of the broad cosmetics industry (also referred to as the cosmetics and toiletries (C&T) industry) in the EU, Japan, China, and the U.S. reveals that Europe's market size is almost as large as the U.S. and Japan combined, due to its large population. In 2006, the U.S. cosmetics market was €38.2 billion, while Japan's was €23.7 billion and China's €8.2 billion. The total EU27 cosmetics market was valued at €63.5 billion in 2006. Among the EU countries, Germany has the largest cosmetics market, valued at €11.7 billion, followed by France (€10.4 billion), the U.K. (€10 billion), Italy......

Words: 7332 - Pages: 30