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Heineken company: Value Based Management

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  1. Introduction
  2. Environmental analysis
    1. Macro Environmental Analysis PEST
    2. Micro Environmental Analysis
  3. Organizational analysis
    1. Heineken Resources
    2. Scale, Experience and Scope Economies
    3. Strategic Fit
    4. New SWOT Analysis
  4. Strategy formulation
    1. Vision and Mission
    2. Values and Objectives
    3. Corporate and Business Strategy
    4. Corporate Governance
    5. Products?Markets
    6. Vertical Integration
    7. Internationalization
    8. Diversification
    9. Organizational Development
  5. Conclusion

The Heineken family entered the beer business in 18641, when Sir Gerard Adriaan Heineken bought a brewery in the heart of Amsterdam. Over the past 140 years, three generations of the Heineken family have built and expanded the brand and the company worldwide. In recent figures, the company has pursued a leader position in Europe and taken the third place in the world, behind ABInBev and SABMiller. Thus, the present report extensively analyzes the strategies and processes in which Heineken's major success relies. Firstly, it is important to analyze the Macro environmental factors that influence the brewing industry as a whole and the Micro environment which directly affects Heineken's performance. Moreover, by analyzing the environment that surrounds the company, it is possible to identify opportunities to be seized and threats that must be minimized. Thus, threats have been increasing; besides fierce competition, stricter laws and popularity of non?alcoholic drinks make it harder to succeed in the beer market. Nevertheless, there is also a promising flush of opportunities such as the green and health trends, and the exploration of emerging markets. The present report also focuses on an intensive Heineken's organizational analysis and strategy formulation. The goal is to gain a deeper understanding of the strengths and weaknesses of the company as well as the strategies and activities that lead to its great triumph in the international beer industry. Heineken's ultimate goal is to build a stronger, more competitive global business and provide superior value to the customers. And it has been able to do so by ?harnessing our core strengths: the commitment and excellence of our people, the strength of our brands and our ambition to build profitable future growth" (Jean Francois von Boxmeer, Heineken CEO).

[...] Heineken is committed to sustainable development and as such, to optimizing our financial results with minimal impact to our business environment . To do this, we abide by a number of governing business principles and three core values respect, enjoyment and passion for quality that reflect our passion for beer and our respect for our employees, business partners, customers, shareholders and all others who are connected to our company.?(Heineken, N.V. 2009) 4 .2) Values and Objectives . Organizational Values As stated above, Heineken embraces three core values and executes a set of strict business principles, namely: Respect: Heineken respects individuals, society and the environment. [...]

[...] Based on this analysis investment decisions can be made, taking into account the attractiveness . The Mainstream and Economy segments have reached the Maturity stage, representing the largest ones . Regarding the Mainstream segment, it is also the most profitable. These can be considered as ?concentrated industry?, as in these Figure 9 Industry Life Cycle segments, the beer industry is dominated by a small number of powerful players who hold a high market share and therefore can influence the industry. [...]

[...] Hence, the company bets on continuously differentiating its products and effectively building a strong product differentiation plan Heineken takes into consideration if the product differentiation is one that is desired by the customers . Product Differentiation Figure 24 Competitive Advantage Model Heineken's Product Differentiation relies on two main strategies: Broad differentiation through multiple strong local brands to open distribution channels; Focused differentiation of the Heineken brand to drive sales growth. More focus is put on the Heineken brand than any other as this strategy is closely tied to the strong brand equity, recognized as the main growth driver . [...]

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