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    Case - Refreshing Heineken

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    Case - Refreshing Heineken

    Uploaded by

    Tú Cẩm
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    12. Case - Refreshing Heineken

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    76 views2 pages

    Case - Refreshing Heineken

    Uploaded by

    Tú Cẩm

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    © All Rights Reserved
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    of 2

    ‘Refreshing’ Heineken

    Dutch brewing giant Heineken, the world’s third-largest brewer, faced many challenges in
    2018. The world beer market was slowing down with the rise of alternative beverages,
    tighter regulations and global economic slowdown. Craft beers were also on the rise.
    Nevertheless developing countries still offered significant growth opportunities – areas in
    which Heineken was already strong. Heineken was also threatened by AB InBev’s takeover
    of SABMiller that created the world’s largest brewer (three times Heineken’s size and with
    much higher margins). Heineken’s controlling family was fiercely protective of the
    company’s heritage and believed growth and value could continue for shareholders.
    Nevertheless, how could Heineken ‘refresh’ its strategy?
    Heineken could grow organically, increasing marketing at premier sports events to
    complement its promotion of world-class tennis at the US Open and Wimbledon. A second
    option might be to expand its cider and Weiss beer production and distribute globally to
    address new consumer tastes. Neither option though might be sufficient to compete against
    a new industry giant.
    Option three could be to merge with family-owned Carlsberg, the fourth largest brewer in
    the world. A merger would result in 40 per cent of the European market, significantly
    strengthen their combined Asian presence and build on their joint venture, and achieve
    sourcing and operations synergies. Although Carlsberg might not be so expensive due to
    recent poor performance a merger might not address the rise in beer alternatives and be
    acceptable to the Carlsberg family.
    Option four, to merge with Diageo, would give access to a wide range of liquors, spirits
    and whisky to complement Heineken’s beers and provide opportunities in the new mixed
    drinks sector. However, there could be ownership concerns as Diageo was twice
    Heineken’s size. This would be less of a problem with a fifth option, merging with US
    company Moulson Coors, that would play to Heineken’s strengths in brewing and greatly
    strengthen its US presence with synergies in supply, logistics and distribution. But this
    would not address the market slowdown or the rise of craft brewers.
    Option six therefore might be to invest in craft brewers. Heineken could supply capital and
    distribution as well as brewing know-how. It would keep Heineken close to consumer
    trends and possibly provide new products. However, this might take time and also being
    associated with Heineken might make a craft brewer immediately lose their status. It might
    also set back Heineken’s industry-leading efforts in corporate sustainability.
    The table below relates each strategic option to key strategic factors from a SWOT analysis.
    A tick indicates addressing a strategic option (favourable), otherwise an ‘X’ means
    unfavourable, or a ‘?’, uncertain. The final column sums the ticks and subtracts the ‘X’s to
    indicate a net level of option suitability that can be then ranked. Options can be further
    debated against the SWOT analysis and then attention can focus upon the most favoured
    ones in terms of acceptability and feasibility.

    Discussion:
    1. Are there other strategic options or factors Heineken should consider?
    2. How could you improve the ranking analysis?
    3. Consider the most favoured option in terms of acceptability and feasibility criteria.

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