This website uses cookies to ensure you have the best experience. Learn more

Strategy Carlsberg Vs. Heineken Essay

2363 words - 10 pages

STRATEGY TD FALL 2012
JOÃO SILVEIRA LOBO | GUIDO MARETTO

VS
| Carlsberg vs. Heineken |

TABLE OF CONTENTS

Industry Overview1
Competitive Advantage and its Sustainability1
Cost Advantage1
Differentiation Advantage2
Sustainability3
Future Scenarios for the next ten years4
Strategic Options facing each Scenario5

Industry overview
For thousands of years, beer has been sold in similar form and taste all over the world. However, it has remained a highly local product due to barriers such as local tastes, short shelf life, high transportation costs, taxes on imported alcoholic products and difficult-to-penetrate local distribution networks.
In 1999, the top-four brewers ...view middle of the document...

This way, Carlsberg and Heineken were able to develop the mentioned advantages, however, with a relative different weight. Carlsberg has a relative source of competitive advantage in scale in the value chain, whereas Heineken’s source is brand strength.
Cost Advantage
The companies under analysis reached a dimension which enables them to enjoy various internal economies of scale. The gains from these scale economies allow the companies to sustain its profitability. Carlsberg and Heineken are operating in the premium segment which means that the benefits of its large scale are directed to an increase in margins rather than to a price reduction. The companies produce more than one type of beer but the production technology and processes required are mainly the same which means that the same machinery and infrastructure can be used for different production processes, increasing capacity and lowering cycle times. Moreover, due to the companies’ size, they have been able to develop strong relationships with distribution channels and sponsors, strengthening their position within the industry and allowing them to reduce costs.
The internationalization strategy pursued by both companies – Mergers & Acquisition – allows them to penetrate in new markets and thus, have access to local distribution networks. Therefore, obtaining distribution line efficiencies, erasing exports barriers and enabling a wider market reach.
Recently, there has been a new trend of centralization in major breweries, partially led by Carlsberg. In 2011, the company developed the Business Standardization Program moving towards centralization of its supply chain management. This program was traduced into shared accounting service center in Poland, centralized procurement in Switzerland and harmonized IT systems across the Group. As the pioneer of this trend, this initiative made possible to reduce costs and improve brand marketing and innovation and, simultaneously, allow Carlsberg to benefit from the advantages of scale and standardization of functions and processes.
At the same time, and as a proof of rising in the “globalization curve”, Heineken implemented the Global Business Services Program focused on Heineken Global Procurement and Global Shared Services, intended to share service centers and harmonize IT systems. These programs allowed Heineken to manage input price volatility, leverage the company’s scale, improve supply chain financing and extract more quality and value of each operation. Overall, it has improved cost efficiencies through economies of scale, standardization and concentration of processes in optimal locations. Moreover, Heineken has achieved a higher level of control through standard and consistent ways of working. IT had a crucial role as an enabler of these programs by creating synergies and scalability for growth.
* Carlsberg’s operating cost productivity relative advantage
Carlsberg has a higher operating cost productivity, meaning that...

Other Papers Like Strategy - Carlsberg vs. Heineken

Experience Marketing Essay

2929 words - 12 pages experiential marketing in their marketing strategy. For example: Adidas, Heineken, Carlsberg, Coca-Cola and many more. Big brands are using experiential marketing to let people talk about them. With the substantial increasing group of social media users it is a cheap way to create more awareness amongst their target group and the friends of their target group. People trust their friends more than just a brand. 7 The costs of experiential

Foreign Market Entry and Diversification Essay

1177 words - 5 pages of beer consumption in developed markets is due to high unemployment rates, high fuel prices, and reduced consumer spending. Industry consolidation has continued and the four largest brewers-Anheuser-Busch InBev, SABMiller, Heineken, and Carlsberg- produce almost half of all industry volume and generate up to 70 percent of industry profits. The beer consumption in countries like Africa, Asia, and South American continue to rise. This is primarily

Foreign Market Diversification

1507 words - 7 pages industry: * The acquisition of Scottish & New-Castle by Carlsberg and Heineken. * The acquisition of Anheuser-Busch by InBev (Trends in the Global Beer Markets, 2008) Discuss how Modelo’s international expansion was made possible through strategic partnerships with experienced distributors in local markets Corona became the number one imported beer in America because of Modelo’s agreement with its distributors. Modelo entered into

Merchandise Management

1488 words - 6 pages – reflect the variety and assortment that the retailer plans to offer in a merchandise category (breadth and depth) – in the beverage category: soft drink (Coca Cola, Pepsi), beer (San Miguel, Carlsberg), tea (Nestle, HI-C) with each has 3 different tastes & sizes – 54 SKUs in the assortment plan (6 brands x 3 tastes x 3 sizes) – retail strategy and brand image (the right amount of choices; less is more) – Inventory investment (stocking

Global World

5189 words - 21 pages significant consolidation, and this trend continued during 2008. On a pro forma basis, beer sales by the top 10 players now total approximately 65% of total global sales, compared to less than 40% at the start of the century. In recent major developments, the division of Scottish and Newcastle’s business between Carlsberg and Heineken was completed during the first half of 2008, while InBev acquired Anheuser-Busch in November 2008. SABMiller and Molson

Mr . Mba Candidate

4266 words - 18 pages present day. In fact, much of the appeal of Samuel Adams comes from its microbrew image and the founder, Jim Koch’s, commitment to the brewing process and a premium beer. In recent years, however, the company has implemented a new strategy for growth which has included introducing a light beer that will have more mainstream appeal. While this has increased profits for the company, it has also left the company vulnerable to entry by diluting its

Freedom And Responsibility

2141 words - 9 pages Built within the Constitution of the United States are specifically defined freedoms that are guaranteed to all citizens. Conversely, with every constitutional freedom there comes a corresponding responsibility. On September 25, 1789, the state legislature’s twelve proposed amendments were transmitted by congress, the first two dealing with congressional representation and congressional pay. The following numbers three through twelve were

Hate Crime Laws

2348 words - 10 pages On June 7, 1998, 49-year-old James Byrd Jr. of Texas accepted a ride from three white men, who then beat him severely, urinated on him, chained him by his ankles to the back of their pick-up truck, dragged him for three miles into the countryside, and dumped his corpse in front of an African-American cemetery (Graczyk). A little over a year later, a jury sentenced ring leader John King to death by lethal injection (“Man Executed for Dragging

Rational Emotional Behavior Therapy Case Study Conceptualization And Treatment Plan

2140 words - 9 pages Rational Emotional Behavior Therapy Case Study of Sarah: A Conceptualization and Treatment Plan Rational emotive behavior therapy, REBT, was developed by Albert Ellis and holds the central belief that the events in our lives do not cause our disturbances but that they are instead caused by our view of the events (Murdock, 2009). Murdock (2009) states that “people are seen as responsible for their behavior” (p. 279) but, because they are

Holidays In Albania

1636 words - 7 pages Have you ever thought about having exciting and incredibly cheap vacations? Albania might be the right choice. According to My Travel Guide, Albania is ranked the fourth among ten places worth visiting in Eastern Europe (“Top 10 Eastern European Destinations”). One can encounter three kinds of vacations in this Mediterranean country: winter, summer, and cultural. The ideal places to spend your winter vacations are the Albanian Alps. They are

A Heart Of Darkness

1748 words - 7 pages emphasizing the two images of Kurtz: a barbarous and savage man of an uncivilized society vs. refined gentlemen from civilized Europe. The manager of the ivory company in Africa is essentially the scoundrel of the plot. He is the dark force indirectly responsible for the corruption and decadence in the Congo. Setting is also relevant to the overall theme of the novel. As the plot opens up, Marlow begins to compare the Thames River to the Congo. He

Related Essays

International Marketing Between Carlsberg And Heineken In Malaysia

2379 words - 10 pages global, regional and national beer brands appeals to a broad diversity of tastes, personalities and lifestyles and ensures growth in all segments of the beer market. The portfolio is constantly strengthened through a clear branding strategy; with the Carlsberg brand as the leading international premium beer, supported by regional brands such as Tuborg and national brands like Tetley's, Baltika and Ringnes. 1. Heineken Introduction 1. History

Strategic Management Of Heiniken Essay

2858 words - 12 pages reason that everyone is doing them. Strategy is all about being different from everyone else. Sustainable competitive advantage is possible only through performing different activities from rivals or performing similar activities indifferent ways. This report is based on the Heineken, which is world’s top brewer with excellent growth platforms. Specifically, by revenue, Heineken has established itself in second position worldwide. This famous

Heineken N.V Global Branding & Awareness

532 words - 3 pages HEINEKEN N.V- Global Branding & AwarenessProblem Statement: As the consumer needs & tastes vary across the globe, Heineken must decide how much to adept their marketing strategy to local needs using a variance of standardized marketing mix & adapted marketing mix, owing to the strong brand preferences & loyalties that exist among the beer drinkers.Recommendations: Heineken needs to evaluate its home replication, multi-domestic

Lkijgftthgdhlok Essay

748 words - 3 pages , Chanel) magazines (e.g. New Woman, Cleo, Cosmopolitan); hairdressing (e.g. Pantene,Clairol); and Clothes (e.g. New Look, Sussan, Zara).  Products targeted at men ▪ magazines (e.g. Ralph, Nuts); ▪ grooming products (e.g. hair gel and styling mousse, Gillete); and ▪ beverages (e.g. beers like Heineken, Carlsberg)  Combination of age and gender; ▪ Dove’s new Dove ProAge product range aimed at women in their fifties  People at