04.10.11 Saad Salahuddin Managing Strategy Assignment

04.10.
11 SAAD SALAHUDDIN Managing Strategy Assignment
To: Brewery Company From: Saad Salahuddin
Date: 04.10.11
ANS to Q1) (i): PESTEL Political:

From the case study we could notice that political intervention of the government had made strict actions against drunken driving and alcohol abuse. This initiative taken by the government was one of the reasons that transformed the buying behaviour of European Market. This would be classified under the head of social analysis; also the government intervention has caused the change in buying behaviour. There is an overall decline of consumption of beer in Europe as many traditional key markets have been made increasingly aware of the social problems associated with alcohol consumption. Factors that caused the decline in beer consumption is the active campaign of European governments which was against binge-drinking and subsequently the long term health fitness problems.
Economic:
There is a rise of economies of drinking, for example Asian countries like China which has got more than 50% of China`s beer exports. So, lot of countries import drinks from China as they are the country who were really doing well in recession as their prices didn`t effect from selling their products during recession and they were able to sell their drinks at the same price. Brewing companies are engaged in various marketing strategy to grow their market through gaining, blends and introducing finest quality products.
Social:
There are many problems associated with consuming alcohols, such as long term effects, which include: permanent damage to vital organs, several different types of cancer, sexual dysfunctions, and high blood pressure. These facts need to be accepted by brewers and not to be forgotten, especially when advertising, as advertising a drug has to be done in a proper and right way. On the other hand there also has been a rise of beer consumption in Southern Europe, which means majority of the boys and girls of that continent consumes a lot of beer and other alcoholic drinks. Due to high blood pressure which most older people are having now, they are trying to become health conscious, so they are either trying to avoid or are trying to drink less alcoholic drinks that is why Brewery Company will lose customers because of the side effects which is causing by consuming the alcohol that is of the long term use.
Technological:
The brewing industry has got very little technological factors that are involved very often. The brewing process will occasionally get more efficient machinery to do the job it is supposed to be doing, but this does not change very frequently. Research & Development is important in the brewing industry due to the changes in consumer tastes. People demand alcohol in different flavours, with low calories, with low alcohol, seasonal beer and so on. Via technology more drinks can be produced even though the raw materials remain the same, furthermore the quality is getting better; the alcohol has a long durability and is produced more efficiently and rapidly.
Environmental:
People are getting more and more aware of the environment and it is necessary that companies do everything to prevent environmental pollution. It is important that the environmental load through the brewing process is as low as possible. People should recycle cans and bottles of different drinks to keep the environment clean and that is by throwing everything on the recycle bin, so that it can be recycled and the environment can be kept clean.
Legal:
Both in the US and Europe drinking alcohol in public places are allowed, but in some places publicly drinking is forbidden. Government is strongly campaigning against drink and driving. There has been a limit to drink alcohol in the EU.
ANS to Q1)(ii): Porters five forces: Fig. 2.1

Power of suppliers
The power of suppliers are high as packaging industry is highly concentrate d Power of buyers The power of buyers are high as supermarkets are big companies so they can buy and sell in bulk Rivalry Threat of substitutes As there are no substitute of beer there are no threats
there is fall in demand of a product
Threat of new entrants
The threat of new entrants is high as a new company may try to open up a branch near the brewery industry by selling everything at a lower price than the brewery and their quality maybe really good than the brewery industry.
Source: http://www.businessballs.com/portersfiveforcesdiagram.pdf
ANS to Q2 (a):Anheuser-Busher In Bev(Belgium) is the second largest brewing

company in the world. In 2008 In Bev acquired the leading American brewer Anheuser-Busch for $52 billion making the company the indisputably the world leader. Now their current strategical plan is to transform itself from the biggest brewery company to the best in the world by building strong global brands and increasing efficiency. From the PESTLE analysis it can be seen political factors like campigns by governments against drunken driving and excessive alcohol consumption in pubs
ANS to 2(b): SWOT Analysis Strengths:

As their brand is a premium brand that is why they are well known worldwide and for that reason a lot of customers will buy products from them and increase the sales of their market which will gain them to make a huge profit. Their packaging system is really attractive, so this encourages more customers to buy drinks from them rather than going somewhere else. The way they advertise their products is really attractive and really strong which encourages more customers to buy their brands and increase sales of their market. Strategic market segmentation and implementation strategies, diversified market segments: ensuring the lack of dependency on one particular market, ombination of skills in directorship, the directors intend to jointly develop business strategy and long-term plans, having wider experience in product and business knowhow, establishment and maintenance of strong capital base, and an aggressive and focused marketing campaign with clear goals and strategies.
Weaknesses:
As it relies on its key brands they don`t look back at their brands whether they need to improve it or not, so that is why maybe later on lot of customers may switch to other brands and start drinking their brands rather than drinking the European Brewing Industry`s drink. Lack of a reputation in comparison to our competitors. The introduction of new organizational practices and personnel who have not previously worked together presents a challenge to the company. A
limited financial base compared to the major players in the industry. Lack of clear-cut channels of distribution. Establishment on the Internet will produce technological challenges.
Opportunities:
It has got a growing demand for non-alcoholic and flavoured beverages as lot of people are buying their products, increasing the sales of the market, and gaining more profit. Specific niche: Appreciation for high-quality brew, enjoyment, and refreshment (and integration therein). The new generation of individuals and families has a far greater appreciation of attractive packaging (image conscious). Current drive by government and specialized institutions such as the Botswana Export Development and Investment Authority towards export of locally manufactured products. Internet marketing and sales though still in its infancy. Increasing number of foreign firms, especially from South Africa looking at penetrating the market.
Threats:
The present growth in the market may result in market saturation, through competition. This competition could emerge from a variety of given sources including:
1. Established mass-market companies' development of new lines and vertically integrating so as to be totally in control of supplies and products being sold on the respective markets. 2. New marketing strategies and tactics by established products and companies. 3. Existing competition, i.e. they might open up their store near 4. Other start-up companies generated by healthy economic growth nationwide. 5. Intolerable price increases by foreign suppliers may occur.
References:
http://www.scribd.com/doc/52317300/Brewing-Industry-Case-Study-part-ans http://www.writework.com/essay/brewing-industry-pestle-analysis

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04.10.

11 SAAD SALAHUDDIN Managing Strategy Assignment

To: Brewery Company From: Saad Salahuddin

ANS to Q1) (i): PESTEL Political:

ANS to Q1)(ii): Porters five forces: Fig. 2.1

there is fall in demand of a product

Threat of new entrants

ANS to Q2 (a):Anheuser-Busher In Bev(Belgium) is the second largest brewing

ANS to 2(b): SWOT Analysis Strengths:

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