Ab Inbev And Heineken Case Study

AB InBev and Heineken face its greatest challenge in this years. There is a falling consumer demand and as already described previously with the Porter 5 forces (Porter, 2008) they are treated by new entrants like microbreweries on one side and on the other side by the increase of substitution products like wine and alcohol. In additional also the governments with its legislation play a role in this scenario. In fact the consumer demand can be effected by the increase in the alcohol taxes but especially what we are witnessing in the recent years there are more and more state that are legalizing Marijuana. The use of recreational cannabis represents a substation to a bottle of beer and therefore a real threat to the beer industry (Pellechia,

For this reasons the best strategy within Wiltbank et al.’s matrix model is to be adaptive for both AB InBev and Heineken. Adaptive means to understand where the environment is rather then predicting where it will be, the rapid adaption is more important than strategic intention (Wiltbank et al's, 2006). Heineken and AB InBev in these markets need to understand the customer needs, which means for example to understand which beer flavors this specific customers like most and see where they have competitive advantage (Heel, 2017). When multinationals ice cream companies went to Russia and export the “wester” ice cream flavor most of them they failed as they didn’t considered the Russian taste (customer needs) were completely different ( Rustad, Mattu, Petinova, 2005). Beer Companies cannot make the same mistake, especially in a market that will have the higher beer growth in the coming years. Being adaptive could also mean change the way the corporate strategy has been done so far. Ab InBev expand his business thought acquisition, following the rule eat or been eaten and immediately after the acquisition implemented a voracious cost cutting, usually with lay off, to increase the profitability. On the other hand Heineken usually starts to export and then move to acquisition. Heineken acquires the company who is highly complementary. It has to fit with Heineken standards in order to fit the overall architecture (Meckler,

From close to zero beer consumption in the 1980s, China now consumes 20% of all beer in the world which is a huge market but at the same time not an easy market (Tsui, 2016). China has seen the most dramatic growth in urbanization over the past decades, a trend that will continue in the future (Tsui, 2016). Urbanization in fact is another important element to predict the beer consumption. In the coming years we will have more and more of ‘global cities’ which will have important implications for business strategy. In these cities, you will have the trend setting global citizens gather (Tsui, 2016). This means fundamentally different marketing and distribution strategies focusing on premium products targeted at urban centers with more personally appealing marketing channels and distribution channels (Tsui, 2016). Brands with higher premium like Heineken will have a higher market share in these