Heineken: The Four Drivers Of Foreign Direct Investment
Introduction
Heineken was founded in 1864 was The first beer that was introduced and exported to United States was henieken, way back in the early 1940s. It became an essential market for Heineken and gradually expanded into one of the world largest beer markets. Despite being one of the world largest breweries, Heineken does not have any brewery to produce beer in the United States. By late 1940s, Dr H.P Heineken, sent his son, Alfred and has brought in new marketing strategy and new technology has led to Alfred to foresee a drastic impact to further expand Heineken business.
Determinants of internationalisation
There are four drivers of Foreign Direct Investment (FDI). First driver refers to the resource seeking where Multinational Enterprise (MNE) invest in the host countries to obtain resources, such as raw material for product, which the home country do not have. Second driver refers to the market seeking where the domestic market is either saturated or blooming. Third driver refers to the efficiency seeking where MNE seeks for the factors that are advantages to MNE and strategized it in the different location. Last driver refers to the strategic asset or capabilities seeking
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This is because outside of their base country, America is the 2nd highest beer consuming country in the world. They are also the leading country that has the strongest global presences, they entered in 1940s and had distributed themselves in over 70 percent of their beer in the nation’s retail outlet that handles alcohol. America was the only country that was left untouched after the World War 2, hence they had a booming economy which was strategic for Heineken to enter. This was to penetrate other global markets to allow they to gain worldwide recognition. America was known for their creative, they specialise in marketing which help introduce and penetrate their alcohol
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