Producing Industry Case Study

 Brewing Market Case Study Essay

Module: Strategic Planning Process

Lecturer: Michael Shovelin

Date: 04th September 2010

Postassignment: Circumstance example

Global Forces plus the European brewing industry


This task is based on the case example ‘Global forces as well as the European brewing industry' and relates to two questions increased in chapter 2 by the end of the case example (Johnson ou al. 2008, p. 91) of the publication ‘Exploring Corporate Strategy: Textual content and Cases' by Johnson, Scholes and Whittington.

1 . ) Using the data from the circumstance (and some other sources available), carry out to get the Western european brewing sector (i) a PESTEL analysis and (ii) a five forces analysis. What do you conclude? (i) PESTEL research

One application to analyze the broad macro-environment is the PESTEL analysis. Inside the PESTEL research environmental influences are labeled into politics, economical, interpersonal, technological, environmental and legal aspects. It assists to identify just how future trends might affect an organization and furthermore, to identify the real key drivers of change to make scenarios to get the feasible future.

Political elements

There is an overall decline of consumption of Beer in Europe as much traditional important markets have been made more and more aware of the social complications associated with drinking. Factors may be the active campaign of European governments against drunken driving, binge-drinking and therefore the long term physical fitness problems.

Economic elements

In the case analyze there is the look at the overall drop of Western beer intake, while there was an increase in rising markets (e. g. China, Brazil) around the world. This could be because of the government promotions which brought on a change in product sales from the ‘on-trade' (beer used in pubs or restaurants) to the off-trade (retail/supermarkets). In addition, the success of German born supermarkets like Aldi and Lidl with the own ‘private label' drinks rather than the brewery-branded beers has a influence for the European brewing industry. Supermarkets are offering discount offers. Also the surge of the main purchasing costs like product packaging, raw material and strength will have affect on the beverage price elizabeth. g. Heineken). Also, the rise of gas prices that may affect the distribution network, therefore transportation costs will increase. Besides, due to the economical crises the breach between rich and poor is definitely steadily growing and thus various people cannot afford any more to be sent for dinner or perhaps having a beer. Through legal restrictions the need for alcoholic beverages in public places could declines. Furthermore, acquisitions, certification and ideal alliances occurred because the leading brewers challenge to control industry. The global demands for consolidation due to overcapacity within the sector are stage that impacts this industry. There is a developing trend toward cross-border mergers and purchases. Introduction of higher-priced premium products permit sales values raise. If there are normal disasters like previously the fires in Russia this has an impact within the prices with the raw materials.

Social/cultural factors

Wine have become ever more popular in the Upper European markets. People might rethink their very own lifestyle and like drinking a great wine rather than beer and ‘binge drinking'. This could be because wine is usually associated with the upper class and people using a higher cash flow. Moreover, people are getting more plus more health conscious and so, will drink in moderation. Furthermore, there is a rising demand for high grade and fruit-flavored beers and also an increasing demand for ‘private-label' beers. There will become an increasing acceptance of baking pan European brands. Besides, the value of grocery stores in syndication and the regarding own-label items will rise.

Technological factors

Research and development is important in the...

Referrals: Johnson, Gerry, and Kevan Scholes and Richard Whittington. Exploring Corporate and business Strategy – Text & Cases. eighth ed. Harlow: Pearson Education / Prentice Hall Economic Times, 2008.





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