Case Heineken

Case Objectives
1. To investigate how a firm competes in a global market.
Case Synopsis
This case deals with a firm that had been a pioneer in establishing itself as a global competitor in
the beer business, gaining recognition around the world based on its well-known green bottle.
Heineken had to respond to a wave of massive consolidation in the beer market. Many beer
brewers had been moving aggressively to establish themselves as global players by acquiring
smaller regional and national players.
Jean-Francois van Boxmeer was appointed as Heinekens first non-Dutch CEO in October 2005.
Since his appointment, Heineken restructured itself to increase its ability to respond to the megaacquisitions done by its formidable competitors such as Belgiums InBev and South
Africa/United Kingdoms SAB Miller. Heineken entered into a joint venture deal with
Denmarks Carlsberg to acquire Scottish-based brewer Scottish & Newcastle, and most recently
had acquired breweries in Nigeria, Ethiopia, and Mexico. This would help establish Heineken as
the leading brewer in Europe, the second largest in Africa, and a supplier to the growing
Hispanic population in the U.S. Heineken had needed to raise its stature in its various worldwide
markets and respond to the changes that were occuring in the global beer industry. Were the
current strategies effective?

Case Exercise: Heineken

The following questions are based on both favorable and unfavorable key symptoms of Heineken, as well as
the underlying causes that affect key symptoms as they are observed in the case. In addition, there is a general
question on solutions that also addresses the causes. Each multiple choice and short answer question number
under Key Symptoms corresponds to the same question number under Underlying Causes (e.g., Question 3
under Key Symptoms 1 corresponds to Question 3 under Underlying Causes 1).
Key Symptoms 1

Please answer the following multiple choice questions.

1. Which of the following was accomplished by Heinekens acquisition of Asian Pacific Breweries?
Heineken built new manufacturing facilities in China.
Heineken added 30 breweries in the Asia-Pacific region.
Heineken began exporting Heineken to locations such as Singapore and
Thailand.
Heineken created a joint venture with Tiger beer and Bintang lager.
None of these is correct.
2. What was Heinekens primary method for gaining better access to
new markets?
It sent members of the Heineken family to open new facilities

in Africa and Asia.

It signed reciprocal trade agreements with other global
brewers.
It relied on word of mouth and natural growth in demand for
its products.
It bought small brewers in countries around the world.
None of these is correct.
3. What plan did Heineken implement in 2005 in order to support the
companys next phase of growth?
Heineken Global
BBAG
Fit 2 Fight
Operation Insight
Target Africa and Asia
5. After being overtaken by Group Modelos Corona in the late 1990s,
what new beer did Heineken release?
Heineken Stella Artois
Heineken Guinness
Heineken Samuel Adams
Heineken Golden Wheat
Heineken Premium Light

Key Symptoms 2
Please answer the following short answer questions. Note: Your instructor will need to manually grade
these questions.
1. What major strategic moves has Heineken made since 2011?
2. What changes has Heineken made to its executive committee?
3. What branding concern did Heineken face in the U.S. market beginning in the late 1990s?
4. What acquisitions in the first decade of the 2000s led to Heinekens success in the Eastern European
market and its continued success in Western Europe?

5. After taking over as CEO, what did Jean-Francois van Boxmeer do in order to work on the companys
culture?

Underlying Causes 1
Please answer the following multiple choice questions.
1.Why did Heineken secure a controlling interest of Asian Pacific Breweries?
It was losing market share domestically and needed an alternative investment.
It had experienced declining revenue and was looking for alternative investment
opportunities.
It allowed it to secure a stronger foothold in the quickly developing Asian beer
market.
Its profitability had hit an all-time low and the Asian markets were expected to
provide higher margins.
None of these is true.
2. Why has the beer industry been undergoing major changes in recent years?
Increased governmental regulation has forced organizations to consolidate in order
to maintain competitiveness.
Profit margins have become so slim that companies are dependent on achieving
high economies of scale that are only achievable as a result of consolidation.
Consumer brand recognition has become so important that medium-sized and
micro-breweries can no longer compete.
Most large brewers have used acquisitions or mergers with competitors in foreign
markets in order to become global players.
None of these is true.
3 Why was the Heineken executive board reduced to two members?
.
The change was intended to centralize control at the top and help
the company assess methods to reach younger customers with
developing tastes.
The previous executive board had been ineffective in reaching
diverse and hard-to-access customers.
The company was looking to remove all former family members
from the board in order to avoid the potential limitations that result
from nepotism.
The company was seeking to reduce the red tape needed for
decision-making in order to adapt to a more dynamic market.
None of these is true.
4 Why did Heineken go against its past strategy and make major acquisitions, such as that of
. BBAG and Scottish & Newcastle?

Heineken was able to acquire these companies at a discounted price.

These acquisitions allowed Heineken a better foothold in the U. S. and African markets.
The company was trying to avoid falling into the same trap of other large companies in
the industry.
These major acquisitions were intended to help Heineken maintain global
competitiveness against its rivals.
None of these is true.
5.How was Group Modelos Corona able to unseat Heineken as the top foreign beer in the
United States in the late 1990s?
They were able to appeal to one of the fastest growing segments of beer drinkers,
Hispanic Americans.
They were able to take advantage of lower cost manufacturing facilities, called
maquiladoras.
The change reflected the direct influence of Jimmy Buffetts appeal to American beer
drinkers.
Group Modelos Corona was able to make heavy inroads with the top American beer
drinking market, sports fans.
None of these is true.

Underlying Causes 2

Please answer the following short answer questions. Note: Your instructor will need to manually grade these qu

1. Why did Heineken secure a controlling interest in Asian Pacific Breweries?

2. Why did Heineken make changes to its executive committee as part of the Fit 2 Fight plan?
3. What has Heineken done to refresh its brand to better appeal to younger consumers in the United States?
4. What has led to Heinekens success in the Eastern European market?
5. Why did CEO Jean-Francois van Boxmeer feel it was important to work on the companys culture?

Solutions

Please answer the following short essay question. Note: Your instructor will need to manually grade this
question.

1. Based on the data available in the case, what issues can you identify currently facing Heineken and
what strategic action(s) could be taken to remedy these issues?