Case study on Heineken’s Operational Strategy Case study on Heineken’s

Operational Strategy In the 1980s, with the increasing consumption of light beer in the
US alcoholic beverage market, Heineken N.V., one of the world’s largest breweries in
Amsterdam, introduced Amstel Light in the US. Amstel Light was the first imported light
beer in the US beer industry. By the mid 1990s, Amstel Light contributed 75% of the
total growth of Heineken’s import segment in the US and became the No.1 importer in
the US beer market. The Hispanic community grew and they demanded ‘high quality
beer’ for which they were willing to pay, ‘high prices’ encouraged Mexican beer (Corona
Light and Corona Extra Light) to enter and subsequently capture the US light beer
market. By 2005, Corona Extra led the market whereas Heineken’s Amstel Light had
slipped to the No. 7 position in the US market for imported beer. To reclaim its No.1
position, the company launched a new light beer called ‘Heineken Premium Light Lager.’
In addition to this, the company also tried to promote its Amstel Light through intensive
promotional strategies.

Pedagogical Objectives:

• The case deals with the different dimensions of the beer industry.
• It analyses the competitive strategies of US beer category
• It deals with the importance of advertising and promotional strategy in alcoholic
beverage industry.
• The case also analyses the concept of brand extension in beer industry.

• United Breweries Group or UB Group, based in Bangalore, is a conglomerate

of different companies with a major focus on the brewery (beer) and alcoholic
beverages industry. The company markets most of its beer under the Kingfisher
brand and has also launched Kingfisher Airlines, a domestic airline service in
India.
• The group is headed by Dr.Vijay Mallya who is also a member of the Indian
Parliament. United Breweries now has greater than a 40% share of the Indian
brewing market.
The UB Group was founded by a Scotsman, Thomas Leishman in 1857. United
Breweries made its initial impact by manufacturing bulk beer for the British troops,
Kingfisher, the Group's most visible and profitable brand, made a modest entry in the
sixties.
First was the addition of McDowell as one of the Group subsidiaries, a move which
helped United Breweries to extend its portfolio to wines and spirits business.
Strategically, the Group moved into agro-based industries and medicines when Mallya
acquired Kissan Products
UBL is one of only three in the world to own seven millionaire brands and at least five
brands
The UB Group today controls 60% of the total manufacturing capacity for Beer in India.
The UB group is also into manufacture of Fertilizers United spirits limited has 144 brands
under its umberella.