External analysis of the company Porter’s five forces model The bargaining power of suppliers The suppliers of raw materials to Heinlein Company are mainly farmers. Therefore, the threat for power of supplier is high. The bottle supplier for Heinlein is provided by Hey Glass Underlain which is fully supplied the green bottle for the worldwide distribution of Heinlein beer. In the past, Heinlein kept only 33% its stake in Hey Glass in order to secure the supply of high quality export bottles at a lower cost to meet the needs for demand but now Heinlein has kept 100% stake in 2002.
Beer is produced by water, barley, hops and yeast. These ingredients are supplied by farmers. Heinlein also mentioned that competition for agricultural products from the blissful industry that is affecting their costs. The bargaining power of buyers The buyers in this industry have many choices as there are many companies serving beer. This will increase the choice of the customer and hence the threat for power of buyers is high.
For example, for serving customer at the pub, there are a lot of beer brands for them to fit their taste such as Guinness, Scrabbles, Tiger. Therefore, buyers now have a choice to choose the one they eke.
As a result, choosing of customer for what kind beer they want to drink will bring threats for Heinlein. The threat of potential new entrants Nowadays, an explosion of smaller brewers has entered the market during the past decade that making the industry much more competitive.
Heinlein is one of the largest brewers in the world and they have to share market with other brewer. The barrier in the beer market is low. Therefore, the threat of potential new entrants for Heinlein is high. This will make Heinlein considering to create innovation or unique ensues into their product that can sustain competitive advantages in the beer market.
The threat of substitutes Beer is a kind of beverage which contains alcohol. However, people can switch to drink wine which also is alcohol drink. Customers taste is not similar so that they have right to choose what they want to enjoy, so this will affect the beer market as well as Heinlein Company. As a result, the threat of substitute for beer market is high. The extent of competitive rivalry Heinlein has achieved the economy of scale in the market especially in Europe. It holds about 30% of market share in European beer market. Since he beer market is growing, so the competitors will try to attain their growth targets.
The large brewer like Heinlein tends to enforce their own strategies to the beer industry and due the economies of scale they will produce higher quality and unique products which can make their own place in the market, hence keep themselves growing to achieve their target. Internal analysis of the company Analysis the resources Tangible: Since Heinlein know that their plant and equipment is a key for company production, they invest so much in the infrastructure to make sure that their operation is working efficiently. For example, Heinlein have four breweries in Russia, all those use KHZ Till plant technology.
This equipment at Whininess’s packaging can processes 50 liter kegs in addition to 30 liter at an output of up to 140 kegs an hour. As a result, the two-lane machine can operate with one racking, six washing and sterilizing stations. Intangible: brand name is most valuable asset of the Heinlein Company, they has built this name Heinlein with premium brand. The company recognizes that brand is very important key for them to develop a strong presence globally in the beer market so that Heinlein have a lot of marketing activities or its brand name.
Furthermore, branding is also a highly defensible competitive advantage for Heinlein; this would bring strength to company expansion. Hence Heinlein Company can stretch their production internationally and add more money for company. Management capability: Heinlein implemented a number of new initiatives in the area of leadership development in 2004. One is a new leadership competency model that defines behavior expectations from all senior managers at Heinlein. The model takes Heinlein company ambitions and values as a starting point and translates these into the leadership behavior squired from senior managers.
With marketing differentiation using different message within normal media advertising can also have differentiating effect. This differentiation will bring strengths for Heinlein. When most advertisers are pursuing essentially the beer market with the same message like showing gregarious groups Of males in public houses having an enjoyable night out. In the other hand, Heinlein managed to differentiate its beer by using a series of advertisements employing humor and the caption Heinlein refreshed the parts other beers can not reach.
Organizational structure In 2005 Heinlein announced that it was created a new top management structure, this would drive and support growth as a global organization. In order to connect functions, operation and finance in a more effective way, the company create a new more streamlines Executive Board. Hence change would lead to create strengths for operating regions and global functions. Furthermore, Heinlein has grown substantially over the past four years. The new structure is better suited to the present organization and ensures faster decision-making.
In the beer market where the consolidation process is accelerating and rapid introduction of innovations is essential, this is crucial to the achievement of Whininess’s long term ambitions. Culture Heinlein is proud of they are one Of the world’s great beer companies. Hence their culture will reflect the company view and values. These values create so many strengths for company to develop their environment within the company. Heinlein based on the value that they respect their employees, business partners, customers, shareholders and all others who are connected to the company.
Furthermore, Heinlein make life more enjoyable by bring enjoyment to life, they also encourage this core value within the working places and atmosphere within the company. In addition, company has a fundamental belief in the concept and delivery of quality, it is also reflected in their other activities such as their social and employment policies. This will create benefit and value both for Heinlein and their reputation.