Earlier, we did a SWOT analysis of Carlsberg, the international beer and party giant. Following the same theme, we are now going to learn about the SWOT analysis of Heineken.
Heineken is a Dutch brewing company known for its large beer with a red star in a green bottle. The spirit company is popularly known as the brand for the working-class people, made famous by their marketing efforts. They are known for branding and sponsorship deals with popular sports and events to catch their audience’s hearts..
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In this case study, we are going to conduct the SWOT analysis of Heineken and break down how the company is fairing and what its current position in the market is.
Before we begin dealing with the crux of the matter, let ys start by learning more about the company, it’s history, products, competitors and financials.
Heineken International, a Dutch brewer, operates more than 160 breweries around the world, it is the world’s second-largest brewery. They sell and manage multiple alcohol brands on their portfolio – Amstel, Desperados, Tiger, Tecate, and Red Stripe being chief among them. However, their chief brand and the most famous beer in their portfolio is called Heineken as well and is a cult classic amongst beer lovers – known for its iconic green colour.
Gerard Adriaan Heineken founded the brewery in Amsterdam in February of 1864. The company’s products are sold in Europe, Asia Pacific, North America, South America, the Middle East, and Africa. with over 250 brands under its control, the company is one of the largest international brewers. Heineken focuses on flavoured beer, cider brands, and malt beer. Recently, the company has been focusing on expanding its reach in Latin America, acquiring businesses that are auxiliary to the alcohol business such as bottling and capping.
The company is famous for the various sponsorships it does, especially for sports events. Being of European origin, the company focuses on associating itself with sports like football, tennis and rugby. They have sponsored major championships such as the Europa League, Champion’s League and French Open.
|Chairman||Gerard Adriaan Heineken|
|Year Founded||15 February, 1864|
|No. of Employees||84,000 (2020)|
|Market Cap||€63.81 billion (2020)|
|Annual Revenue||€23.77 billion (2020)|
|Net loss||€102 million (2020)|
Products of Heineken
Heineken is an international brewery and dabbles in:
- Pale Lager Beers
- Flavoured Beers
Competitors of Heineken
As an international brewery, the competes around the globe against the following breweries:
Now that we understood the origin and the background of the company Heineken. Let’s dive into the SWOT analysis in the coming section.
SWOT Analysis of Heineken
SWOT Analysis can be used to ensure that the company’s best advantage is realised. It can also lower the odds of failure by identifying what it lacks and removing risks that would otherwise catch the organisation off guard.
Even better, the company can begin to develop a strategy that sets it apart from its competitors, allowing it to compete successfully in its market.
So, let’s look at the SWOT analysis of Heineken and understand how the company is operating and what lies in its future.
Strengths of Heineken
Strengths are what a company has that gives it a competitive advantage over its competitors. Heineken has the following advantages:
- Differentiated Products for Different Markets: While Heineken owns 250 brands, not all of them are available in every market, and the company offers different products in different markets. Brands sold in Africa, the Middle East, and Eastern Europe include Amstel, Primus, Walia, and Heineken. Popular brands such as Heineken, Tecate, Amstel, Sol, and Dos Equis have been assigned to the American market, while Heineken, Anchor, Larue, Tiger, and Bintang are sold in the Asia Pacific.
- Variety of Products: Heineken beers are well-known for their numerous variants. For example, Amstel’s is available in a variety of flavors, these variants not only assist Heineken in reaching a large audience but also in satisfying specific customer tastes.
- Putting the Spotlight on Heineken: Despite the fact that the corporation sells a range of beer brands, Heineken is their only international brand. The corporation always emphasises the brand Heineken in all of their promotions, with the other brands shown as sub-brands for each location. Heineken’s brand recall and awareness have improved as a result of this campaign.
- Segmentation and Targeting: Heineken’s flavoured beer segment, which is one of their very distinctive offers, concentrates on the young adult market, unlike their competitors. The tastes were chosen following a comprehensive study into the preferences of the target segment.
The above-mentioned acts as the internal strength of Heineken. So, now let’s see the internal weaknesses of Heineken.
Weaknesses of Heineken
Weaknesses are areas of the business or brand that need to be improved. Heineken’s main flaws are as follows:
- Currency Fluctuations: Heineken derives more than 70% of its revenue from foreign markets, and currency fluctuations such as the Euro crisis, Brexit, and the rise of the dollar have impacted the company’s margins.
- Poor Margins: Heineken’s key markets are developed countries where the beer business is established and pricing is the only differentiating feature. Though Heineken’s flavored beers have high-profit margins, their standard brands, which account for the majority of their income, do not.
- Anheuser Busch & Co. Sab Miller Integration: Anheuser Busch and their main rival Sab Miller have merged, creating the largest force in the liquor industry. This has had a significant impact on Heineken’s global business, which will now require major strategies to combat this merger.
Opportunities of Heineken
Opportunities are routes in the business’s surroundings that can be taken advantage of to increase profits. Below mentioned are the opportunities of Heineken.
- Microbreweries: Many pubs throughout the world have started making their own beers, which customers prefer to branded drinks. For seasoned brewers like Heineken who wish to build their own microbrewery chain, this may be a major opportunity.
- Exposure: People are more aware of global beer and wine brands than in previous years, and many young customers now specifically request flavoured beer or signature wine flavours. Heineken may be able to capitalize on this opportunity.
- Newer Markets: As a mid-tier priced beer, Heineken can capitalise on the increasing global affluence and burgeoning middle class in countries like India, Bangladesh and Indonesia.
Threats of Heineken
Threats are environmental factors that can be detrimental to the growth of a business. Among the threats are the following:
- Intense Competition: Miller, Fosters, Anheuser Busch, and Molson Coors are some of Heineken’s major competitors. With the recent mergers around the world, regional brands have gotten even stronger in competing against each other.
- Legal Difficulties: The most serious threat to any alcohol company is overcoming the legal stumbling blocks that may arise when selling in foreign markets. This includes red tape, licenses, and necessary permissions, all of which are both time-consuming and costly.
- Marijuana: With increasing legalisation of the marijuana plant, people are opting for different stimulants for recreation. This has posed a great threat to the hegemony of alcohol as the only legal stimulant.
We now done a deep dive into the SWOT analysis of Heineken. Let’s wrap it up with the findings below.
Consumers are wanting more and more tailored products and experiences in a fast-changing world. Heineken has to constantly improve their branding marketing techniques while maintaining a consistent value image to be at the top for nearly 150 years. The brand’s campaigns were meticulously created to offer shareable themes, increase brand awareness, and maintain the brand’s position as the world’s top brewery. Despite its brilliant product portfolio and reach, the company is facing increasing competition, especially on a local level with craft beers and the merged strength of SAB and Miller.
Even the best brands can suffer at the hands of increasing competition in the market. In the face of rising competition, impactful marketing becomes a necessity for the company. Hence, gaining a professional understanding of digital marketing is essential if you wish to work in highly competitive industries such as alcoholic beverages. If marketing is something that interests you, you should definitely check out the Post Graduation Programme in Digital Marketing offered by IIDE that will help you transform into the managerial candidate in the marketing department of top companies.
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