Strategic Analysis

by Dominik Sauer

Content 28/40
Vision & Values 3
Mission 4
EFE & IFE 6
CPM8
TOWS Matrix 11
Space Matrix 13
BCQ Matrix 16 IE Matrix20
PESTEL 23
Grand Strategy Matrix 25
QSPM Matrix 27
Dominik Sauer

Vision & Values

Our values represent what we stand for as a

corporate citizen, a business partner and an
employer. They inspire us and are embodied by our
employees at every level, function and geography of
our business

The 5 core values are:

Bringing Enjoyment to life
Respect for individuals, society and the planet
Passion for quality
Code of business conduct
Enjoy Responsibly

Dominik Sauer

Mission

HEINEKEN is driven by business priorities. They

help us to achieve our goal of sustainably growing
our brands in all markets. Strategies that support
these allow us to get the most value out of our
heritage, our global scale, our people, our brands
and the green thread that unites us all around the
world, the Heineken brand.
The 6 Business Priorities/Missions are:
Grow Heineken Brand
Consumer-inspired, Customer-oriented and brandled
Capture the opportunities in emerging markets
Leverage the benefits of Heinekens global scale
Drive personal leadership
Embed and integrate
sustainability
Dominik
Sauer

INPUT

Dominik Sauer

EFE
External
Factors
Opportunities
1
2
3
4

1
2
3
4
5

Weig Ratin Score

ht
g
Investments in emerging brands (Amstel,
0.18 3
0.5
Strongbow Gold..)
0.07 2
4
Recovery of Global Economy
0.2
2
0.1
Higher consume in Africa, Asia, Latin
0.09 2
4
America
0.4
ThreadsCSR to improve company image and
Higher
0.1
set example
8
Competition (local and global)
0.13 3
0.3
Excises + Taxes (alcohol abuse a
0.12 4
9
governmental concern)
0.09 1
0.4
Ukraine/Russia Crisis (European trade
0.08 2
8
regulations)
0.04 1
0.0
Lower consumption in Europe
9
Total:
1
Burdens through different Requirements
of
0.1
packaging
6
2.06
0.0

IFE
Internal
Factors
Stengths
1
2
3
4
5

Brand available in 178 countries with over

200 brands
Strong cost reductions (goals achieved)
High innovation rate (5,9%)
Strong transfer of Code of Conduct to
employees
Strong Marketing (Cannes Lions Awards)
and
sponsorship (UEFA Champions League)
Weaknesses

1 Weaker trading that expected to key

markets (U.S, Vietnam, France)
2 Rather high pricing compared to many
3 local beers
High average age of consumers (ca. 30
Total:
years old)
Dominik Sauer

Weig Ratin Score

ht
g
0.23 4
0.9
0.14 3
2
0.09 2
0.4
0.04 3
2
0.15 4
0.1
8
0.1
2
0.6
0.19 3
0.5
7
0.06 1
0.1
2
0.0
6
1
0.1
2,97

CPM
Critical success
factor

Heineken

weigh
t
Ratin
g

Score

AnheuserBusch
Ratin
g

Score

SAB-Miller
Ratin
g

Score

0.07

0.28

0.21

0.21

0.1

0.3

0.4

0.3

Technology

0.06

0.12

0.18

0.18

Financial Position

0.09

0.27

0.18

0.18

0.1

0.2

0.4

0.3

Customer loyalty

0.11

0.33

0.22

0.44

Brand name

0.11

0.44

0.22

0.33

Pricing

0.07

0.14

0.28

0.21

Product Quality

0.09

0.27

0.27

0.27

Compatibility

0.1

0.2

0.3

0.3

Promotion

0.1

0.4

0.2

0.4

Innovation
Management

Market share

Matching

Dominik Sauer

TOWS Matrix

Dominik Sauer

Strengths - S

TOWS
Matrix
TOWS
MATRIX

1. over 200 Brands in over 175

countries
2. Strong cost reductions
3. High innovation rate
4. Strong transfer of Code of
Conduct to employees
5. Strong marketing (Cannes Lions
awards) and Sponsorship (UEFA
Champions League

Opportunities O
1. Investments in emerging
brands
2. Recovery of Global Economy
3. Higher beer consumption in
Asia, Africa, Latin
America
4. Stronger CSR for company
image and to set
examples

Threats T
1. High competition (local and
global breweries)
2. Higher Taxes and Excises
(Burdens) since alcohol
abuse is governmental
concern
3. Ukraine/Russia Crisis
4. Burdens through different
Requirements of

Weakness W
1. Weaker Trading than expected
to key markets (US., France,
Vietnam)
2. Rather high pricing compared
to many local beers
3. High average age of consumers
(ca. 30 years old

SO - strategies
1. Innovations (flavours) not

only in Europe but also in

emerging markets
2. Use Marketing to promote
CSR activities

WO strategies
1.

2.

Expand trades to key

markets through Economic
recovery
Justify pricing with CSR
engagement

ST strategies

WT strategies

1. Use Marketing/Sponsorship

1. Avoid price increase to be

interesting for younger
generation
2. See packaging not as a
burden, but as a chance to
appeal to younger generation

advantage to be more
powerfull than the
competition
2. Cost reduction to
overcome higher taxation

SPACE Matrix

Dominik Sauer

Internal Strategic Position

External Strategic position

Financial Strengths (FS)

Environmental Stability (ES)

Return on Investment
leverage
Working Capital
Liquidity
Price earning ratio

Total
Average

4
3
4
3
3

17
3,4

Technological changes
Rate of Inflation
Price range of Competing products
Competitive pressure
Barriers to entry into market
Demand variability

Total
Average

Competitive Advantage (CA)

Market Share
Product Quality
Customer Loyalty
Technological know-how
Control over suppliers and
distributors

Total
Average

-2
-2
-3
-5
-4
-2

- 18
-3

Industry Strength (IS)

-6
-5
-4
-2
-4

- 21
- 4,2

Growth Potential
Profit Potential
Financial Stability
Labor cost
Technological know-how

Total
Average

4
3
4
2
4

17
3,4

FS

CA

IS

ES
FS - ES

3.4 3 = 0.4

CA + IS

- 4.2 + 3.4 =
- 0.8

The firm should follow a

Conservative Strategy. It is
facing a global market which is
not growing very much but
with a lot of serious
competitors worldwide. To
stand out, they have to be
financially stable and
innovative. Moreover, the
companys strategy includes
the penetration of
new/emerging markets in
which the consume of beer is
rising (Asia, Latin America,
Africa) instead of trying to
increase their sales in mostly
saturated market.

BCG Matrix

Dominik Sauer

Table
Brand
Market
share
%

Largest
Competitor
GROWTH
s Market
RATE %
share
%

Relative
MARKET
SHARE %

ID

Revenue
%

3,1

42

20

18

0,9

Amstel
Beer

1,5

20

15

12

0,8

Desperados 1,4

19

12

13

11

Cruzkampo 0,9

12

0,625

0,75

Gold

0,5

Profit %

Dominik Sauer

Relative Market Share

1

0,5

Market Growth Rate

20%

3
10%

2
4

0%

 Of the 5 most important brands within Europe,

Heineken itself is by far the most sold and maintains a
very high relative market share compared to its direct
competitors.The market growth rate is rather low
though, since the consume in the key markets
declines and new markets have to be discovered.
Almost all of the most successfull Heineken Products
in Europe are Cash Cows. The Products are well known
to the customer, they know what to expect. The only
Product
which has a higher growth potetial is Desperados in
which Heineken could invest more.

Dominik Sauer

IE Matrix

Dominik Sauer

EF
E
4,0
Grow

And

Build

Hold

And

Maintain

Harvest

Or

Divest

3,0

2,0 2,0
6

1,0

4,0

3,0
2,0
2,9
7 Dominik Sauer

1,0

IFE

 Heineken finds itself in the fifth cell of the IE

Matrix. This sell suggests a Hold & Maintain
Strategy. As already mentioned before, Heineken
has to penetrate new markets in order to grow
further. Moreover, a strong Product Development
helps to increase their marketshare, which is why
Heineken is already investing more in
Development than in the past years.

Dominik Sauer

PESTEL

Dominik Sauer

Pestel

Issues

Political

- Crisis Ukraine <-> Russia

- Alcohol Taxes

Economical

- Economic Crisis / Recover

- High liquidity

Social

- Different Demographics in
Different Continents
- Known by Football fans

Technological

- Improve effectiveness of
Transportation

Environmental

- Water protection plants

- Drive down CO2 emissions
- Sustainable local sourcing

Legal

- Alcohol a legal issue which

differs from country to country

Grand Strategy Matrix

Dominik Sauer

Grand Strategy
Matrix

Heineken is working in
a rather slow growing
market but within this
market it maintains a
strong competitive
postition. The consume
of beer is not destined
to grow highly in total
(decrease in some
continents while
increasing in others).
Heineken established
several mergers and
acquisitions in the last
decades to stay
competitive.

Dominik Sauer

QSPM Matrix

Dominik Sauer

Key Internal Factors

Strengths

Expand existing
Markets
Weight

AS

Develop / Penetrate
new/emerging
markets

TAS

AS

TAS

International known Brand name

0.23

0.69

0.92

Strong cost reductions

0.14

0.42

0.42

High innovation rate

0.09

0.36

0.27

Usefull Code of Conduct

0.04

0.12

0.08

Effective spnsorship / marketing

0.15

0.45

0.6

Weak trade to key markets

0.19

0.76

0.38

High Pricing

0.06

0.12

0.18

Average age of customer is too high

0.1

0.2

0.2

Weaknesses

Total weight

1.00

3.12

3.05

Key External Factors

Opportunities

Expand
existing
markets
weight

AS

Develop / Penetrate
New/emerging
markets

TAS

AS

TAS

Investments in own emerging brands 0.18

0.72 3

0.54

Recovery of Global Economy

0.07

0.21 3

0.21

Higher consume in emerging

markets

0.2

0.2

0.8

Expand CSR activities

0.09

0.27 3

0.27

Competition (local and global)

0.13

0.39 3

0.39

Excises + Taxes

0.12

0.48 4

0.48

Ukraine/Russia Crisis (Trade

Regulations)

0.09

0.27 3

0.27

Lower consumption in Europe

0.08

0.32 1

0.08

Burdens through packaging

requirements

0.04

0.08 4

0.16

Threats

Total weight

Total Attractive Score

1.00

2.94
51

6.0

3.2
47

6.25

Considdering all internal and

external critical factors that
influence the Heineken company,
the development or penetration
of new markets represent a big
opportunity which must not be
denied. While following the
strategy of penetrating new
markets with their product, the
key markets that exist already
should not be neglected either,
since the score between both
strategies is not highly different.
Dominik Sauer

References
- Annual report of Heineken 2013
- http://
www.handelsblatt.com/unternehmen/industrie/brauerei-konzern
heineken-verkauft-mehr-bier/7292752.html

Dominik Sauer