Professional Documents
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GROUP ASSIGNMENT SCM Group1
GROUP ASSIGNMENT SCM Group1
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TABLE OF CONTENT
1. PEST analysis.....................................................................................................................4
1.1 Political factors.............................................................................................................4
1.1.1 Political stability...............................................................................................4
1.1.2 Changing policies.............................................................................................4
1.1.3 Bureaucracy and corruption...........................................................................4
1.1.4 Taxation, trade restrictions, and intellectual property protection..............4
1.2 Economic factors..........................................................................................................4
1.2.1 Economic/business cycle stage........................................................................4
1.2.2 Inflation and employment...............................................................................4
1.2.3 Labor Market Conditions...............................................................................5
1.2.4 Economic structure..........................................................................................5
1.3 Social factors.................................................................................................................5
1.3.1 Demographic trends.........................................................................................5
1.3.2 Equality and Power Distance..........................................................................5
1.3.3 Online shopping...............................................................................................5
1.3.4 Spending patterns and behavior.....................................................................5
1.4 Technological factors...................................................................................................6
1.4.1 Social media marketing...................................................................................6
1.4.2 Research and Development on technology ...................................................6
1.4.3 Shortened product life cycles..........................................................................6
2. History of industry development......................................................................................6
3. Products segmentation.......................................................................................................6
4. Enterprises in the industry................................................................................................9
5. Actual Sales/ outputs of Vietnamese beer........................................................................9
5.1 Revenue.........................................................................................................................9
5.2 Output...........................................................................................................................9
5.3 Revenue and output by enterprise..............................................................................9
5.4 Analysis.......................................................................................................................10
5.5 Reasons for growth....................................................................................................10
5.6 Challenge....................................................................................................................10
5.7 Forecast.......................................................................................................................10
6. Sales Target.......................................................................................................................10
6.1 Target..........................................................................................................................10
6.2 Market segment..........................................................................................................11
6.2.1 Popular beer...................................................................................................11
6.2.2 Premium beer.................................................................................................11
6.2.3 Craft beer........................................................................................................11
6.3 Influencing factors.....................................................................................................11
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6.4 Conclude.....................................................................................................................11
7. Compare to the development in the world or in the region.........................................11
7.1 Compare with the world............................................................................................11
7.2 Compare with area.....................................................................................................12
7.3 Recommendations......................................................................................................12
7.4 Conclusion..................................................................................................................12
Part V: References..................................................................................................................28
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PART I: CURRENT SITUATION OF VIETNAMESE BEER INDUSTRY
1. Pestle Model
The application of PESTEL analysis can help identify the major external environmental forces
that shape the strategy and competitive landscape and support its strategic decision-making
process.
Political factors have a significant impact on long-term sustainability and profitability in the
PESTEL study. Diversifying the systemic risks is crucial for success in a dynamic international
company environment, particularly in a political setting. The following political elements must
be taken into account throughout the strategic planning process since a nation's political
environment is made up of many different aspects.
Government policy changes that happen frequently make the environment more unclear,
which is bad for corporate success. Because the government's priorities for the growth of various
industries may change as a result of political changes.
Corruption and bureaucracy hurt the business climate. Dealing in nations with elevated levels
of corruption and inadequate law enforcement renders the commercial landscape increasingly
capricious. because the public's confidence in corporate entities and the political and economic
system as a whole is threatened. Corruption can affect many aspects of running a business, from
contracting and licensing to fraudulent transactions and ongoing legal action.
High taxes limit exports and have an impact on global trade. Restrictions on advertising and
taxation on alcohol might affect marketing tactics and profitability. Beer is subject to a high
special consumption tax in Vietnam, which may have an impact on consumer behavior and
affordability. Similar to how high trade barriers can damage exports and sour ties with
international trading partners, they can also increase the complexity of the corporate
environment.
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1.2.2 Inflation and employment
The ability of the industry to pursue its long-term growth strategies will depend on the GDP
growth rate. A high GDP also indicates that customers have more purchasing power. High
unemployment is a sign that there is excess labor available for much less money. The cost of
production can be reduced by operating in such a market.
Wage rates and the availability of skilled workers are determined by labor supply and
demand. It is necessary to forecast and analyze labor market situations to comprehend how to
draw in skilled individuals and use their abilities to boost corporate performance. Flexible labor
markets allow us to benefit from increased worker productivity. On the other hand, working in
tight labor markets may lead to labor wage disputes and other problems brought up by strong
labor unions.
The current economic structure has an impact on company operations. In contrast to perfect
competition and monopolistic competition, the economic and regulatory landscape in an
oligopolistic or monopolistic organization will be distinct.
Changes in demographic patterns like the aging population, migration trends, and socio-
economic variables have paramount importance for industry. Studying the demographic
characteristics can help in choosing the right market segment/segments with high growth
potential.
The power distance within any society shows the acceptance of hierarchy and income
inequality. The growing inequality in many countries is altering the power structure, which has
serious implications for international business organizations. Vietnam scores low equality can
create social hierarchies in drinking preferences, with certain beers seen as more prestigious or
appropriate for higher social classes.
The advent of social media and e-commerce has encouraged online shopping behavior among
customers. The growing use of mobile phones and social networking sites must be considered
when developing marketing and communication strategies.
The Consumers’ spending patterns are influenced by their purchasing power of money.
Studying and forecasting the consumers’ purchasing power based on relevant economic
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indicators is important to analyze the customers’ interests and spending patterns. Vietnam scores
high on power distance, consumers might be more receptive to established brands or those
endorsed by trusted figures, making it challenging for new entrants or craft beers to gain traction.
The development of information and communication technologies has led to the adoption of
innovative marketing techniques to enhance collaboration with customers. The use of social
media has become common in a modern business environment.
1.4.2 Research and Development on technology and impact on cost structure/value chain
Needs to consider the investments made by competitors on a micro and macro level to
understand how new technologies influence the firm’s value chain and prevailing cost structure.
Research and development activities are highly important in an environment characterized by
creative disruption.
The adoption of new technologies has shortened the lifecycle of new product development.
Today, new products are developed quickly, and supply chain partners have also gained more
power. It pressurizes to develop new products quickly, increase product range diversity, integrate
flexibility into the value chain, and develop healthy business relationships with value chain
partners.
The beer business in Vietnam has had a long history and has seen several stages of growth,
with important turning points including:
Before the 19th century: To meet the needs of local consumers, beer was made by hand in
traditional craft villages.
19th century: With France's conquest of Vietnam, modern beer was born. The current beer
business in Vietnam began when the country's first brewery was constructed in Saigon in
1875.
20th century: The beer business was nationalized following the unification of Vietnam. To
supply beer to the domestic market, the two biggest breweries to be created are Sabeco
(Saigon) and Habeco (Hanoi).
21st century: Foreign investment was allowed and the beer sector went through a
privatization phase. Large beer companies like Heineken, Carlsberg, and AB InBev are
present in the Vietnamese market, fostering competition and the growth of the sector.
The beer market in Vietnam grew significantly. Vietnam is one of the biggest beer markets in
Southeast Asia, with beer output rising steadily from 2 billion liters in 1990 to 4 billion liters in
2010 and 5.4 billion liters in 2022. With a wide range of varieties, brands, and price points, the
beer market in Vietnam is likewise growing. Although lager is still the most widely consumed
type of beer, craft beer is steadily gaining popularity among consumers, particularly among
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young people. Furthermore, Vietnamese beer quality is rising as a result of the use of cutting-
edge technology and contemporary manufacturing methods. Numerous Vietnamese beer
companies have secured their place in the worldwide beer industry by winning accolades abroad.
3. Products Segmentation
Depending on variations in monthly income, social status, and beer preferences, the
Vietnamese beer market can be split into three categories: premium, mainstream, and saving.
Even though all of these variables may affect consumers' decisions, pricing is frequently seen as
the most crucial one.
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Brewery and wholesalers
Halida Can be and sold in cup
of high or bottle to
alcohol customers at
content. sidewalk
stands.
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4. Enterprises In The Industry: List Name, Logo, Market Share
Long-standing brand,
Bia Saigon, Mass market, wide distribution
Bia 333, Bia High-end network, diverse
Sabeco 33.9% Larue market products
Famous international
Heineken, brand, high quality,
Heineken Tiger, Bia High-end strong marketing
Việt Nam 44.4% Việt market strategy
Prestigious international
Mass market, brand, diverse products,
Carlsberg Carlsberg, High-end competitive pricing
Việt Nam 8.7% Huda, Tuborg market strategy
5.1 Revenue
Total beer industry revenue in 2023: 120,000 billion VND
Growth: 5% compared to 2022
Revenue forecast for 2024: VND 128,000 billion
5.2 Output
Beer output in 2023: 4.4 billion liters
Growth: 6.5% compared to 2022
Forecasted output in 2024: 4.7 billion liters
5.3 Revenue and output by enterprise
Enterprise Revenue 2023 (billion Growth 2023 Output 2023 (million Growth 2023
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VND) (%) liters) (%)
Heineken Việt
Nam 22.000 7% 1.200 8%
Carlsberg Việt
Nam 17.000 6% 900 7%
5.4 Analysis
Sabeco and Heineken Vietnam are the two largest beer enterprises in Vietnam, accounting for
more than 50% of the market share.
Revenue and output of Vietnam's beer industry will both grow in 2023.
Heineken Vietnam's growth rate is higher than Sabeco.
Carlsberg Vietnam is a foreign beer enterprise with the third largest market share in Vietnam.
Habeco, Bia Saigon, Bia Hue, Bia Larue, Bia 333, Sapporo Vietnam, Budweiser Vietnam are
beer businesses with smaller market shares.
5.5 Reasons for growth
Vietnamese people's demand for beer consumption is increasing.
Vietnam's economy grows steadily.
The average income per capita of Vietnamese people increased.
The appearance of many new beer brands and high-end beer products.
5.6 Challenge
Competition is fierce among beer businesses.
Input raw material prices increased.
Strict state management policies.
Covid-19 epidemic.
5.7 Forecast
Vietnam's beer industry is forecast to continue to grow in the coming years.
Competition among beer businesses will become increasingly fierce.
Beer businesses need to have appropriate strategies to take advantage of opportunities and
overcome challenges.
6. Sales Target
6.1 Target
Expected to reach 5.4 billion liters of beer by 2025: Average growth is 4-5%/year.
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Market value: Expected to reach 200,000 billion VND by 2025; average growth is
8-10%/year.
6.2 Market segment
6.2.1 Popular beer
- Occupy 70% market share.
- Objective: Maintain market share and revenue growth by improving products,
diversifying products, and strengthening marketing strategies.
6.2.2 Premium beer
- Occupy 20% market share.
- Objective: Grow market share by developing new products, improving product quality,
and building a strong brand.
6.2.3 Craft beer
- Occupy 10% market share.
- Objective: Grow market share by diversifying products, improving product quality, and
developing distribution channels.
6.3 Influencing factors
Demographic: Young population, high beer consumption demand; the middle class is
growing, preferring high-end beer.
Economy: The economy grows steadily, creating conditions for the beer industry to develop.
Compete: The beer industry is highly competitive, with many big brands.
Policy: High special consumption tax policy affects beer prices; state management policy on
beer and alcohol.
6.4 Conclude
The sales target of the Vietnamese beer industry is ambitious but completely achievable if
there is a suitable development strategy. Beer businesses need to focus on improving product
quality, diversifying products, building strong brands, and developing distribution channels to
compete in an increasingly competitive market.
Vietnam
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The average beer consumption demand per capita reaches 43 liters/year.
Comparing
Vietnam has a beer industry growth rate higher than the world average.
Vietnam's per capita beer consumption demand is lower than that of developed countries, but
higher than other countries in the region.
7.2 Compare with area
Southeast Asia:
Vietnam is the third largest beer market after Indonesia and Thailand.
Beer output in 2023 will reach 4.4 billion liters.
Average growth rate of 6%/year over the past 5 years.
Asia:
Vietnam is the 6th largest beer market after China, Japan, Korea, India and Indonesia.
Beer output in 2023 will reach 4.4 billion liters.
Average growth rate of 5%/year over the past 5 years
Comparing:
Vietnam has a higher beer industry growth rate than other countries in the region.
Vietnam's per capita beer consumption demand is higher than other countries in the region.
7.3 Recommendations
Vietnam's beer industry has higher development potential than the world and the region.
However, the beer industry also faces many challenges. Beer businesses need to have appropriate
development strategies to take advantage of potential and overcome challenges.
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PART II: POSITION OF HEINEKEN IN THE VIETNAMESE BEER INDUSTRY
Heineken's sales in Vietnam have been impacted by an economic slowdown in the country. In
the first half of 2023, the company's beer volumes in the region, including Vietnam, fell by
13.2%. Operating profit in the region also reduced by about a third. The premium beer segment
in Vietnam has been particularly affected. However, Heineken's premium brands, including
Heineken®, Heineken® 0.0, and Heineken® Silver, still managed to achieve high-teens volume
growth in Vietnam, driven by the success of Heineken® Silver. Heineken's mainstream portfolio
in Vietnam has also gained market share.
In October 2023, Heineken Vietnam announced that Heineken® is now fully brewed using
renewable energy, as part of the company's sustainability ambition of "Brewing A Better
Vietnam". The move is also a celebration of Heineken's 150th anniversary.
It's worth noting that Heineken is not the only brewer present in Vietnam. The Vietnamese
beer market is also served by local and regional breweries, as well as other global brewers. The
market is characterized by a diverse range of beer types, including both traditional and
international brands, and is influenced by demographic and economic factors, as well as
sustainability initiatives.
Heineken Vietnam reports a decline in sales volume and net revenue in the first half of 2023,
with a 5.6% year-on-year fall in total beer sales. Heineken's premium brands, including
Heineken® Silver and Tiger Crystal, managed to achieve high-teens volume growth, while
mainstream brands like Bia Viet and Bivina also performed well. The decline in sales volume is
attributed to the economic slowdown in Vietnam, particularly in major cities, and the market's
downtrading, exacerbated by Heineken products' pricing ahead of the market. The company is
taking steps to restore consumers' affordability and expects significantly improved growth in
operating profit for H2/2023.
Heineken holds the leading market position in Vietnam's beer market, which reached a retail
sales value of €11 billion ($12.07 billion) in 2022. The market volume hit 46 million hectoliters,
up 3.6% against 2021.
In terms of market share, Heineken's premium products, including Heineken Silver and Tiger,
raised its market share to 90% of the premium segment from 2016 to 2022. Meanwhile, its local
brands such as Larue, Bivina and Bia Viet more than tripled its market share from 5% to 16% in
the same period.
Heineken's top markets in Vietnam are the Central Highlands, the south-central coastal region,
the Mekong Delta and the southern region, with the brand holding over 50% of the volume share
there. In the northern and north-central coastal regions, the volume share is less than 30%.
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Heineken's latest factory in Vung Tau has an annual capacity of 11 million hectoliters, making
it the largest Asia Pacific facility. The company runs six factories across the three main regions in
Vietnam: Hanoi in the northern region; Danang and Quang Nam province in the central region,
and Ho Chi Minh city, Tien Giang province and Ba Ria-Vung Tau province in the southern
region.
Heineken plans to invest a further $500 million into Vietnam in the coming years, in addition
to the $1 billion already invested.
In 2021, Heineken held the largest portion of Vietnam’s beer market at 44.4%, followed by
Sabeco with 33.9%, Carlsberg with 8.7%, and Habeco with 7.4%. However, Heineken had
overtaken Sabeco to become the market leader with nearly 40% of the market share in 2019.
In summary, Heineken leads the Vietnamese beer market with a significant market share in
the premium and local segments. The company has a strong presence in major regions and plans
to further invest in the market. Meanwhile, other brands like Carlsberg are also growing and
gaining market share.
Brand awareness:
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Heineken is one of the most famous beer brands globally. With a rich history spanning more
than 150 years, Heineken has successfully built a strong brand identity, attracting respect and
admiration in many markets. Widespread customer awareness and trust in the Heineken brand
has fostered a vibrant community of loyal enthusiasts globally.
Market share:
Heineken, a globally renowned beer maker, holds a significant share of the market in various
regions. Its products, available in many countries, can be found in many establishments,
including bars, restaurants and retail stores.
Product quality:
Heineken has become famous for its exceptional beer quality and wide range of products,
including not only traditional beers but also special editions and non-alcoholic options. This
impressive quality and variety has played a key role in establishing consumer trust and building a
strong brand identity for Heineken.
Feedback from both customers and business partners consistently highlights Heineken's
positive reputation. The company is regularly praised for its high-quality products, exceptional
customer service and unwavering dedication to environmental protection.
Heineken continuously applies innovative and successful marketing and advertising methods,
which play an important role in enhancing brand recognition and building a distinctive and
captivating image in the hearts of consumers. Notable marketing initiatives such as the famous
“Heineken Experience” and promotional events held during sports competitions nice war"Know
the signs" translation - Social responsibility strategy to provide comprehensive information about
the limitations of drinking too much beer. Not only entertaining, Heineken's marketing strategy
also helps Raise awareness about the unintended dangers of drinking too much.TheySatisfieddo
outstanding and has contributed significantly to creating a strong brand identity in the minds of
customers.
Heineken is one of the world's leading beer brands, known for its product diversity, high
quality and effective marketing strategy. This has helped Heineken maintain its position in
the beer industry and build a strong and famous brand image.
4. SWOT analysis of Henieken
4.1 Strengths of Heineken
4.1.1 Has captured a large market share and high brand awareness
Occupying a large market share and high brand recognition, since the beginning of 2020,
Vietnam's beer industry has been double affected by Order 100 and the Covid-19 pandemic.
After years of growth, the beer industry experienced its first double-digit decline. According to
statistics from the General Statistics Office, last year's total beer output reached approximately
4.39 billion liters, down 14%. Last year, the average beer consumption per capita reached 40.5
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liters, down 7.1 liters compared to 2019. This is a significant advantage when analyzing
Heineken's SWOT model.
The current market situation is deteriorating, posing challenges for big players in the beer
industry. A special concern in the competition between Heineken and Sabeco, the two leading
beer brands in the market, is the financial situation of Heineken Vietnam Beer Beverage
Company Limited (also known as Heineken Trading), a unit responsible for distributing
Heineken products. Despite unfavorable market conditions, beer and beverage product revenue
still increased slightly, exceeding VND 55.7 trillion. Heineken Trading has continuously
achieved impressive revenue growth in previous years.
Compared to Heineken Trading, Sabeco Trading lost more than 7,000 billion VND in
revenue, earning a total of 30,167 billion VND. In addition, Sabeco's consolidated revenue
decreased by nearly 10,000 billion VND, reaching 27,961 billion VND.
After the first year of the pandemic, the revenue difference between Heineken and Sabeco
increased significantly, exceeding the 1 billion USD mark in terms of commercial revenue. This
notable difference serves as a prominent aspect in evaluating Heineken's SWOT model..
Like other countries around the world, Vietnam's Heineken beer is processed according to a
traditional recipe since 1873, using only the purest ingredients.
The first secret that makes a difference is pure ingredients. Since its inception, Heineken
brand founder Gerard Adriaan Heineken has paid great attention to the purity of ingredients,
from the water source to the quality of the barley and hops.
In addition, a small but extremely important thing is Heineken A-Yeast beer yeast, which is
the secret to creating the golden color and characteristic flavor of Heineken beer.
To maximize the quality of Heineken A-Yeast yeast, after a period of research, Mr. Gerard
Adriaan Heineken decided to ferment beer in horizontal tanks, while other brewers also use the
method of brewing beer in tanks. same time. Heineken A yeast reaches perfect pressure.
Another secret to achieving premium quality that Heineken confidently asserts is fermentation
time. A bottle of Heineken always takes longer to ferment, the forced fermentation time is 28
days. The brewing process requires a lot of patience. Heineken understands the value of this
patience to always deliver rich, harmonious, authentic beer flavor and sparkling golden color.
Heineken's secret lies in its constant innovation in product form. Heineken outperforms its
competitors thanks to many impressive packaging designs, a convenient bottle design with a
distinctive blue color and a proud red star on the logo that has been associated with Heineken for
more than 150 years.
Heineken's most impressive design that brings an enjoyable experience to consumers is the
"Mark of Perfection". The neck of the bottle is covered with a special foil label, taking the look
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of the Heineken bottle to a new level. The bottle cap is exquisitely designed with a red star and
the words "HEINEKEN QUALITY" printed on it, stimulating consumers' creativity even before
opening the bottle.
Heineken is active on social media including Twitter, Facebook and YouTube. Benicio del
Toro and Daniel Craig are two world famous figures chosen as Heineken Ambassadors.
Heineken also sponsors many different sports and events.
It is a sponsor of the Rugby World Cup and the UEFA Champions League. In 2016, it was the
official beer of the Formula 1 World Championship.
Heineken is the recipient of various awards, including the Gold Medal in Paris in 1875, the
Honorary Degree in 1883, the Prix de Paris in 1889 and the Prix de la Jury in Paris in 1900. Most
recently, in 2015, it won the Innovative Marketer of the Year award.
Meet diverse market needs: The beer market has many consumers with different preferences
and requirements. By offering a diverse product portfolio, Heineken is able to meet the diverse
needs of customers, from those who prefer traditional beers to those who want to try new beers,
unusual beers and even non-alcoholic beer.
Expand market and increase revenue: With product diversity, Heineken can penetrate many
different market segments. This helps them expand their market and attract more customers,
thereby increasing sales and revenue.
Create a competitive advantage: In a competitive market like the beer industry, having a
diverse product portfolio can help Heineken stand out and impress customers. This helps them
maintain or increase market share in a competitive environment.
Create creative opportunities: Diversifying the product portfolio also creates creative
opportunities. Heineken can test, develop new products and quickly respond to new trends or
market needs, helping the brand stay fresh and attractive to consumers.
Heineken has been around for more than 150 years and its annual financial reports clearly
show its financial strength.
Strong financial situation: Heineken has a strong financial situation, meaning that the
company has strong enough financial resources to meet business needs and operate stably. This
includes having enough cash reserves to fund day-to-day operations as well as the ability to
continue investing in long-term projects and strategies.
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Investment capacity: With this financial strength, Heineken has the ability to invest effectively
in marketing, distribution and research and development activities. This may include developing
creative advertising strategies to increase brand awareness, expanding distribution networks to
penetrate new markets, and investing in research and development to create new products, new
products and improvements to existing products.
Since Heineken mainly caters to wealthy and middle-class consumers, they tend to invest a
little more in products of superior quality. This pricing strategy was well received by beer
connoisseurs, who found the costs reasonable and within reach, helping Heineken maintain its
premium pricing position and driving increased sales.
Established in 1991, Heineken Vietnam now operates 6 breweries in Hanoi, Da Nang, Quang
Nam, Ho Chi Minh City, Vung Tau and Tien Giang and 9 commercial offices throughout
Vietnam.
Although recent adverse circumstances have been removed from consideration, the beer
industry continues to grow and progress, especially due to the increased personal income of
consumers. In addition, beer is still a widely popular alcoholic beverage, deeply ingrained in
Vietnamese culture.
Over the past decade, individual incomes have increased significantly, with impressive
increases of 30-40%. This has brought an average annual income of 4,000 USD/person.
Furthermore, Vietnam has successfully completed the United Nations Millennium Development
Goals on hunger eradication and poverty reduction, exceeding expectations by reaching this
milestone a decade earlier than expected.
While it may initially seem like population and beer have no correlation, the reality is quite
the opposite. Population growth in developing countries, such as Vietnam, offers notable
prospects for breweries. As the number of individuals increases, beer consumption also
increases, thereby creating a surge in demand for Heineken's special product lines.
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According to the World Health Organization (WHO) in Vietnam, our country ranks second
among Southeast Asian countries and third in Asia in terms of average alcohol consumption per
individual. WHO's 2018 global report shows that Vietnam ranks only behind Laos and South
Korea in terms of pure alcohol consumption in Asia. In 2016, it is estimated that the average
Vietnamese person consumed 8.3 liters of pure alcohol, equivalent to 170 liters of beer, per year
and this number is expected to increase steadily.
There is a clear shift in consumer consciousness around health and wellness, and this is
creating a new opportunity for brewers like Heineken. With more and more people choosing a
healthier lifestyle and cutting down on alcohol, Heineken can capitalize on this trend by offering
low-alcohol or no-alcohol beer products.
Low- or no-alcohol beer is not only suitable for those who want to lose weight, improve their
health or maintain a healthy lifestyle, but is also considered a safer choice for drivers or people
who do not want to experience the effects of alcohol. alcohol action. This creates a huge
potential market for Heineken and their products.
Besides, developing and promoting low-alcohol or non-alcoholic beers can also help
Heineken expand its consumer market, including those who do not like the strong flavor of
traditional beer. This could create new opportunities for Heineken to reach new customer groups
and increase sales.
In a beverage market like beer, competition between brands is inevitable. Another factor that
affects brand growth is consumer loyalty to the brand. With countless options available,
consumers often prefer to use new products that bring freshness.
Therefore, if a beer brand like Heineken wants to survive in today's fiercely competitive
market, it needs to position users well, have great advantages, and provide users with
unforgettable emotional information.
Despite difficult business conditions in 2020, Heineken Vietnam still deployed BeerBet. Two
months later, Sabeco launched Lac Bet beer in the same segment. After that, Heineken's youth
beer product line and Sabeco's Saigon Chill entered the market.
4.4.2 Tax
In Vietnam, taxation of alcoholic beverages is carried out in two stages: upon import and upon
domestic consumption. This includes three separate taxes: import duties, which range from 5% to
80% depending on the specific free trade agreement; value added tax at 10%; and special
consumption tax increased significantly from 50% to 65% in 2018.
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This affects the profits of brewers, especially brewers in the mid-range segment, because this
is a highly competitive market segment, where customers are most easily influenced by selling
prices.
Growing concerns about the health risks associated with drinking alcohol could lead to
reduced beer sales or changes in consumer preferences.
According to a report by the Ministry of Prevention and Control, alcohol currently ranks
second in the top 10 risks of causing disability and death in Vietnam, with about 40,800 alcohol-
related deaths each year. (Report September 2022). In addition, alcohol is also the biggest cause
of 30% of social unrest and 33.7% of domestic violence cases in Vietnam.
According to Article 8, Clause 8, Road Traffic Law 2008 (amended by Article 35, Clause 1
Law on Prevention and Control of Toxic Substances in Beer, Alcohol and Beer 2019), driving is
strictly prohibited. Vehicles participating in road traffic containing alcohol in the blood or breath.
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PART III: EVALUATE COMPETITORS OF FIRM
With an annual beer production of 241300000 hectolitres in 2019 and global sales of 23
billion euros in 2019, Heineken N.V. is the number one brewer in Europe and one of the largest
brewers by volume in the world.
Heineken's Dutch breweries are located in Zoeterwoude, 's-Hertogenbosch and Wijlre. The
original brewery in Amsterdam, which closed in 1988, is preserved as a museum known as the
Heineken Experience.
Since the merger between the world's two largest brewing empires, Anheuser-Busch InBev
and SABMiller, in October 2016, Heineken has become the second-largest brewer in the world.
Indirect competitors are liquor companies, private and household liquor suppliers, and other
beverage businesses such as Coca Cola, Fanta, Pepsi,... They are manufacturers that meet the
needs of customers in the beverage sector, especially while the implementation of Decree 100 is
being strictly controlled by the authorities.
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As one of heineken's direct competitors with sabeco's market share listed by MSB in 2021 is
33.9%, accounting for 1/3 of the market share of the whole beer industry in Vietnam. Sabeco's
2023 financial report shows that the group's net revenue decreased by 4,500 billion ~-13%
compared to 2022. Net revenue was lower than the previous year due to fierce competition,
reduced consumer demand due to the domestic economic slowdown along with the strict
implementation of Decree 100. Profitability was also affected by higher input and management
costs, and a lower share of interest in joint ventures and associates, although the former was
partially offset by higher financing revenues.
According to the consolidated financial statements for the years 2021, 2022 and 2023 with
profits of VND 26,300 billion (2021), VND 35,000 billion (2022), VND 30,500 billion (2023)
respectively with strong growth along with many product segments such as:
Achieved many achievements at the International Brewing Awards (IBA) in the years 2019,
2021.
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Since 2019, SABECO's Saigon Special Beer, Saigon Lager Beer and 333 Beer have
excellently won 01 championship and 03 medals at the prestigious International Beer Cup
2019.
At the International Brewing Awards (IBA), the International Smallpack Lager Competition
won the gold medal.
On 20/5/2021, Saigon Beer with Saigon Gold, Saigon Chill Beer and Saigon Lager Beer
excellently won Gold and Silver Medals respectively; Lac Viet Beer, Saigon Special Beer
and Saigon Export Beer won bronze medals. at the Australian International Brewing Awards
2021 (AIBA).
Sabeco's ambition is not only encapsulated in the market of 100 million Vietnamese people.
As Vietnam deepens its international integration with Vietnam-EU Free Trade Agreements
(EUFTA) and the Regional Comprehensive Economic Partnership (RCEP), national brands like
Sabeco need to raise their value for integration.
With 26 breweries spread across the country, 10 trading companies, distribution and sales
networks spread across the country, Sabeco is dominating the Vietnamese beer market.
During the 2022 Annual General Meeting of Shareholders, Sabeco's leadership said it would
enhance competitiveness and profitability through the launch of phase 2 of the transition.
This phase will focus on 6 main pillars including sales, brand/marketing, production, supply
chain, people and unlock. These activities are supported by the Sabeco 4.0 project and
governance initiatives.
The transformation initiatives under the Sabeco 4.0 project are a strategic initiative of this
company, aiming to transform its business model through digital technology. Officially
launched in 2020, SABECO 4.0 enables businesses to improve the way they work through
the optimization, standardization and automation of processes, starting from supply chain,
warehousing operations, sales and business intelligence systems.
As a company with a long history in Vietnam, in parallel with the changes of the country,
more than ever, SABECO is more aware of its role and responsibility to society and ready to
empower the country and people of Vietnam to experience difficulties, challenge to grow
prosperous and prosperous.
Since the outbreak of the COVID-19 pandemic in Vietnam, not only large enterprises but also
many small business households have suffered heavy losses, faced the risk of bankruptcy or
closure, and desperately needed help from the community. This has motivated SABECO and its
associates to coordinate with many agencies, departments and agencies to join hands "For a
prosperous Vietnam".
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In order to concretize its sense of social responsibility, SABECO has mobilized strength and
resources from the help of member companies in conjunction with organizations and mass
organizations in provinces and unions to implement the program for common goals and common
missions.
Along with that, SABECO also calls for cooperation from partners, customers and companies
in the same ecosystem, contributing from the source of goods, transporting and participating in
activities to serve the program, with the companionship of members, youth volunteers in
localities as well as volunteer teams from companies in the system.
One of SABECO's many meaningful programs is the event that this business cooperates with
the Central Vietnam Youth Union to implement the program "Relay Vietnam" with the goal of
empowering the country's frontline forces, who are making relentless efforts to prevent the
COVID-19 pandemic and share difficulties with households locally.
In addition, in order to launch the implementation of the Prime Minister's direction on the
program "Million safety bags" to disadvantaged households, SABECO has also donated
thousands of gift bags with a total value of up to billions of VND.
In addition, SABECO also cooperated with the Ho Chi Minh Communist Youth Union to
launch the program "Contribute Million Stars", with the goal of contributing to empowering
small business households, food and beverage industry in Ho Chi Minh City to soon recover and
stabilize in the new normal conditions, thereby spreading the spirit of "going up together" during
the pandemic.
2.2 HABECO
A rival with a long history of development is Habeco. The predecessor of the Corporation was
the Hommel Brewery built by the French in 1890. In 1935, Hommel Brewery and other
breweries in Indochina merged into Indochina Beer-Stone Company. After peace was restored, in
1957, Hommel Brewery was restored, renamed Hanoi Brewery. The first product of the factory
was born on 15/8/1958 with the name Truc Bach. Therefore, this is the first product of Hanoi
Brewery, which has been and is forever imprinted in the feelings of many generations of
workers. Promoting the tradition of creative dynamism, the company's staff is constantly
improving and improving their qualifications to help the company develop, in order to meet the
needs of consumers and has brought production capacity to increase such as: 30 million liters /
year (period 1989-1991); 50 million liters/year (period 1991 – 1995); 100 million liters / year
(period 2001-2004) and now with two plants with a capacity of more than 300 million liters /
year at the parent company alone. In addition, the Corporation has many subsidiaries and
affiliated companies in provinces and cities across the country.
In the context of supply chain disruptions due to the impact of the Covid 19 epidemic and the
Russia-Ukraine war, the energy crisis, high inflation globally, the rising foreign currency
exchange rate and complicated developments pushed up the price of raw materials
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unprecedented especially for the group of goods with imported materials (malt increased by
10%, cans increased by 40-50%, bottle caps increased by 30%, paper boxes increased by 15%,
filter powder increased by 20%, labels increased by 3-5% ...). Therefore, the procurement of key
materials in 2022 faces many difficulties and challenges. In that situation, HABECO has closely
followed the supply and demand of the raw material market, making efforts to negotiate with
suppliers to keep the price of the contract in the context of high market prices, to minimize the
increase in raw material purchase costs. With the flexibility in mobilizing supplies for input
materials, HABECO's production activities have been maintained stably, meeting market
demand.
There are social works that have a great impact on the development of the country:
HABECO has taken the lead in limiting greenhouse gas emissions such as: innovating to
using environmentally friendly technologies through the use of boilers fired with renewable fuels
(such as sawdust, wood chips, ...) to minimize the generation of greenhouse gas CO2; use
electric forklifts instead of DO oil to reduce emissions; Accompanying the "Earth Hour" events,
HABECO not only stops at the action of turning off lights and appliances using electricity for 1
hour, HABECO has many actions to respond to the campaign, from guidelines and internal
management policies to propaganda to raise awareness of employees practicing electricity
saving, environmental protection.
In 2022, HABECO has many initiatives and improvements in energy saving and energy
efficiency that have been applied and implemented with good efficiency such as:
Replace old or inefficient machinery and equipment with new machinery and equipment,
repair, upgrade and improve existing machinery and equipment for energy-saving purposes (such
as replacing insulation for cold pipes, The heat does not ensure insulation, recovers waste heat
25 | P a g e
from smoke or hot water after cooling, uses high-efficiency electric motors and installs electrical
regulators, replaces old parts that cause great energy losses)
Using almost all new lighting devices (LEDs) with high efficiency, saving electricity and
increasing the ratio of natural lighting reduces artificial lighting with electric lights
Operate and maintain appropriate equipment systems during off-peak hours, ensuring the
lowest energy use
Increase natural ventilation to reduce power consumption for fans and air conditioners,
increase insulation of walls and roofs to limit the transfer of heat radiation from the outside into
the house
Stipulate the regime of daily inspection and review of energy waste and immediately handle
loopholes if any. Streamline production, minimize idling time, turn off electrical equipment when
there are no people working. All activities are aimed at the sustainable development of
enterprises, helping to increase productivity, save raw materials, save energy, increase business
efficiency and profits, contribute to environmental protection and community benefits.
As 1 beer company in Denmark, Carlsberg as well as Heineken when both groups have their
headquarters located abroad. Carlsberg is a company operating in the alcoholic beverage
business. It was founded in 1847 by J.C. Jacobsen in Denmark, and its first office was in
Copenhagen, Denmark. Carlsberg Beer is the company's largest brand, although it also produces
the Baltika, Somersby Cider, Tuborg brands and a few local beers.
After merging with Orkla ASA, a Norwegian conglomerate, the company was ranked 6th in
the list of the world's largest brewing groups in 2001. The company spun off independently in
2004, and by 2009, Carlsberg had risen to fourth place in the world's largest brewing group.
Currently, Heineken is temporarily ranked 3rd in the world, and Carlsberg is still 4th.
Carlsberg Vietnam – Huda brand is always aware of the role and responsibility of "brewing
beer for a better present and a brighter future". Stemming from that sincere desire, from 2019,
the program "Khơi nguồn nước sạch vì miền Trung yêu thương" has been implemented to
improve the quality of life and contribute to positive impacts on the socio-economic life of local
people.
By 2023, this meaningful journey has entered its 5th year, with a total of 22 projects in Nghe
An, Ha Tinh, Quang Binh, Quang Tri and Thua Thien Hue provinces, helping nearly 33,000
people, belonging to more than 8,500 local households. The clean water flows that have been
started during the past 5 years have not only helped the people of Central Vietnam alleviate
difficulties but also brought hope for a brighter future.
Mr. Onno Rombouts, General Director of Carlsberg Vietnam shared: "Khơi nguồn nước sạch
vì miền Trung yêu thương" is one of the long-term community programs implemented annually
by Huda beer brand since 2019 to solve the shortage of clean water that still exists in many
places in Central Vietnam. The achievements of the program during the past 5 years are a great
26 | P a g e
source of motivation, helping us to continue our efforts to maintain the program's goals in the
following years."
Proud to be a son of Central Vietnam, with perseverance and efforts throughout the years,
Huda wishes to spread positive values and mark bold experiences in the 5-year milestone of a
meaningful journey through the video "Through the lens, through the 5-year journey to open
clean water".
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PART IV: CONCLUSION
Heineken is one of the most popular international beer brands in Vietnam and is known for its
high quality and modern image. Heineken products are often highly appreciated by Vietnamese
consumers for their taste and quality. Heineken accounts for a large portion of the imported beer
market in Vietnam. With an effective marketing strategy and extensive distribution network,
Heineken has built a stable and significant market share in this market. Heineken regularly
carries out creative and unique marketing campaigns in Vietnam. These campaigns not only help
increase brand awareness but also help create connections with consumers through events and
interactive activities. Heineken often sponsors major events and social activities in Vietnam,
from music performances to sports and cultural activities. This helps brands create a deep
connection with the consumer community. Heineken is considered a symbol of modern style and
class. The brand's image is often associated with an active lifestyle and the enjoyment of beer in
social and leisure settings.
With the combination of the above factors, it can be seen that Heineken's position in the
alcoholic beverage industry in Vietnam is very solid and is regularly updated to reflect changes
in market conditions and developments. changes in consumer preferences.
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PART V: REFERENCES
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