BUS417C: ISSUES IN BUSINESS PRACTICE

Section 11

Group F 103553C 103581C 103574C 103544C 103515C

Miss Vicky Au Miss Carmen Lui Miss Gillian Chiu Miss Jane Wong Mr Damon Chan

History of Heineken
1864 1968

Founded Foreign Guest in Europe Top Import in Premium Segment Begin Producing Beer within European Countries 1971 Expanding Roster of Interests 1979 Market Leader in Europe through many acquisitions Fine Tune Communication and Products e.g. English are used to weak dark ales 2007 Heineken and Carlsberg confirm their intention to make an offer for the entire issued share capital of Scottish & Newcastle plc. 2008 In January 2008, after negotiation, the S&N board recommends to their shareholders that they accept the offer of 7.8 billion. On 28th April, 2008 Scottish & Newcastle plc ceases to trade as a public company. -History of Heineken http://www.heinekeninternational.com/timeline.aspx

Model of Entry & Choice

Export 2. Licensing 3. Acquisition
1.

Model of Entry & Choice

Export
- Advantages

Relatively low financial exposure Permit gradual market entry Acquire knowledge about local market Avoid restrictions on foreign investment
- http://www.singtao.ca/financial/2008-01-

29/1201633778d793020.html - http://www.stnn.cc:82/cnstocks/200801/t20080128_721181.html

Model of Entry & Choice

Export
- Disadvantages

Vulnerability to tariffs and NTBs Logistical complexities Potential conflicts with distributors

- http://www.singtao.ca/financial/2008-01-

29/1201633778d793020.html - http://www.stnn.cc:82/cnstocks/200801/t20080128_721181. html

Model of Entry and Choice

Strategic Alliance - Advantage

Ease of Market Entry Shared Risk Shared Knowledge and Expertise Synergy and Competitive Advantage - Disadvantage Decision Making (Carlsbery 54%, Heineken 46%)
- http://www.singtao.ca/financial/2008-01-

29/1201633778d793020.html - http://www.stnn.cc:82/cnstocks/200801/t20080128_721181.html

Model of Entry and Choice

Acquisition - Advantage

Quickly gives the purchaser control over the firms factories, employees, technology, Brand names, and distribution networks - Disadvantage The purchaser assumes all liabilities of the acquired firm
- http://www.singtao.ca/financial/2008-01-

29/1201633778d793020.html - http://www.stnn.cc:82/cnstocks/200801/t20080128_721181.html

PESTAL Analysis
Political and Legal

- Tax for imported beer = Tax for local manufactured beer - New Law for alcoholic http://www.bbc.co.uk/zhongwen/trad/uk/2010/07/1007 21_lifeukbeer_pa.shtml http://www.takungpao.com.hk/news/10/01/20/YM1204081.htm

PESTAL Analysis
Economic

- Unemployment rate high (7.7% 2011 2-4 while HK around 3%)and will be an impact for Premium price of Heineken - Distribution Channel: Heinekens acquisition of parts of S&N includes businesses, licences and investments in Belgium, Finland, India, Ireland, Portugal, the UK and the US, with core brands including Fosters, Kronenbourg 1664, John Smiths, Newcastle Brown Ale, Sagres, Lapin Kulta, Maes and Beamish. http://www.bbc.co.uk/zhongwen/trad/uk/2010/07/100721_lif eukbeer_pa.shtml http://www.takungpao.com.hk/news/10/01/20/YM1204081.htm

PESTAL Analysis
Social Culture

- Used to weak dark ales and traditional UK style beer - Local Brand - Prefer Local brand, support high quality and local beer (Campaign for Real Ale, Camra) http://www.bbc.co.uk/zhongwen/trad/uk/2010/07/1007 21_lifeukbeer_pa.shtml http://www.takungpao.com.hk/news/10/01/20/YM1204081.htm

PESTAL Analysis
Technology

- S& N Technology (Strongbow) - Machinery http://www.bbc.co.uk/zhongwen/trad/uk/2010/07/1007 21_lifeukbeer_pa.shtml http://www.takungpao.com.hk/news/10/01/20/YM1204081.htm

Conclusion
Export => Strategic Alliance and Acquisition
Base on Economic and Social Cultural factor Largest market share in UK and some European

Country

Proper

Thank you