2. Transnational Strategies
at Heineken?
1 Heineken at a Glance
2 Heineken‘s Strategy
3 Integration-Responsiveness Grid
4 Leveraging all Sources of Competitive Advantage
5 Conclusion: A Truly Transnational Strategy?
Prof. Dr. Andreas M. Hartmann
Andri Hinnen
João Viana
1
3. 1 Heineken at a Glance
Founded in 1864 by Gerard Adriaan Heineken in
Amsterdam.
Third largest brewery in the world after Anheuser-Busch
InBev and SABMiller (based on revenue), Fortune 442
125 breweries in more than 70 countries
170 international, regional, local and speciality
beers around the globe
Geographical Structure:
- Western Europe
- Central and Eastern Europe,
- The Americas,
- Africa and the Middle East
- Asia-Pacific
www.heinekeninternational.com
http://markets.ft.com/tearsheets/financialsSummary.asp?s=nl%3AHEIA
http://money.cnn.com/magazines/fortune/global500/2009/snapshots/6918.html
2
4. 1 Heineken at a Glance
Founded in 1864 by Gerard Adriaan Heineken in
Amsterdam.
Third largest brewery in the world after Anheuser-Busch
InBev and SABMiller (based on revenue), Fortune 442
125 breweries in more than 70 countries
170 international, regional, local and speciality
beers around the globe
Geographical Structure:
- Western Europe Revenue: $21 bn
- Central and Eastern Europe, Profit: $0.153 bn
- The Americas,
- Africa and the Middle East
- Asia-Pacific
www.heinekeninternational.com
http://markets.ft.com/tearsheets/financialsSummary.asp?s=nl%3AHEIA
http://money.cnn.com/magazines/fortune/global500/2009/snapshots/6918.html
2
5. 2 Heineken‘s Strategy
“Our brand strategy is to build a strong portfolio that combines
the power of local and international brands and which has
Heineken at its centre. The consistent growth of our brands requires
solid creative brand management, which we coordinate
centrally. By carefully balancing our brands portfolios and
achieving optimal distribution and coverage, we aim to build and
sustain strong positions in local markets.“*
Heavy M&A activities, organic growth, efficiency, global and local
brands
*www.heinekeninternational.com
http://markets.ft.com/tearsheets/financialsSummary.asp?s=nl%3AHEIA
3
6. 2 Heineken‘s Strategy
“Our brand strategy is to build a strong portfolio that combines
the power of local and international brands and which has
Heineken at its centre. The consistent growth of our brands requires
solid creative brand management, which we coordinate
centrally. By carefully balancing our brands portfolios and
achieving optimal distribution and coverage, we aim to build and
sustain strong positions in local markets.“*
Heavy M&A activities, organic growth, efficiency, global and local
brands
= a Transnational Strategy?
*www.heinekeninternational.com
http://markets.ft.com/tearsheets/financialsSummary.asp?s=nl%3AHEIA
3
7. Integration Responsiveness Grid: Product
(Need for) Global Integration
(Need for) Local Responsiveness
Prahalad, C.K. & Doz, Y. (1987). The Multinational Mission: Balancing Local Demands and Global Vision. New York: Free Press
*FT.com (2009). Heineken: Brewer taps into local tastes (Geoff Smith). Found on www.ft.com
**The Economist (Julie 20th 2009). Idea: Globalisation. Found on www.theeconomist.com
Levitt, T., “The Globalisation of Markets”, Harvard Business Review, May–June 1983
4
8. Integration Responsiveness Grid: Product
(Need for) Global Integration
(Need for) Local Responsiveness
Prahalad, C.K. & Doz, Y. (1987). The Multinational Mission: Balancing Local Demands and Global Vision. New York: Free Press
*FT.com (2009). Heineken: Brewer taps into local tastes (Geoff Smith). Found on www.ft.com
**The Economist (Julie 20th 2009). Idea: Globalisation. Found on www.theeconomist.com
Levitt, T., “The Globalisation of Markets”, Harvard Business Review, May–June 1983
4
9. Integration Responsiveness Grid: Product
“(…)little concession to local tastes and
manufacture their goods in a few centralised
production facilities.“**
(Need for) Global Integration
(Need for) Local Responsiveness
Prahalad, C.K. & Doz, Y. (1987). The Multinational Mission: Balancing Local Demands and Global Vision. New York: Free Press
*FT.com (2009). Heineken: Brewer taps into local tastes (Geoff Smith). Found on www.ft.com
**The Economist (Julie 20th 2009). Idea: Globalisation. Found on www.theeconomist.com
Levitt, T., “The Globalisation of Markets”, Harvard Business Review, May–June 1983
4
10. Integration Responsiveness Grid: Product
(Need for) Global Integration
(Need for) Local Responsiveness
Prahalad, C.K. & Doz, Y. (1987). The Multinational Mission: Balancing Local Demands and Global Vision. New York: Free Press
*FT.com (2009). Heineken: Brewer taps into local tastes (Geoff Smith). Found on www.ft.com
**The Economist (Julie 20th 2009). Idea: Globalisation. Found on www.theeconomist.com
Levitt, T., “The Globalisation of Markets”, Harvard Business Review, May–June 1983
4
11. Integration Responsiveness Grid: Product
(Need for) Global Integration
„Heineken: Brewer taps into
local tastes“*
(Need for) Local Responsiveness
Prahalad, C.K. & Doz, Y. (1987). The Multinational Mission: Balancing Local Demands and Global Vision. New York: Free Press
*FT.com (2009). Heineken: Brewer taps into local tastes (Geoff Smith). Found on www.ft.com
**The Economist (Julie 20th 2009). Idea: Globalisation. Found on www.theeconomist.com
Levitt, T., “The Globalisation of Markets”, Harvard Business Review, May–June 1983
4
12. Integration Responsiveness Grid*: Branding
(Need for) Global Integration
(Need for) Local Responsiveness
Prahalad, C.K. & Doz, Y. (1987). The Multinational Mission: Balancing Local Demands and Global Vision. New York: Free Press
*FT.com (2009). Heineken: Brewer taps into local tastes (Geoff Smith). Found on www.ft.com
**The Economist (Julie 20th 2009). Idea: Globalisation. Found on www.theeconomist.com
Levitt, T., “The Globalisation of Markets”, Harvard Business Review, May–June 1983
5
13. Integration Responsiveness Grid*: Production
(Need for) Global Integration
(Need for) Local Responsiveness
Prahalad, C.K. & Doz, Y. (1987). The Multinational Mission: Balancing Local Demands and Global Vision. New York: Free Press
*FT.com (2009). Heineken: Brewer taps into local tastes (Geoff Smith). Found on www.ft.com
**The Economist (Julie 20th 2009). Idea: Globalisation. Found on www.theeconomist.com
Levitt, T., “The Globalisation of Markets”, Harvard Business Review, May–June 1983
6
14. 4 Leveraging all sources of comparative advantage?
Sources of Comp. Advantage
National differences Scale Economics Scope Economics.
Differences in Factors Expanding and exploiting
Efficiency Sharing of Investments
Strategic Objectives
Costs potential scale economies
Multinational Risk Diversification & Balancing Scale with
portfolio diversification
Flexibility Opportunity Seeking Flexibility
learning from cultural benefit from experience, Shared Learning, across
Learning differences learning curve Org. Compponents
Bartlett, C. A., Ghoshal, S., & Beamish, P. W. 2008. Transnational Management, 5th ed. New York: McGraw-Hill/Irwin.
*Bickerton, I. & Wiggins, J. (May 9th 2009).Change is brewing at Heineken. Found on www.financialtimes.com
www.heinekeninternational.com 7
15. 4 Leveraging all sources of comparative advantage?
Sources of Comp. Advantage
National differences Scale Economics Scope Economics.
High
est A
in the sset Turno
Indus ver
tr y!
Differences in Factors Expanding and exploiting
Efficiency Sharing of Investments
Strategic Objectives
Costs potential scale economies
Multinational Risk Diversification & Balancing Scale with
portfolio diversification
Flexibility Opportunity Seeking Flexibility
learning from cultural benefit from experience, Shared Learning, across
Learning differences learning curve Org. Compponents
Bartlett, C. A., Ghoshal, S., & Beamish, P. W. 2008. Transnational Management, 5th ed. New York: McGraw-Hill/Irwin.
*Bickerton, I. & Wiggins, J. (May 9th 2009).Change is brewing at Heineken. Found on www.financialtimes.com
www.heinekeninternational.com 7
16. 4 Leveraging all sources of comparative advantage?
Sources of Comp. Advantage
National differences Scale Economics Scope Economics.
Differences in Factors Expanding and exploiting
Efficiency Sharing of Investments
Strategic Objectives
Costs potential scale economies
Multinational Risk Diversification & Balancing Scale with
portfolio diversification
Flexibility Opportunity Seeking Flexibility
learning from cultural benefit from experience, Shared Learning, across
Learning differences learning curve Org. Compponents
Bartlett, C. A., Ghoshal, S., & Beamish, P. W. 2008. Transnational Management, 5th ed. New York: McGraw-Hill/Irwin.
*Bickerton, I. & Wiggins, J. (May 9th 2009).Change is brewing at Heineken. Found on www.financialtimes.com
www.heinekeninternational.com 7
17. 4 Leveraging all sources of comparative advantage?
Sources of Comp. Advantage
National differences Scale Economics Scope Economics.
Differences in Factors Expanding and exploiting
Efficiency Sharing of Investments
Strategic Objectives
Costs potential scale economies
Multinational Risk Diversification & Balancing Scale with
portfolio diversification
Flexibility Opportunity Seeking Flexibility
de cade as
r nt in a otspots
on he lea in the h
“It is a less manager o Italy or
r cultural
aH eineken and Rwanda.
Learning
learning from benefit from experience, Shared Learning, across
go
the Con ands."*
differences learning curve Org. Compponents
of rl
th e Nethe
Bartlett, C. A., Ghoshal, S., & Beamish, P. W. 2008. Transnational Management, 5th ed. New York: McGraw-Hill/Irwin.
*Bickerton, I. & Wiggins, J. (May 9th 2009).Change is brewing at Heineken. Found on www.financialtimes.com
www.heinekeninternational.com 7
18. 4 Leveraging all sources of comparative advantage?
Sources of Comp. Advantage
National differences Scale Economics Scope Economics.
Differences in Factors Expanding and exploiting
Efficiency Sharing of Investments
Strategic Objectives
Costs potential scale economies
Multinational Risk Diversification & Balancing Scale with
portfolio diversification
Flexibility Opportunity Seeking Flexibility
learning from cultural benefit from experience, Shared Learning, across
Learning differences learning curve Org. Compponents
Bartlett, C. A., Ghoshal, S., & Beamish, P. W. 2008. Transnational Management, 5th ed. New York: McGraw-Hill/Irwin.
*Bickerton, I. & Wiggins, J. (May 9th 2009).Change is brewing at Heineken. Found on www.financialtimes.com
www.heinekeninternational.com 7
19. 4 Leveraging all sources of comparative advantage?
Sources of Comp. Advantage
National differences Scale Economics Scope Economics.
Differences in Factors Expanding and exploiting
Efficiency Sharing of Investments
Strategic Objectives
Costs potential scale economies
Multinational Risk Diversification & Balancing Scale with
portfolio diversification
Flexibility Opportunity Seeking Flexibility
learning from cultural benefit from experience, Shared Learning, across
Learning differences learning curve Org. Compponents
Bartlett, C. A., Ghoshal, S., & Beamish, P. W. 2008. Transnational Management, 5th ed. New York: McGraw-Hill/Irwin.
*Bickerton, I. & Wiggins, J. (May 9th 2009).Change is brewing at Heineken. Found on www.financialtimes.com
www.heinekeninternational.com 7
20. 4 Leveraging all sources of comparative advantage?
Sources of Comp. Advantage
National differences Scale Economics Scope Economics.
Differences in Factors Expanding and exploiting
Efficiency Sharing of Investments
Strategic Objectives
Costs potential scale economies
Multinational Risk Diversification & Balancing Scale with
portfolio diversification
Flexibility Opportunity Seeking Flexibility
learning from cultural benefit from experience, Shared Learning, across
Learning differences learning curve Org. Compponents
Bartlett, C. A., Ghoshal, S., & Beamish, P. W. 2008. Transnational Management, 5th ed. New York: McGraw-Hill/Irwin.
*Bickerton, I. & Wiggins, J. (May 9th 2009).Change is brewing at Heineken. Found on www.financialtimes.com
www.heinekeninternational.com 7
21. 4 Leveraging all sources of comparative advantage?
Sources of Comp. Advantage
“Gr
Hei oup pu National differences Scale Economics Scope Economics.
ma neken’ rchasin
k s
and ing us scale g ensu
cost active e of fle is leve res
opp increa hedgin xibility ragedFactors
ortu
Efficiency ses g Differences in by
in c Expanding and exploiting
Sharing of Investments
nitie and to mi Costsnt
Strategic Objectives
o r potential scale economies
s fo n a
r re maxim imise i cts
duc npu
tion ise t
s.“*
Multinational Risk Diversification & Balancing Scale with
portfolio diversification
Flexibility Opportunity Seeking Flexibility
learning from cultural benefit from experience, Shared Learning, across
Learning differences learning curve Org. Compponents
Bartlett, C. A., Ghoshal, S., & Beamish, P. W. 2008. Transnational Management, 5th ed. New York: McGraw-Hill/Irwin.
*Bickerton, I. & Wiggins, J. (May 9th 2009).Change is brewing at Heineken. Found on www.financialtimes.com
www.heinekeninternational.com 7
22. 4 Leveraging all sources of comparative advantage?
Sources of Comp. Advantage
National differences Scale Economics Scope Economics.
Differences in Factors Expanding and exploiting
Efficiency Sharing of Investments
Strategic Objectives
Costs potential scale economies
Multinational Risk Diversification & Balancing Scale with
portfolio diversification
Flexibility Opportunity Seeking Flexibility
learning from cultural benefit from experience, Shared Learning, across
Learning differences learning curve Org. Compponents
Bartlett, C. A., Ghoshal, S., & Beamish, P. W. 2008. Transnational Management, 5th ed. New York: McGraw-Hill/Irwin.
*Bickerton, I. & Wiggins, J. (May 9th 2009).Change is brewing at Heineken. Found on www.financialtimes.com
www.heinekeninternational.com 7
23. 4 Leveraging all sources of comparative advantage?
Sources of Comp. Advantage
National differences Scale Economics Scope Economics.
Differences in Factors Expanding and exploiting
Efficiency Sharing of Investments
Strategic Objectives
Costs potential scale economies
Multinational Risk Diversification & Balancing Scale with
portfolio diversification
Flexibility Opportunity Seeking Flexibility
e
learning from cultural Sinc
benefit from experience, Shared Learning, across
Learning differences learning1864
curve
… Org. Compponents
Bartlett, C. A., Ghoshal, S., & Beamish, P. W. 2008. Transnational Management, 5th ed. New York: McGraw-Hill/Irwin.
*Bickerton, I. & Wiggins, J. (May 9th 2009).Change is brewing at Heineken. Found on www.financialtimes.com
www.heinekeninternational.com 7
24. 4 Leveraging all sources of comparative advantage?
Sources of Comp. Advantage
National differences Scale Economics Scope Economics.
Differences in Factors Expanding and exploiting
Efficiency Sharing of Investments
Strategic Objectives
Costs potential scale economies
Multinational Risk Diversification & Balancing Scale with
portfolio diversification
Flexibility Opportunity Seeking Flexibility
learning from cultural benefit from experience, Shared Learning, across
Learning differences learning curve Org. Compponents
Bartlett, C. A., Ghoshal, S., & Beamish, P. W. 2008. Transnational Management, 5th ed. New York: McGraw-Hill/Irwin.
*Bickerton, I. & Wiggins, J. (May 9th 2009).Change is brewing at Heineken. Found on www.financialtimes.com
www.heinekeninternational.com 7
25. 4 Leveraging all sources of comparative advantage?
√
Sources of Comp. Advantage
National differences Scale Economics Scope Economics.
Differences in Factors Expanding and exploiting
Efficiency Sharing of Investments
Strategic Objectives
Costs potential scale economies
Multinational Risk Diversification & Balancing Scale with
portfolio diversification
Flexibility Opportunity Seeking Flexibility
learning from cultural benefit from experience, Shared Learning, across
Learning differences learning curve Org. Compponents
Bartlett, C. A., Ghoshal, S., & Beamish, P. W. 2008. Transnational Management, 5th ed. New York: McGraw-Hill/Irwin.
*Bickerton, I. & Wiggins, J. (May 9th 2009).Change is brewing at Heineken. Found on www.financialtimes.com
www.heinekeninternational.com 7
26. Conclusion: A Truly Transnational Strategy?
Heineken IS developing global efficiency, flexibility,
and worldwide learning capability simultaneously!
&
Heineken HAS a dispersed, interdependent
specialised configuration of assets
EXCENTRALISATION
8
27. Sources
Prahalad, C.K. & Doz, Y. (1987). The Multinational Mission: Balancing Local Demands and Global Vision. New York: Free Press
FT.com (2009). Heineken: Brewer taps into local tastes (Geoff Smith). Found on www.ft.com
The Economist (Julie 20th 2009). Idea: Globalisation. Found on www.theeconomist.com
Levitt, T., “The Globalisation of Markets”, Harvard Business Review, May–June 1983
Bartlett, C. A., Ghoshal, S., & Beamish, P. W. 2008. Transnational Management, 5th ed. New York: McGraw-Hill/Irwin.
*Bickerton, I. & Wiggins, J. (May 9th 2009).Change is brewing at Heineken. Found on www.financialtimes.com
www.heinekeninternational.com
http://markets.ft.com/tearsheets/financialsSummary.asp?s=nl%3AHEIA
9