Operation of any business, especially a multinational one, requires thorough planning and strategizing. Policies picked by the company for any local market depend highly on different factors, and consideration of them all is vital for the successful outcome. In the framework of this paper, Heineken’s business strategy on multiple levels will be discussed, including the models, diversification programs, and how these all fit with the general goals of the company.
According to the official website, Heineken’s primary focus is growth through innovation, operational excellence and sustainability (Heineken). The company continuously expands the product line to meet the demands of consumers and market trends. For instance, it is now extending the cider line, as people are looking for more flavours and alternatives to traditional drinks (Heineken). Besides, Heineken develops regional and local brands, recognizing the importance of consumers’ preferences there (Heineken). While the elaboration of the product line represents the product level of the overall strategy, other levels should be considered (Buckley and Ghauri 21). Still, it is essential to note that all these levels are interconnected.
All business strategies are aimed at achieving goals of creating value and winning over competition (Buckley and Ghauri 20). There are two basic ways for a firm to formulate its strategy: selling at a price that provides more value to the customers or differentiating their product from the competitors’ (Buckley and Ghauri 27). Heineken opts for the second alternative, meaning that its products are perceived by the customers as the ones of better quality. Corporate strategy is usually developed by the head offices, with other divisions taking care of its other aspects (Buckley and Ghauri 30).
Heineken’s international strategy can be characterized as partially centralized. Its core competencies lie within the head office’s strategic choices, that define the main directions of product development of the company (Buckley and Ghauri 36). Still, the approach, in general, is both market-driving and market-driven. Heineken aims at meeting the current trends by developing craft beer or cider segment, but also becomes one of the major brands in every market it enters, shaping the behaviour of both customers and competitors.
The company is engaged in developing a better digital presence in order to have effective B2B and B2C platforms and be closer to the consumers (Heineken). Besides, Heineken strives staying within the sustainability narrative, protecting water resources, reducing CO2 emissions and generally meeting the agenda of their Brewing a Better World strategy (Heineken).
While there are some general provisions of Heineken’s international strategy, it is worth paying attention to the specifics of the performance in local markets. Heineken considers its ability to adapt to diverse markets and develop products for the local consumer base one of its most significant competitive advantages (Heineken). For instance, in Africa, Middle East and Eastern Europe (AMEEE) Heineken created new brands based on the local preferences (Heineken). Additionally, the religious footprint on the tastes of the population in this region is considered; thus, the zero alcohol segment receives the company’s unparalleled attention (Heineken). The consumer-oriented approach around the regions Heineken operates in, appears to be one of the main factors contributing to its success.
Apart from that, Heineken does not seize to meet the current nutrition trends and expand its customer base. One of the examples is the introduction of low-calorie and low-carb beer, designed specifically for women (Mitchell). It first appeared in Australia and entailed a multi-faceted promotion strategy that meant to attract occasional beer drinkers across the big cities (Mitchell).
All in all, Heineken’s strategy on all levels is sophisticated and developed based on the experience and heritage from more than 150 years of operation. Although it is one of the world’s biggest brewing companies, it seeks innovation, constant improvement and specific approaches to its markets globally. Still, like most multinational businesses, it sometimes uses the sustainability agenda to contribute to the image of a responsible producer, which is not entirely true. Building communities and bringing innovation is a noble task that should be only approached after the thorough consideration of the agenda regarding the world’s most pressing issues.
References
Buckley, Peter, and Ghauri Pervez. International Business Strategy: Theory and Practice. Routledge, 2015.
Heineken. Heineken Company, 2020. Web.
Mitchell, Huntley. “Heineken Goes After Female Market With New Low-Carb Beer”. B&T, 2016. Web.