Stella Artois Case
1. Should Interbrew focus on the home market?
1)The international beer market is a large and growing one with consumption levels at 1.3 billion hectoliters (hls) annually. Surprisingly, the top 4 breweries account for only 22 percent of the total beer market. This means that the profit margin for these breweries is significantly smaller than that of top companies in the tobacco, soft drink, and spirits industry which are far less fragmented. With this in mind there is great potential if Interbrew were to establish a global brand that could reach outside its borders to a larger consumer base. Interbrew has already expanded into 23 countries on four continents with its various products and this could be used as a platform to expand one global brand as an ambassador for Interbrew. Although the international beer markets are fragmented there have been many analysts that have suggested that this is due to change so that beer companies could achieve economies of scale like tobacco, soft drink, and spirits companies have done. With today's world shrinking by advancements in technology, many markets are no longer as isolated as they were in the past. This means that a single beer brand has the potential to be successful globally like that of Coca-Cola or Marlboro. By shifting attention to a single brand across the world it would cut down on advertising and manufacturing costs and increase profits. In addition, the premium beer market is expanding tremendously which is where Interbrew's products are placed. Having a globally recognized beer that is produced in this growing field would be very profitable.
It makes sense for Interbrew, a simple Belgium brewery to develop a global brand in order to increase volumes, to maximize sales revenues and to lessen its dependence on Belgium and Canada, its two primary markets. As the world beer industry which was divided among four leading brewing companies accounted for only 22% of the global volume, this reflected a great
1)The international beer market is a large and growing one with consumption levels at 1.3 billion hectoliters (hls) annually. Surprisingly, the top 4 breweries account for only 22 percent of the total beer market. This means that the profit margin for these breweries is significantly smaller than that of top companies in the tobacco, soft drink, and spirits industry which are far less fragmented. With this in mind there is great potential if Interbrew were to establish a global brand that could reach outside its borders to a larger consumer base. Interbrew has already expanded into 23 countries on four continents with its various products and this could be used as a platform to expand one global brand as an ambassador for Interbrew. Although the international beer markets are fragmented there have been many analysts that have suggested that this is due to change so that beer companies could achieve economies of scale like tobacco, soft drink, and spirits companies have done. With today's world shrinking by advancements in technology, many markets are no longer as isolated as they were in the past. This means that a single beer brand has the potential to be successful globally like that of Coca-Cola or Marlboro. By shifting attention to a single brand across the world it would cut down on advertising and manufacturing costs and increase profits. In addition, the premium beer market is expanding tremendously which is where Interbrew's products are placed. Having a globally recognized beer that is produced in this growing field would be very profitable.
It makes sense for Interbrew, a simple Belgium brewery to develop a global brand in order to increase volumes, to maximize sales revenues and to lessen its dependence on Belgium and Canada, its two primary markets. As the world beer industry which was divided among four leading brewing companies accounted for only 22% of the global volume, this reflected a great