Global Branding of Stella Artois
Interbrew's centuries of experience in brewing, beer distribution and sales are all exemplified throughout their global dominance of worldwide beer consumption as presented in the case The Global Branding of Stella Artois (Beamish, Goerzen, 2012). With an exceptionally high price/Earnings ratio (P/E Ratio) indicating investor confidence in their brand, operations in 80 nations, with the top 10% of markets globally accounting for 86% of sales and 61% of volume production being generated by North America, Interbrew has a solid platform to build their future marketing, selling and product development strategies on. Despite a slow to no-growth level of performance for the global beer markets of just 1 to 2%, investor confidence continues for Interbrew and their performance over the time period of the case study, further signaling the strength of their operations and strategy execution (Marinov, Marinova, 1998). Interbrew faces the challenge of profitably growing over time however, and must decide whether to invest heavily in Eastern Europe (Hanon, 1996), which is projected to be a fast-growing market despite the political upheaval and uncertainty there (Beamish, Goerzen, 2012). The troubling performance of the company in Belgium and the difficulty in making their Canadian beers successful also has the potential to derail their long-term growth as well (Negrusa, Cosma, Dumbrava, 2007). Balancing these threats is the potentially high growth markets of Asia and throughout the Asia-Pacific region, combined with the potential of moving into wine and low calorie and health-conscious beers as well (Beamish, Goerzen, 2012). The core markets for revenue generation include the UK, USA, Canada (despite the challenges with local brands there), Mexico, Netherlands and France (Beamish, Goerzen, 2012). The potential high growth markets of Central and Eastern Europe along with South America have the greatest potential for growth according to the case (Beamish, Goerzen, 2012) yet are difficult to successfully create and run operations in according to investor analysis of the beer industry during this time period (Marinov, Marinova, 1998). Managing a global brand through unique regional and national strategies continues to be profitable for Interbrew, in large part supported by an excpeit9onal supply chain that over time has proven to be a valuable differentiator for the company across all divisions and regions (Beamish, Goerzen, 2012).
Case Analysis
Interbrew's continued success across a fragmented beer industry and its successful management of over a dozen brands during the time period of the case are held together by the company's core value proposition of delivering excellent beer and supporting its distribution network better than competitors (Marinov, Marinova, 1998). As the industry continues to consolidate and the competition becomes fiercer not just for customers, but for channel partners as well, Interbrew must choose a pre-emptive strategy to retain its global market share strategy. It is evident from the case analysis that global competition will only increase as the top three beer providers rely on their brands to further force a fragmented market (Beamish, Goerzen, 2012). With the industry dynamics being more attuned to consolidation, the strategy of creating a global brand is one that will unify the company's many other competitive strengths, galvanizing them all around a single value chain for the new brand. Compounding these aspect of the industry dynamics are the changing nature of customers as well, with the focus being more on healthy beverages over the traditional high-calorie ones of the past (Beamish, Goerzen, 2012).
Given these many constraints of the market it makes sense for Interbrew to create a global brand. Continuing to rely on a balkanized strategy of selling across many different regions and nations will eventually dissipate the company's marketing and selling budgets and time, and could lead to the global brand itself dropping in value. By choosing to create a single, unified global brand of beer, Interbrew also creates the opportunity to further support is regional and national branding strategies as well. Using a global brand to unify a disparate series of smaller product lines or brands creates the cumulative effect of strengthening the corporate brand overall (Hede, Watne, 2013). For Interbrew, this translates into a more recognized, globally powerful brand at the corporate level by choosing a global beer brand to promote. Given competitive pressures, a consolidating beer market globally and the potential for growth in Asia and throughout Eastern Europe, the decision to create and fully support a global brand is clear. Interbrew really has no choice form a global growth and continued competitive...
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