BS7114 International Business Strategy with Simulation Assignment Sample
Module code and Title: BS7114 International Business Strategy with Simulation Assignment Sample
Introduction
This study focuses on the company Heineken and related questions which are needed to be addressed. Further, this study also discusses the business strategy along with its competitive advantage to analyse the strength of the company in the market. Moreover, the study also describes the issues faced by the company along with providing some recommendations for mitigation to develop the business operations.
Question 1
Porter’s Five Forces Framework
| Porter’s Forces | Strength | Justification |
| Competitive rivalry | Medium | ● Positive reputation of the company
● Better than other Brewing companies in Netherlands |
| Threat of new entrants | High | ● Many new and existing enterprises
● Provides various flavours |
| Bargaining power of suppliers | Low | ● Better relationship with the company
● Domestic and international suppliers |
| Bargaining power of buyers | High | ● Similar products available in the market
● Reasonable pricing strategy |
| Threat of substitutes | High | ● Existing companies with developed brand value
● Reasonable prices for the same products |
Table 1: Porter’s five forces (Source: Self-Created)
Analysis
The competition level is quite high in the market for this company to sustain. However, the product quality is better which helps the company to enhance its business operations in the market. Therefore, this can help the company to sustain itself in the market with the help of better relationships with the customers and stakeholders and attain a better reputation in the market (Durbić, 2021). Further, the company can face issues in the International market due to higher legal issues related to the health of the people.
Moreover, the issues related to the new entrants are quite higher and can reduce the manufacturing process in the market. This can also restrict the company to expand its business in the new market due to increased competitors in the International market (Tuan and Thapa, 2020). Therefore, the company can adopt the differentiating factor to produce unique products for the customers to gain a competitive advantage in the market. This can help the company to manage this issue effectively for the improvement of business operations.
On the other hand, the company shares a better relationship with the investors and suppliers which can help the organisation to develop in the global market. Therefore, the company has many suppliers in both national and international markets which help the company to sell its products in many markets for the attainment of higher profit margins (Crispim, 2018). Thus, this can help the company increase the sales of the products in the market for the development of revenue generation. Further, the company also shares a better relationship with the customers which provide support to increase the sales of the products in the market.
The company also provides products at an affordable price which makes the customer able to engage with the company and provide a higher profit margin in the market. However, the market is a higher competition level in the brewing industry and in every market, there is a company that has effective products in the market (Bruijl and Gerard, 2018). This is result in issues for the company to sustain the business on the market and in the expansion process. Thus, this can be mitigated with the help of advanced strategies implemented in the workplace.
Question 2
Business strategy
Heineken focus to fulfil the demands of the customers along with the effective development of the business operations in the market. The company also focuses on the innovative development of the workplace which can help the employees to enhance their ability for attaining the organisational goals in the market. Heineken is also likely to engage in the “transnational strategy” for expanding its business operations in the international market (Heineken, 2022).
The company also focuses to develop the supply chain management of company to deliver the products to every customer and increase the brand value in the market. The competitive strategy of the business has helped them to develop an approach for the development of the approaches and helping the users to develop improvement for improvement of professionalism.
Further, the company is also adopting technological transformation for the effective development of the working process to increase sales in the market. The company is also focusing to enhance the variety of the product to enter the market where alcoholic drinks are prohibited to enlarge the sales of the products and attain more customers.
Competitive advantage of Heineken
Valuable financial resources
This helps the company to develop and improve its business operations and invest the financial resources in advertisement to increase brand awareness in the market. Thus, this can also lead to an increment in sales which can provide a higher profit margin to the company to gain a competitive advantage in the Dutch market.
Therefore, the financial resources can also help the company to implement technological development for the enhancement of employee skills to increase the productivity of the company in the market (Briñez, 2020). Thus, this is quite effective for the development of the reputation in the market and it can also help the company to increase the engagement rate with the customers.
Availability of resources
The resources available can help the employees to enhance the manufacturing process which can help the company to increase sales and revenue generation from the market. Thus, this can also enhance the reputation of the company to develop in the market and attain support from the stakeholders and investors (Kenea, 2020). Therefore, the resources can also help the comapny to develop supply chain management which can develop the delivery process of the products in the market.
It can also help the employees to manage the gaps in the workplace and mitigate the issues faced by the company. The financial resources will help the company to retain their position in the global market and develop the strategy based on the market approve. The company policies have been developed according to the need of the current market and the company will be able to develop cost-effective strategy.
Differentiation:
This helps Heineken to provide unique products to the customers as compared to its competitors which supports the company to attain a competitive advantage in the market. Therefore, this can help the company to develop the manufacturing process to provide unique products and experiences to attain support from the customers in the market (Gereziher and Shiferaw, 2020). It can also help the employees to manage the gaps in the workplace and mitigate the issues faced by the company. Thus, this can be beneficial for the comapny to improve its business operations in the market with the help of unique services.
Main sources of this advantage
Superior Skills:
The advanced skills of the employees can help the company to manage the development process in the company without disrupting workflow.
Further, superior skills can also help the company to adopt the technological transformation in the workplace which can enhance the sales and manufacturing process in the market (Orel, 2019). Thus, this can also make the employees able to attain the organisational goals in the market for the competitive advantage of the company.
Therefore, this can also support the company in enhancing its relationship with the customers and fulfilling their demands to develop the profit margin in the market. The skills for improving the developmental approaches will help the society to improve their approaches and the in-service as well as before-service trainings will be provided for the improvement of the strategies.
Superior Resources:
This can help the company to improve the “R&D scales of operations” which can increase the sales of the products in the market. Further, it also needs a better expenditure on the advertisement of the products which can increase the brand value and awareness of the company in the market (Teixeira et al. 2021). This can give a competitive advantage to the company for effective development in the market. It can also provide insights related to the market behaviour which can help the employees to analyse the customer behaviour for the products manufactured.
Core Competencies:
This can help the organisation to establish awareness of its brand in the market which can help the customers to connect with the company effectively. Therefore, this can also enhance the employees’ skills to provide a better experience to the customers and gain a competitive advantage in the market (Mahdi et al. 2019). It can also provide insights related to the market behaviour which can help the employees to analyse the customer behaviour for the products manufactured.
Therefore, this can also support the company in enhancing its relationship with the customers and fulfilling their demands to develop the profit margin in the market. The analysis of the competitors will help the company to develop the comparative strategy and the approaches will help the company to improve their performance as well will assure better productivity.
Question 3
Future opportunities
Microbreweries:
Most of the pubs and restaurants in the countries have initiated to make their own beer drinks which can help the company to develop the manufacturing process and provide supply to such pubs for the increment of sales in the market.
This can help Heineken to increase productivity in the market and attain a higher profit margin to develop effectively. Therefore, this factor can help the company to gain a competitive advantage in the market which can help the employees to enhance their skills for the improvement of the business operations (Nieuwsma, 2022). This opportunity can be very beneficial for the company to enhance its reputation and awareness in the market. The analysis of the future opportunities will help the company will help them to develop the strategy and ensure the growth of the future of society. The company will be able to improve their future and increase their brand revenue.
Newer Markets:
This can provide the ability to reach more customers and increase the sales of the products in the international market. This can also help the company to attain the markets for the increment in revenue.
This can help Heineken to enhance its business operations in the market for attaining a competitive gain. This can also help the company to reach more customers and increase the production capacity of the company in the market (Weaver et al. 2019). This opportunity can be very beneficial for the company to enhance its reputation and awareness in the market.
Technological transformation:
This can enhance the ability of the employees to develop the manufacturing process and increase the availability of the product in the market. This factor can also enhance the skills of the employees which can help them to manage the issues in the market.
This can be beneficial for Heineken to improve the issues and disruptions to get a competitive advantage for the effective development of the company in the market. Therefore, this can also help the company to attain support from the customers and stakeholders due to the enhanced working process (Williams and Steriu, 2022). This can develop the reputation of the company to compete in the market effectively for sustainable development. The improvement of the technologies will help the company to increase their brand revenue and the company will be able to enhance their performances. The analysis of the technology will help the company to increase their brand revenue.
Future Challenges
Intense Competition: This can reduce the value of the company and can result in lowered sales of products in the market. This can also result in issues for the company to attain the markets for the increment in revenue.
This can create disruptions in business operations which can result in a lower profit margin for the company in the market. Therefore, the higher competition level in the market can reduce the quality of the products and disrupts the workflow of the employees in the company (Ngan and Khoi, 2021). This can provide reduced revenue generation from the market which can lead to failed business operations in the market.
Poor Margins: The poor profit margin can cause issues for the company which can provide lower resources to the company. Therefore, this can also result in a poor manufacturing process which can reduce the availability of the products in the market.
This can lower the ability of the employees to manage the disruptions which can reduce the manufacturing process in the company (Shishmanov, 2020). This can provide difficulties for the company to attain smooth business operations in the market. This can create disruptions in business operations which can result in a lower profit margin for the company in the market.
Legal Difficulties: This is one of the most crucial challenges for the company as the organisation is selling alcoholic drinks to customers. Therefore, this can restrict the company to expand its business in some countries where such drinks are prohibited or can face issues to execute business operations.
This can affect the business process in some markets which can result in the attainment of a bad reputation and a lower profit margin in the International market. Therefore, licensing is quite time-consuming and costly (Swaffield et al. 2019). This can provide difficulties for the company to attain smooth business operations in the market. This can provide reduced revenue generation from the market which can lead to failed business operations in the market.
Question 4
Recommendations
- The company can implement innovative technologies which can help the employees to enhance their ability in order to manage the workflow in the workplace. Therefore, the advancement in technologies can also help leaders to manage the disruptions in the workplace and enhance the cooperation ability among the employees to develop their ability in the company. Further, the technologies can also enhance the relationship with the stakeholders which can provide more financial investment for the company (Zhao, 2019). This can help the company to attain a competitive advantage in the market for the effective development of business operations. Therefore, technological development can also help the company to solve the issues faced by the company both internally and externally to increase its reputation in the market. This can help the company to improve its business in the market.
- The company can initiate the non-alcoholics drinks to reach every customer and enter the market where alcoholic drinks are prohibited. This can help the company to provide unique services in the market which can support the company to develop in every market and segment. Further, this initiative can also help the company to allow for the expansion of the business in every market and attain support from the customers and stakeholders for effective business operations (Dijkstra, 2021). This can also create differentiation from other companies and help to attain a competitive gain in the international market. This opportunity can be very beneficial for the company to enhance its reputation and awareness in the market.
- The company can also follow the trend and expand the sales of the drinks in pubs and restaurants. Therefore, this can help the company to stay connected with the customers and consistently increase brand awareness and value in the market. This can help the company to enhance its business operations and attain a competitive advantage to run the business in the market (Pfennings, 2020). Therefore, this can also help the company to fulfil the demands of the customers to gain support from them in order to sustain itself in the market. Therefore, following the trend with the help of social media platforms can help the employees to analyse the market and customer behaviour related to brewing products.
- The company can attain sustainable development and support the administrator for the development of the market with the help of the campaign. For example, the campaigns related to the improvement of the health of youngsters and providing awareness related to alcoholic drinks. This can help the company to attain support from the government for effective business operations (Kavouras, 2020). This can help the company to develop and enhance its reputation of the company in the International market and support from the customers. Therefore, this can also help the company to fulfil the demands of the customers to gain support from them in order to sustain itself in the market. This can help the company to improve its business in the market.
Conclusion
This study focused on the company Heineken and related questions which needed to be addressed. Further, this study also discussed the business strategy along with its competitive advantage to analyse the strength of the company in the market. Thus, the study also illustrated the environment of the company with the help of Porter’s five forces framework.
References
Bruijl, D. and Gerard, H.T., 2018. The relevance of Porter’s five forces in today’s innovative and changing business environment. Available at SSRN 3192207.
Crispim, S.M.D.S., 2018. Equity research-Heineken NV (Doctoral dissertation, Instituto Superior de Economia e Gestão).
Dijkstra, S.H., 2021. Bright Beer Cellar planning and scheduling at Heineken (Master’s thesis, University of Twente).
Durbić, F., 2021. Strategijska analiza Heineken Hrvatska doo (Doctoral dissertation, University of Rijeka. Faculty of Economics and Business).
Gereziher, B. and Shiferaw, Y., 2020. Corporate social responsibility practice of multinational companies in Ethiopia: a case study of Heineken Brewery SC. Br. J. Arts Humanit, 2(2), pp.36-55.
Heineken.com, 2022. “The HEINEKEN Company”. Available at: https://www.theheinekencompany.com/ (Accessed: December 22, 2022).
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Kenea, D.A., 2020. The Role Of Innovation Strategy In Improving Organizational Performance And Productivity: Focus On Heineken Beverage Industry, Ethiopia. Annals of the University of Craiova for Journalism, Communication and Management, 6(1), pp.31-56.
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Pfennings, S.S., 2020. Predicting HEINEKEN operators’ well-being and job performance: The role of job demands and resources and the role of job crafting.
Shishmanov, A.A., 2020. Shareholder-first Ideology vs. Stakeholder Model: A Comparative Financial Analysis of Heineken and its Rivals, 2002-2018 (Bachelor’s thesis).
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Teixeira, F., Ferreira, J.J. and Veiga, P.M., 2021. Does law as resource bring a competitive advantage to companies?. Management Research: Journal of the Iberoamerican Academy of Management.
Tuan, P.H.A. and Thapa, A., 2020. Valuation of Heineken NV: a fundamental analysis of a Dutch beer company (Master’s thesis).
Weaver, J.C., Lavery, M.R. and Heineken, S., 2019. Reflective practice: The impact of self-identified learning gaps on professional development. Journal on Empowering Teaching Excellence, 3(2), p.6.
Williams, C. and Steriu, R., 2022. MNE market entry and social investment in battle-weary countries: Evidence from Heineken. Journal of World Business, 57(4), p.101342.
Zhao, Y., 2019. How does water management affect water consumption in the brewery industry? Insights from the cases of Heineken Brewery, the Netherlands, and Zhujiang Brewery, China (Master’s thesis, University of Twente).
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