BS7114 International Business Strategy with Simulation Assignment Sample

Module code and Title: BS7114 International Business Strategy with Simulation Assignment Sample

Introduction

International business is referred to as the ability of a company to sell its products and services in different markets which is helpful for them to enhance their success in the industry (Aguilera et. al. 2019). It is necessary for companies to focus on their internationalization strategies in order to expand their services in different nations and acquire new customers which can increase their brand reach.

The current report is based on Heineken, a multinational brand which was established in 1864 by Gerard Adriaan Heineken. This report explains the microenvironment of Heineken and different factors that are an integral part of the food and beverage industry. Business strategy and competitive advantage of Heineken is also assessed with the help of this report. The opportunities and challenges which can be detected by the business in the future are also identified. On the basis of these aspects suitable recommendations are suggested for better success.

1. Microenvironment of Heineken

Heineken Is a successful beverage brand which has disrupted the food and beverage industry and attained better opportunities for its success in the business environment. The microenvironment of any organization is considered as the collaboration of different internal factors which have a direct or indirect influence on the decision-making process of the business (Aguilera and Grøgaard, 2019).

Collaboration of different internal factors which have a direct or indirect influence on the decision-making process of the business. The Porter’s five forces model is effectively used in this report for identifying the internal factors which are related with Heineken having a major impact on its market share in the industry. These forces are explained as follows:

Competitive Rivalry

The brewery industry has high competitiveness because of the more demand for the products by the customers. It is necessary for the organisations to supply appropriate quantities of beer in the market in order to increase their profitability and satisfy the needs of customers.

Some core competencies of Heineken are Imbed, Groesch, Bavaria which have captured a wider market in the global industry and have developed strong relationships with the customers.  It imposes high force on the organisation as Heineken needs to make consistent changes in their organisational strategies in order to stay relevant in the business environment and improve their performances.

Threat of substitutes

The strength of this force is moderate in the food and beverage industry as it is easy for a customer to shift towards other drinks on the basis of their preferred taste and desirable cost (Basalamah et. al. 2020). There are different brands which offer much cheaper products and services that are provided by Heineken which can increase the interest of customers towards them.

However, the organisation has developed a strong brand in the market which is familiar with the customers and allows the business to gain better advantage and increase productivity in the industry.

Threat of new entrants

This is a weak force according to Heineken due to the existence of higher levels of forms which are dealing in the bear sector of the food and beverage industry. A significant amount of investment is required by businesses to be included in establishing a new business which is not possible for every businessman. It proves as a barrier for several players which are trying to enter in the market and gain a significant market share. Thus, it increases the issues which are in front of the businesses which are trying to enter this market and develop a better market.

Bargaining power of customers

Buyers enjoy a moderate power in this industry as beer is referred to as a luxury product for them and not a necessity. Major efforts are put by the organisation to purchase their product and prove their brand to be superior in the market (Buckley, 2021). Due to the competitiveness in the market, customers have the option of purchasing the products from other suppliers and satisfy their needs. In order to restrict the customers from undertaking such practices, better changes need to be made by the organisation in their current strategies to flourish in the complex business conditions.

Bargaining power of suppliers

Suppliers have a low bargaining power in the food and beverage industry because there are many players which are present in the current market. This industry is huge and a lot of suppliers are available for the organisation which provides high quality products at desirable prices. This aspect puts the suppliers in a disadvantage where they have to make several changes in their strategies in order to persuade their clients and develop strong relationships with them to restrict them  procure their materials from them. Unless it is difficult for the suppliers to maintain their dominance in the market which has availability of so many distributors.

2. Business strategy and competitive advantage of Heineken

A business strategy is referred to as the approach which is adopted by an organisation to undertake its business practices and achieve better sustainability in the business environment. With the help of a proper strategic management, companies are able to develop a uniform structure in their business which allows their team members to achieve their business objectives in an efficient manner (Ilmudeen and Bao, 2020).

Different types of business strategies are adopted by organisations that are critical for the growth and development of their firm. Heineken has effectively selected the cost leadership strategy to be their business approach for catering to the needs of their customers.

This business strategy has been useful for the organisation to supply its cheaper and costlier beer varieties to the customers. This strategy is helpful for the organisation to provide comparatively cheaper products to their customers than their competitors (Um et. al. 2018). This develops a strong perception in the mind of the customers and motivates them to enhance their Interest in purchasing the products and services that are offered by Heineken.

This is a suitable strategy which provides the organisation with a better advantage to acquire more customers and satisfy their needs with the help of their products. They are able to attract more audiences and gain better growth and development by providing low cost products to their customers.

The competitive advantage of Heineken in the beer industry is defined as superior to its core competencies due to its extensive strategies which are utilised by the organisation. The company has a strong competitive advantage in the industry as it has expanded into different International Markets and achieved massive popularity than its competitors (Jelonek et. al. 2022).

The prices are kept relatively lower which allows the customers to make their purchase decisions effectively and enhance their overall productivity. Consistent improvement is experienced by the organisation with the help of different factors which are critical in the growth and development of the organisation. This is helpful for them to generate better insights and enhance their overall opportunities available in the market.

The main source of the competitive advantage is effective management of people, competition, planet, assets have been a major support in increasing the opportunities available with the business to grow. The employees of Heineken are carefully managed by the business organisation in order to increase their performance in the industry and generate the high quality of output.

An effort is made by the management of the company to enhance the satisfaction levels of the employees which allows them to increase their interest in the decision-making processes of the business and improve their current sustainability in the industry. The production process is effectively monitored by this business to reduce the possibility of wastage which has a negative impact on the environmental constraints (Lin et. al. 2019). By having a control on the carbon footprint which is released by the organisation in the atmosphere, better sustainability can be achieved.

It allows the organisation to develop a positive impact on the customers and increase their interest in the business practices. The competitive forces are effectively tackled by the management of Heineken with the help of strategic management and analytical decision making that provides the business with various opportunities in increasing their growth and sustainability in the industry.

The financial management of the organisation is also sound which helps the business to focus on its Assets and increase its overall control over these factors which is beneficial for the business organisation to stay ahead of its core competencies and enjoy better success in the business environment.

3. Future opportunities and challenges

There are different opportunities and challenges that can be encountered by Heineken in the next five years which can reshape its overall fortune in the food and beverage industry (Nambisan et. al. 2019). It is necessary for the organisation to properly analyse these aspects and develop effective plans in order to gain the maximum benefit while taking these future decisions. If not tackled properly, a negative impact of these factors can be experienced on the overall productivity and growth of the business in the industry. These are explained as follows:

Opportunities

Heineken has a major opportunity to expand in different new developing and developed marketplaces in order to increase the supply of their products. This will be critical for the organisation to enhance its market image among the customers and get better availability in different popular stores from which people buy their beer (Oskan, 2020). Enhancement in the variety of products can also be made by the business organisation which can be effective for them to achieve better Heights and improve their success opportunities in the industry.

Energy drinks can be included in the product portfolio of the organisation which are popular in the current markets. This product can be beneficial in increasing the overall sales of the business and the current customers are attracted towards these types of trendy products. A strategic move of the organisation to develop such products and supply it in desirable marketplaces can improve its position in the future. In this technology advanced business environment, it is important for Heineken to understand the customer matrix with the help of data science and artificial intelligence in order to satisfy the needs of their audience.

These new tools will be in major Trend in the upcoming years which will allow this organisation to maximise their reserves and achieve better Heights in the business environment.

Challenges

Conflicts with different governments due to the consumption of alcohol in their geographical location is considered as a major threat which may arise in the near future. This can have a negative impact on the overall expansion practices which are generally organised by the business to increase its overall growth (Puck and Filatotchev, 2020). A poor relationship with such countries can reduce the possibility of expanding the operations of the business in these markets.

The industry of food and beverage is consistently growing as new players are regularly joining and acquiring the customers (Ratten, 2020). This can be understood as a major challenge for Heineken as the increase in such competitors can lead towards reduction in the overall profitability of the business. They will not be able to generate better quality of output and grow in the business environment which is necessary for them to enhance their overall sustainability in the industry.

4. Recommendations of Heineken

It is suggested to Heineken that appropriate analysis must be made by them on these opportunities and challenges in order to take effective decisions regarding their future growth (Rygh, 2019). On the basis of this analysis, suitable strategies can be prepared by the business management for increasing their overall productivity in achieving their business outcomes in a better manner. The recommendations are as follows:

An effort must be made by the business organisation to effectively use the popular digital marketing strategies which are helpful in the promotion of their products. It will allow the customers to take interest in their business practices and enhance their satisfaction levels which have a significant influence on the overall development of the organisation (Tien, 2019). It is necessary for the business to grow and generate better quality of output for increasing their success in the business environment.

This will be helpful for the business to enhance their future opportunities and connect with more customers which are available in the farther markets (Saleh and Saheli, 2018). By providing them with attractive and informative content, better impact can be created on the psychological levels of the customers through which great competitive advantage can be achieved by the organisation. This can be a necessary practice which can allow the business to grow and achieve better sustainability in the industry.

Also, an effort must be made by the business to strengthen its relationship with different countries that can be a potential target market for Heineken. This will be crucial for the business to enhance its expansion opportunities and generate higher quality of output in the industry. Major changes can be made by the organisation in its growth and development which is a significant part of its relevance in the market (Sharma et. al. 2020).

A proper management of relationship can reduce the possible threats of negligence from these countries as a comparatively better advantage will be available with the business organisation to position itself in such markets. This is considered as an effective practice which must be followed by Heineken to achieve better heights in the business environment.

Focusing on innovation is considered as an ultimate solution for the different problems that arise among the business. It may allow them to in hence their business opportunities and satisfy the needs of their customers (Titova et. al. 2019). The product portfolio of Heineken can be effectively improved by consistently focusing on Innovation and change in their business environment. Positive results can be achieved by the business with the help of these factors that are considered as critical for them to grow and sustain in the industry. This will allow the business to understand the needs of their customers and make significant changes in the strategy on the basis of their requirement.

Conclusion

It has been summarised from the above report that Heineken is a popular Brewing company which has gained significant market share in the food and beverage industry. However there are certain factors which impose a strong influence on its competitive advantage in the business environment. Effective strategies are adopted by the business to mitigate such possibilities and improve their current position in the market. The cost leadership business strategy is effectively used by Heineken to provide their customers with most affordable products which will be helpful in satisfying their needs.

This is an effective strategy that allows the business with an opportunity to gain the interest of their customers in the industry. Different opportunities and challenges are identified with the help of this report that has a significant influence on the future growth and sustainability of the business in the industry. Effective recommendations have been made on the basis of these aspects which have provided better knowledge regarding the effective management of the business in the staff conditions.

References

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