HI5013: Analysis of a MNC Case Study Assignment Help
Question
HI5013: This is a groupwork-based assignment for Holmes Institute Australia where the students are required to select and investigate a specific case study of an established multinational company through an in-depth analysis. By working in groups of 3-4 students, students are to demonstrate their knowledge regarding the modules and relevant readings relating to management in international businesses. The assignment should highlight the central aspects of the case study along with the significant challenges faced by the organization which should pave the way to the identification of a specific problem. Additionally, students need to propose and assess substitute ways and actions that can be taken by the MNC, followed by pointing out the best course of action through this assessment.
Solution
The solution presents a detailed case study analysis of Heineken, which is an originally Dutch-based beer brand in the USA market. Our experts have answered every aspect carefully and with much detail. To provide a clear and extensive case-study analysis, our experts have structured the report into five parts- an Introduction, a Strategic evaluation of the case, Potential challenges and issues faced by Heineken, a Strategic recommendation, and a brief Conclusion.
Introduction
The solution begins by providing a brief introduction to what this report will entail, and the purpose of writing this essay. Our experts have also provided a background of Heineken, which is the company chosen for analysis in this assignment.
MNCs in the global market face diverse challenges and risks due to changes in the market environment factors. In this context, the international strategy of the businesses plays an important role in creating competitive advantages and replicating the position of the existing brand (Collinson et al. 2020). The present report evaluates the case study of Heineken, a Dutch beer brand in the USA market. Heineken is among the second most popular beer company across the world. However, the developing markets are the key source of revenue after the European market.
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Strategic Evaluation
The next section highlights an extensive strategic evaluation of the company- Heineken. To gain important and insightful findings for the organization, our experts have done this evaluation by using three analytical tools- PESTLE analysis, Porter’s five forces, and VRIO analysis.
PESTLE analysis
The USA holds a major part of the global beer industry and steadily growing in the USA. The emergence of new brands and innovative flavours are among the potential reason behind the growth. The expected growth for 2025 is $146 billion; however, the sector accounted decline in value from $120 billion in 2019 to $98 billion in 2020. Covid-19 and USA-China trade war are two political and economic turmoil that affected the supply network and business success (Business wire, 2022) (refer to Table-1). Several studies have shown that pandemic has changed the buying behaviour and preferences of the customers. A decrease in individual income and increased health issues impacted the lifestyle affecting the food and beverage industry. Customers demand sustainable and healthy products to improve their health (Yadav et al. 2021; Croxall, 2020; Noble, 2020; Kim, 2021).
Porter’s five forces
The competitive analysis of Heineken in the USA shows high competition. Heineken holds the second position based on the global market’s value, which creates competitive strength for the company; however, it has high competition from AB InBev since it is the bestselling brand in the USA (refer to Figure-1). Apart from this, the technological advancement and high growth potential offer opportunities for new entrants. On this note, Heineken’s brand reputation and customer preference are the competitiveness of Heineken to retain its success in the USA market (Wilson, 2022; Statista, 2022).
VRIO analysis
Based on the VRIO analysis, the brand image, relation with the suppliers and presence in the 170 countries are the developed competencies of the company to create sustainable competitive advantages. Apart from this, skilled employees and investment in research and development offer temporary competitive advantages. The VRIO analysis shows the high probability of the challenges in the new future due to the continuously changing business environment and increasing competition (Heineken, 2022; BBC NEWS, 2022).
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Potential challenges and issues faced by Heineken
In this section, the specific issues faced by the company are highlighted in detail. Our experts have ensured that these challenges are supported by evidence from research of the MNC as well as the analysis done above. This section is also divided into various sub-sections-
Strategic challenges increase the company’s expenses
The market analysis shows the uncertain environment of the USA beer industry. The ongoing political, environmental and economic key challenges for the Heineken to reduce the expenses and drive success. The inflation and supply chain pressures have increased the input cost for the company (Financial Times, 2022). Supporting this, Verbeke (2013) mentioned that the country’s political climate impacts day-to-day business operations. The rules and regulations passed by the government to safeguard the interest of the domestic businesses and control the growth of MNCs increase competition and offer new growth opportunities simultaneously. On this note, organisation strategies and supply networks determine the capability of the companies to adjust to the emerging trends and introduce changes. Interpreting the present case, Heineken launched the new commitments to the environment, social responsibility and responsible consumption. The carbon neutrality ambitions to be achieved by 2030-40 become an important part Ever-Green balanced growth strategy of the Heineken. The company is on the way to making a positive impact on the world; however, striving to manage its operation efficiency. The increased prices and the demand for innovation is a major challenge for Heineken to satisfy the customers’ demand for the premium quality beer and continuously increase the sales (Lepitak, 2021).
Isolated team structure barriers to using the data for strategic decision-making
Heineken faces human-resource-related issues that create barriers for the company. The whole operation of the Heineken has been divided into different activities such as supply chain, sales and marketing; however, the lack of integration between the different departments is the potential challenge for Heineken to drive continuous innovation (BBC News 2012). On this note, Stepnov (2021) asserted that employees’ experience with the customers provides insight into the customer perception and expectations from the brand. This is also important to improve the product features and quality based on the specific demands of the customers. Apart from this, customer data are used to manage the day-to-day operation of the customer and shift the existing mass production with the customisation. However, the present lack of integration shows inconsistency with the differentiation strategy of the Heineken. In this context, Kristinae et al. (2020) mentioned that open communication and flexibility are important for retaining the skilled workforce and managing performance consistency. The awareness of the skilled workforce about the principles and standards of the company is important to offer high-quality services and retain the market position of the brand. In contrast to this, the hierarchal environment negatively affects the performance of the marketing system to some extent as the company faces positioning challenges.
Increasing competition and standing out from the competition
The competition in the market is another factor that restricts the growth of Heineken as the leader in the global beer industry. The advanced technology and resource competency of the AB InBev create the competitive disadvantages for Heineken to acquire new customers and create sustainable competitive advantages. Apart from this, the fast growth of the new brands and flavours in the market are other factors emerging as barriers to acquiring the first position in the USA market (Statista, 2022)(refer to Figure-2). On this note, Yuanet al. (2020) asserted that multiple revenue streams help the companies diversify the market risk and increase the market share.
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Strategic recommendations
This section provides certain strategies which can be used by the organization to become successful in the USA market. Our experts have taken the potential challenges as well as the strengths of the organization into account while writing this answer. These recommendations form the different sub-sections of this section:
Segment the USA market for women and middle-income customers
Taken from the above, it is recommended to segment the USA market for women and middle-income customers. The health concern of the customers can be targeted to position Heineken among the new customers and increase the sales. On this note, Dewi and Darma(2022) asserted that women customers are more influenced by emotional marketing across the world. This offers the opportunities for the companies to leverage the novel digital technology and create engaging customer customers that is important to build long-lasting 12 relationships with the customers. Interpreting with the differentiation strategy, segmenting the new group of customers will be relevant to focus on the efficient features of the products and sustain the competitive advantages. The brand image of Heineken will be relevant to target the new customers and make a significant success
Promote informed decision-making
The informed decision is important and highly required to manage the business operation of the Heineken. The skilled workforce is the key strength of Heineken; however, the lack of coordination among the differently aligned team is the point of concern for the management. On this note, it is recommended to adopt more informed strategic decision-making approaches within the organisation. The company can follow two practices: frequent meetings among the different departments and adopting the integrated digitally connected system to keep the team informed and updated about the ongoing performance of the company. In this context, frequent meetings will be important to increase the employee’s awareness of the available resources and emerging market trends (Bahoo, Alon and Paltrinieri, 2020).
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Conclusion
The last section highlights a summary of the important findings of this case study analysis. You can read half of the conclusion below:
Based on the above case analysis, it is evaluated that businesses face the challenges in retaining consistent growth in the matured market. The high growth potential of the industry offers opportunities for companies to innovate and focus on differentiation. This is because high growth potential increases the threat of new entrants that affect the customers’ buying behaviour. In this context, strategic transformation is important to retain the competitiveness and position in the existing marketplace. It is concluded that integration between the different business departments is important to reduce the cost and achieve operational efficiency
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