Heineken In The Market
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The main issue that comes to surface when dealing with globalization is “being able to adapt”. One could never globalize operations if the ability to adapt to other cultures is not present. That means that there is a necessity of a corporate culture which enables a organization to adapt and integrate into the culture in which there will be operated. It is clear that Heineken has such a culture.
Heineken sees itself as an integral part of the societies they are operating in. A lot of value is attached to respecting, honor and understanding the socio-political situation and the local culture they are dealing with. Not only integration in behavioral context, but also in bringing messages across to their audience and adjusting their product in the desired way is crucial. The willingness and mainly the execution of these elements are of essential importance in order to be successful overseas. Heineken has policies to analyze and support these elements.
Only the ability to adapt and integrate is not enough to become globally effective, other key elements are innovation, product identity, a healthy financial position and the ability to react to changes on the market. Heinekens strategies guided by their corporate culture implement all these mentioned elements. Their plans to meet challenges, their global recognition trough their strong brand identity which has been established in the 19th century and which still is strengthened and emphasized, their healthy financial position because of their previous success and constant investments, all these elements will play a big role in Heinekens struggle to become globally effective.
Being globally successful also depends on the international management style that is embraced by a organization. This style determines the steps a organization will follow.
In the beginning when Heineken was found their international management was based on a ethnocentric point of view. Heineken was raised to serve the needs of its hometown(Amsterdam) by trying to introduce a beer culture in Amsterdam. Later on other breweries where build in other parts of the country. This ethnocentric management style made them very product orientated which resulted in a strong brand name and a high quality product. Which resulted in success. But very soon Heinekens Chairman was looking for international recognition which started in Paris. Heineken started expanding and was looking for overseas markets. As a result of that they began brewing overseas. They also began to see the importance of advertisement and started to promote their brand instead of the product. Which resulted in a more globally orientated Heineken with a globally known brand. The previous mentioned ethnocentric management style kept changing until it looked like the management style we recognize today, and that is a geocentric management style. With five operating regions each headed by a regional president, a global product with local variations, a strong desire for profitability and emphasis on public acceptance Heineken is clearly directed trough this predisposition. The on global-integration based strategy along with the need to be global responsive (quotation: “to speed up implementation: we commit to faster decision making and execution”) confirms their geocentric approach again.
If Heineken wants to continue to expand and to become a bigger player on the global market it has to identify their strengths, weaknesses, opportunities and threats. This is a rather complex process and needs to be taken seriously in account in order to determine where you stand, what you can use to improve that position, what you should take under scrutiny in order not to fail, and where you can and should stand in the future.
Heineken is building on its brand image since the very first years it started operating. Because of that strong emphasis on their identity Heineken created a brand name which is recognized all over the world. Heineken succeeds well in bringing diversity into their brands. On many markets they sell the same core product, a green bottle filled with Heineken beer. Still they convey a different messages with this similar bottle. For example, in the US Heineken stands for a luxury product, caused by the luxurious and exclusive image European products have in the US. While in Holland a bottle of Heineken just stands for a bottle of good quality beer to enhance a community feeling.
At the time Freddy Heineken was in charge, Heineken showed a weakness. They where too conservative on the financial area which held them back where other breweries grew. Ruys handled this weakness and showed more innovation. At this very moment it is hard to identify any weaknesses of Heineken. This leads to a complex situation in which strength, threats, weaknesses and opportunities are in relation. If Heineken uses its strength to create opportunities and avoid weaknesses they can succeed in being globally successful. There are certain threats which can lead to weaknesses when NOT taking