<div class="post">
<div class="body">
<div id="76e2299a-5e86-4629-9b18-f898646ce572" class="postBody" contenteditable="true">
<p align="justify">Heineken N.V. is a Dutch multinational company dealing in the Brewery industry producing beer and offering products in different categories. In the brewing industry, the firm was founded in 1873, and its current headquarters is allocated in Amsterdam, Netherlands. The company is one of the largest brewers in Europe and the most significant volume of brewers globally. As of 2019, the company generated an exceptional revenue of 23.89 million euros, and the company has an active employment figure of over 85,000 (Heineken, 2019). From a global perception of the brewing industry, the Porter five forces assessment would guide to sustain future plans to progress understanding of the organization&#8217;s position.</p>
<h2 align="justify">Competitive Rivalry in the Market</h2>
<p align="justify">The competitive rivalry within the brewery industry is high due to the consumer’s more considerable demand, and the supply of beer quantity is to be met. As a response, several groups and firms have taken over the industry to offer several platforms for clients to buy from, which has led to severe competition between established brands. The group&#8217;s biggest competitors are Anheuser-Busch InBev and China Resources Snow Breweries. As of 2019, Heineken is trying to lead the market among the global market share based on sales volume by 12 percent. In comparison, Anheuser-Busch InBev of the United States had the world&#8217;s largest beer market share, accounting for almost 30 percent of total beer volume sales. China Resources Breweries are in third place with 6 percent (Statista, 2020). Hence, such big names in the industry make the environment more competitive for each other in terms of operations.</p>
<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">The threat of having substitutes is considered to be moderate in the brewery industry because a consumer can easily switch from one drink to another as long as the cost and taste are associated. The ability to exchange products may severely affect a company&#8217;s profitability. The differentiating factor of a vast selection of substitutes makes it easier for consumers to change from well-established breweries. Furthermore, some replacements are less costly than the brewer’s low-cost items &; services. There is a higher chance of substitute preference in smaller, local stores compared to large stores or supermarkets based on the cost cover for both the market and the company. (Pantano et al., 2017). Therefore, the risk of substitutes in the brewery sector is moderate.</p>
<h2 align="justify">The Threat of New Entrants</h2>
<p align="justify">The threat of having new entrants in the brewery industry is considered to be low due to the bigger level of firms in the beer sector existing and enjoying a significant ratio of industry’s high profit. The beer business faces high expensive factory-based start-up that focuses on quality, cost and legal matters. This also becomes a barrier in the entry into the market as a result of high prices. However, if the well-established company meets the requirement in the market, then the current holding company may face challenges of losing their consumers and lower profits. Through loyalty, existing companies are thus countering the dangers to new entrants (Dun and Kregor, 2017), by developing brand image and economies of scale. Hence, making less room for new entrants.</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">The Bargaining power of customers in the brewery industry&#8217;s perspective is moderate because the context of beer or cider is considered to be a luxury rather than a necessity. Furthermore, they would need to consider how to persuade customers to buy their product and keep the quality of the brand due to the chance of switching to others. Customers like pubs, discos and casinos are aware of their developed taste for beer and cider; hence the need and requirement can become challenging. The end user can easily switch from one product to another by simply going to a shop or bar and purchasing other brand. (Calvo-Porral, 2019). Therefore, in the context of the brewing industry, consumers have moderate power.</p>
<h2 align="justify">Bargaining Power of Suppliers</h2>
<p align="justify">The Bargaining power of suppliers in the brewery industry is considered to be low due to the availability of majority of suppliers in the market. These Firms normally require brewery equipment, cans, bottles and the packaging material. Switching from one brewer to another is generally simple for brewers since these goods are specified in the majority of cases, resulting in minimal switching costs. In addition, big brewery firms are majorly bulk buyers and are capable into controlling the bargaining authority for suppliers by focusing on buying in bulk of raw material in bottling, labeling, and distribution (Cunha et al, 2018). Thus, supplier power of bargaining in context to the brewery industry is considered to be low.</p>
<h2>References</h2>
<p>Calvo-Porral, C., 2019. Profiling Beer Consumers for Brewery Management. In Production and Management of Beverages (pp. 303-333). Woodhead Publishing.<br />
Cunha, A.L., Santos, M.O., Morabito, R. and Barbosa-Póvoa, A., 2018. An integrated approach for production lot sizing and raw material purchasing. European Journal of Operational Research, 269(3), pp.923-938.<br />
Dunn, A. and Kregor, G., 2017. Tourism as a business strategy for growth in Oregon and Washington craft breweries. In Craft Beverages and Tourism, Volume 1 (pp. 105-118). Palgrave Macmillan, Cham.<br />
Heineken, 2019. Annual report. [online] Theheinekencompany.com. Available at: https://www.theheinekencompany.com/sites/theheinekencompany/files/Investors/financial-information/results-reports-presentations/heineken-nv-hnv-2019-annual-report.pdf.<br />
Statista, 2020. Global beer industry market share | Statista. [online] Statista. Available at: https://www.statista.com/statistics/257677/global-market-share-of-the-leading-beer-companies-based-on-sales/.</p>
</div>
</div>
</div>