The Global Branding of Stella Artois
Case Study Analysis
Introduction
Interbrew is a privately held company headquartered in Belgium. Between 1954 and 1990 the company expanded via a series of acquisitions and mergers and grew rapidly as a result of acquisitions beginning in 1991. By 2000, the company was the world’s fourth largest brewer with an exceptionally high P/E ratio indicating high investor confidence in their brand, operating in over 80 nations, with the top 10% of markets globally accounting for 86% of sales and 61% of volume production being generated by North America, Interbrew has a solid platform to build their future marketing and product development strategies on.
Case Analysis
Interbrew earned a continued success across a fragmented beer industry and its successful management of over a dozen of brands are held together by the company’s core value proposition of delivering excellent high quality beer and supporting its network better than its competitors. One of their sourcing strategy was to select smaller number of suppliers and work with them closely as they believed innovative changes were achieved saving sums for both the parties. As the beer industry tries to consolidate and the competition becomes fiercer, Interbrew must choose strategy to retain its global market share and position. With the industry inclined more towards consolidation, the strategy of creating a global brand is one that will unify the company’s core strengths and galvanizing them all around a single value chain for the new brand. Compounding these aspects of the industry dynamics are the changing nature of the consumers, with the focus being more on healthy beverages over high-calorie traditional ones.
Interbrew sees consolidation as a prevailing feature going forward in the beer industry and to improve margins through higher volumes of premium and specialty brands. Their growth was driven by industry rationalization. Cross fertilization of best practices was one of the central component of their operations strategy. Employees also had put forward many propositions to improve the company processes.
Interbrew placed Stella Artois as their premium beer when the demand for the premium beer were on rise and they were experiencing an increase in sales volume. Interbrew began a campaign to start a chain of international pubs to help promote its premium beer in key markets such as New York and Auckland. After two years Stella Artois sales were growing exponentially in Auckland and New York. From 1992 to 1999 Stella’s sales increased its sales volume from 3.4 million hls to 6.7 million hls. Hence it’s very clear that the management’s decision to place Stella Artois as their flagship brand was the right choice. A single beer like Stella Artois has the potential to become a successful brand like Coca-Cola. This strategy, it would cut down on advertising and manufacturing costs and increases profits. Having a globally recognized beer would be very profitable in the beer industry and allow the company to focus on its core resources and capture a greater share of value by specializing on a component of the value chain. As in reading 3-2 Global Strategy, utilizing where and how to globalize is a determining factor.