Posted: May 25th, 2022
global branding of Stella Artois
Porter’s 5-forces analysis of the beer industry
Bargaining power of buyers
The bargaining power of buyers is very high in the beer industry. Consumers have many choices, spanning from other alcoholic beverages to other brands of beer, including smaller labels as well as the major brands. Also, beer is not strictly a necessity. Consumers can conceivably ‘do without’ if the price is too high.
Bargaining power of suppliers
The bargaining power of suppliers is also very high in the beer industry. Beer companies are critically dependent upon obtaining specific input goods to create their brews. They need a high volume of input goods to produce their product, and they need a timely and steady supply. Good relationships with bottlers and distributors are also required to take the product to market.
Competitive rivalry is extremely high. All of the major beer brands are fighting to brand themselves as unique because of the relative homogeneity and interchangeability of many of the major brands. Smaller brewers must justify their higher prices to consumers based upon their quality and taste. It is very difficult to establish a form of branding that makes a beer ‘stand out.’ Globally, the market is even more competitive, given the dominance of favored local brands in beer-drinking countries.
Threat of substitutes
There are many substitutes of other alcoholic beverages, spanning from hard spirits to wine coolers. For casual occasions, some consumers may be satisfied with soft drinks or water as a default option.
Threat of new competitors
While it would be difficult for a company to generate a new beer to rival Budweiser or Miller very rapidly, smaller brands have arisen that offer an additional value as artisan producers. Also, more national and regional brands are ‘going global.’
Overall, the beer industry as a whole is not particularly attractive to enter. Like many food-related industries, it is intensely competitive, with high input costs, potentially unreliable suppliers and fickle customers.
Q1b. Interbrew’s desire to create a global brand does make sense, given the worldwide popularity of beer. Beer is consumed in a wide range of European countries, as well in America and Australia. Producing on an economy of scale could increase profits.
Q2c. Stella Artois is a pleasing, relatively unassuming beer with a taste that is likely to be palatable amongst a wide range of different types of beer drinkers. It is not dark or hoppy, and it has an image that can be crafted to seem either luxurious or laddish. It is thus well-suited to be the company’s flagship brand.
Q3d. The great strength of focusing on cities rather than nations in marketing beer is that quite often patterns of consumption are very different in rural vs. urban areas. While in less densely-populated areas, beer is often consumed at home, in cities it is often consumed in pubs and bars. Consumers may be more attracted to different types of promotions in urban locations. Also, given the different character of consumer tastes, the beer might be more likely to be popular in an urban, very trendy location in one country, but not in another country where beer is consumed more in rural areas. Focusing on cities allows Stella Artois to be branded as a uniquely urban brand, giving it a distinct character. The company can focus on nations where beer is often consumed in cities and target these densely-populated areas. The downside, of course, is abandoning a potentially lucrative rural or suburban market. There is also a risk of spreading resources too thinly between cities, without focusing on one or two nations for the global expansion.
Q2. U.S. analysis
Trend 1: Depending on which candidate wins the 2012 election, a greater percentage of the American public will likely have to have some form of health insurance. There will be an expanded market in this particular segment of the industry. The health insurance industry has, for obvious reasons, been opposed to a ‘single payer’ government-provided health insurance plan, but requiring consumers to buy insurance would actually be helpful for the industry.
Trend 2: The insurance industry was implicated in the credit crisis of 2008 because of its refusal to adequately screen the potential risks posed by the subprime mortgage market. “AIG while providing insurance for credit default swaps didn’t check the creditworthiness of loan/borrowers. As the subprime home loan borrowers were of low credit worthiness, the risk was high in such loans” (Sinha & Ahmad 2009: 186). Under normal circumstances in a large risk pool, a sufficiently diverse portfolio guards against potential losses but in the case of AIG, its reliance upon subprime mortgage bundles left it extremely vulnerable. This has given rise to calls for greater regulation of the industry.
Trend 1: The U.S. economy is beginning to recover, but in a rather halting fashion. Job security is still extremely low. On one hand, this might make some older Americans willing to buy life insurance to support their families. On the other hand, many people may not have the money to buy insurance — not simply life insurance, but nothing beyond the bare minimum in home, car, and other forms of insurance. Customers are likely to be very bargain-sensitive if they are worried that they may lose their jobs in the near future, or that the economy is likely to worsen. As well as a downturn in demand amongst consumers, claims tend to go up during unsteady economies from banks when lenders default on their loans and consumers, short on funds, may be more vigilant in pursuing claims (Sinha & Ahmad 2009: 186). “To generate top-line growth and widen profit margins, insurers will need to consider expanding their menu of products, services and distribution channels, while simultaneously reducing costs and improving operational efficiency” (U.S. life insurance outlook, 2011, Ernst & Young).
Trend 2: Although jobs have not rebounded, in the financial market, the prospects are far brighter. The market for financial insurance is likely to grow, although, given the still-stinging memory of the credit crisis fallout, the insurance industry must demand greater transparency of financial institutions regarding ‘bundled’ securities. “Low interest rate conditions compound these problems, challenging life and annuity insurers to generate competitive product returns” (U.S. life insurance outlook, 2011, Ernst & Young).
Trend 1: The United States is a very technologically-focused nation. Connecting through mobile technology and the Internet is essential. Any firm in the U.S. must have the capacity to leverage the Internet. Customers will want to access their insurance accounts online and over their phones in a safe and secure manner.
Trend 2: There have been a number of well-publicized disasters, such as hurricanes, which may make consumers more motivated to expand their insurance coverage. The industry can seek to capitalize upon these fears.
Q3a. What is a “strategic group,” according to Porter?
Porter defines a strategic group as a group of companies within the same industry that have similar business models. For example, they might both be bargain-oriented, low-cost sportswear firms, versus firms that purvey highly specialized niche merchandise that only sell running gear.
Q3b. Why is this concept important and how is it used in conjunction with “mobility barriers?”
Companies in different segments of the industry do not necessarily compete directly with one another, and it is very difficult for a company to enter other industry segments, unless it is extremely large, agile, and has access to a wide array of resources. There are barriers to exit and enter certain markets within an industry, not simply within and without (Carter & Porter 1977). For example, it would be very difficult for McDonald’s to sell a truly high-quality, customized burger on par with the smaller, niche burger chains such as the Shake Shack and In-And-Out. Q3c. Provide a strategic map of any industry, a rationale for the axes, and what they tell you about the structure of industry competition.
Fast food industry
Price High Starbucks
Price Low Generic Niche markets
Although the fast food industry is a relatively low-cost market, there is a wide range of prices within the industry, even between some of the major brands. In any marketplace, a product can stylize itself as either a low-cost or a high-cost item. Starbucks, with its three dollar lattes and pastries, specifically promotes itself as an ‘affordable luxury.’ Although it is not as costly as going to a gourmet independent chain, compared with coffee a consumer can make at home or purchase at a cheaper rival such as Wawa or Dunkin Donuts, Starbucks is relatively high-priced. Starbucks is also very much a ‘niche’ market in terms of fast food. It sells a limited range of food products and customers that patronize Starbucks must care about coffee to some degree. Its hot options have not been successful in most markets, and consumers come to Starbucks with the intention of drinking coffee rather than eating. It is also suitable for only a limited array of meals and light snacks.
Panera Bread offers coffee but also a wider range of soups and salads. It is less oriented to a ‘niche’ market than is Starbucks, although its prices are relatively higher, compared with most fast food restaurants that serve breakfast and dinner. It does not have comparable offerings to McDonald’s ‘dollar men’ on the low end of the spectrum, for example. McDonald’s and Wendy’s more generic fast food offerings, such as their standard array of burgers and chicken nuggets, have a larger market appeal and a relatively broad target audience. In contrast, Panera’s soups and sandwiches have more esoteric ingredients and are less ‘kid-friendly.’
Although all of these fast food restaurants are marketed towards a general audience and are designed to have mass appeal, they must still be cognizant of their target patrons. For example, an upscale mother who wants a quick bite after going to the gym might grab a Starbucks, but not go to McDonald’s. Someone who is looking for the cheapest possible lunch will not go to Starbucks, even though Starbucks is not an ‘expensive’ restaurant. The type of food the customer wants (typical fast food vs. specialty items or healthier salads and sandwiches), price point, and dining companions (children vs. adults) will all affect his or her selection.
Caves, R.E. & M.E. Porter. (1977). From entry barriers to mobility barriers: Conjectural decisions and contrived deterrence to new competition. The Quarterly Journal of Economics, 91 (2): 241-262. Retrieved: http://www.jstor.org/stable/1885416
Sinha, S.K. & Zaid Ahmad. (2009). Global financial crisis – with special reference to insurance industry. African Journal of Marketing Management, 1(8): 184-189,
US life insurance outlook. (2011). Ernst & Young. Retrieved at:
http://www.ey.com/GL/en/Industries/Financial-Services/Insurance/Global-insurance-market-trends-U.S.-life-insurance-outlook — 2011
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
There is a very low likelihood that you won’t like the paper.
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!
Place an order in 3 easy steps. Takes less than 5 mins.