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C A S E T E A C H I N G N O T E S
Global forces and the Western European
brewing industry
Richard Whittington
1. Introduction
The European brewing industry has, for several editions, been the chapter end case for Chapter
2, on the environment. In this edition, we have written a new case on the advertising industry for
2. Position of the case
The case focus is at the industry level, with the emphasis on environmental issues. The case
would therefore probably be used early in a strategy course. However, three companies with
3. Learning objectives
The overarching objective is to increase an understanding of environmental analysis. In
particular, students should gain understanding of:
how PESTEL factors work together in an industry;
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4. Teaching scheme
The case is short and simple, reflecting its origins as a chapter end case. It is designed more for
illustration of techniques than vigorous debate of particular options. It could be used therefore in
5. Questions for discussion
1. Assess the European brewing industry environment using PESTEL analysis.
6. Case analysis
1. Assess the European brewing industry environment using PESTEL analysis.
Here it would be helpful to ask the students to draw on wider knowledge or research (you may
have beer drinkers from many countries in your class). Depending on how extensive students
additional research and thinking are, a wide range of issues may be raised. To highlight some
for the purposes of illustration:
Political: government campaigns against drinking and driving
Economic: the rise of the Asian economies, clearly offering opportunities to European
companies such as Heineken
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2. Assess the European brewing industry using Porters Five Forces analysis.
There has traditionally been a wide variation of industry structures across Europe. The UK is
fairly competitive. Denmark, Holland, Italy, Belgium and France, on the other hand, have been
in near monopoly situations. However, with increasing exports and imports and cross-border
acquisitions, national markets are becoming less protected. An interesting issue is, at what level
to conduct industry structure analysis. If at a European level, the broad issues to consider under
each of the Five Forces are as follows:
Buyers: with more than one-fifth of beer sold through supermarkets, and increasing resort
to private-label, these buyers have become increasingly powerful (underline that buyers
Rivalry: falling demand, international entrants and over-capacity obviously increase the
scope for rivalry. However, note that sales values are rising, that innovation and branding
As ever, it is important to draw conclusions. On balance, the European brewing industry does
not seem attractive, and unlikely to become more so until brewers achieve greater leverage
against their buyers and suppliers. However, increasing industry concentration looks promising
for the brewers if they do not over-pay for their acquisitions (see Chapter 10).
3. Assess the impact of changes in the environment on each of the three companies featured in
the case.
The three companies are chosen to represent different types of player. It is useful to show this
Greene King is small in comparison to AB InBev, with just one key domestic market, in
the UK. However, domestic focus and its own pubs may be giving it a strongly defended