Case Study Description of Heineken N.V.: Buckler Non-Alcoholic Beer
Buckler Beer was Heineken's first attempt at launching a Pan-European nonalcoholic brand. The company was concerned about how to organize its efforts and how to react to local competition. Should the company drop its prices locally and risk parallel importing, or should it change the taste of the beer, which was enjoyed in all other parts of Europe? A 1993 ECCH award winner.
Swot Analysis of "Heineken N.V.: Buckler Non-Alcoholic Beer" written by Sandra Vandermerwe, James Henderson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Buckler Beer facing as an external strategic factors. Some of the topics covered in Heineken N.V.: Buckler Non-Alcoholic Beer case study are - Strategic Management Strategies, Competition and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Heineken N.V.: Buckler Non-Alcoholic Beer casestudy better are - – supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, increasing energy prices, talent flight as more people leaving formal jobs, there is backlash against globalization, there is increasing trade war between United States & China,
geopolitical disruptions, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Heineken N.V.: Buckler Non-Alcoholic Beer
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Heineken N.V.: Buckler Non-Alcoholic Beer case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Buckler Beer, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Buckler Beer operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Heineken N.V.: Buckler Non-Alcoholic Beer can be done for the following purposes –
1. Strategic planning using facts provided in Heineken N.V.: Buckler Non-Alcoholic Beer case study
2. Improving business portfolio management of Buckler Beer
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Buckler Beer
Strengths Heineken N.V.: Buckler Non-Alcoholic Beer | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Buckler Beer in Heineken N.V.: Buckler Non-Alcoholic Beer Harvard Business Review case study are -
Diverse revenue streams
– Buckler Beer is present in almost all the verticals within the industry. This has provided firm in Heineken N.V.: Buckler Non-Alcoholic Beer case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Training and development
– Buckler Beer has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Heineken N.V.: Buckler Non-Alcoholic Beer Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Sales & Marketing field
– Buckler Beer is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Buckler Beer in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Buckler Beer digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Buckler Beer has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Successful track record of launching new products
– Buckler Beer has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Buckler Beer has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Superior customer experience
– The customer experience strategy of Buckler Beer in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Sales & Marketing industry
– Heineken N.V.: Buckler Non-Alcoholic Beer firm has clearly differentiated products in the market place. This has enabled Buckler Beer to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Buckler Beer to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Buckler Beer is one of the leading recruiters in the industry. Managers in the Heineken N.V.: Buckler Non-Alcoholic Beer are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Buckler Beer
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Buckler Beer does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Buckler Beer are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Low bargaining power of suppliers
– Suppliers of Buckler Beer in the sector have low bargaining power. Heineken N.V.: Buckler Non-Alcoholic Beer has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Buckler Beer to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Buckler Beer has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses Heineken N.V.: Buckler Non-Alcoholic Beer | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Heineken N.V.: Buckler Non-Alcoholic Beer are -
High cash cycle compare to competitors
Buckler Beer has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Buckler Beer has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Heineken N.V.: Buckler Non-Alcoholic Beer, in the dynamic environment Buckler Beer has struggled to respond to the nimble upstart competition. Buckler Beer has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Heineken N.V.: Buckler Non-Alcoholic Beer, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Skills based hiring
– The stress on hiring functional specialists at Buckler Beer has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Heineken N.V.: Buckler Non-Alcoholic Beer has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Buckler Beer 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Heineken N.V.: Buckler Non-Alcoholic Beer, it seems that the employees of Buckler Beer don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Workers concerns about automation
– As automation is fast increasing in the segment, Buckler Beer needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow decision making process
– As mentioned earlier in the report, Buckler Beer has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Buckler Beer even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Aligning sales with marketing
– It come across in the case study Heineken N.V.: Buckler Non-Alcoholic Beer that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Heineken N.V.: Buckler Non-Alcoholic Beer can leverage the sales team experience to cultivate customer relationships as Buckler Beer is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Buckler Beer, firm in the HBR case study Heineken N.V.: Buckler Non-Alcoholic Beer needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Heineken N.V.: Buckler Non-Alcoholic Beer | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Heineken N.V.: Buckler Non-Alcoholic Beer are -
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Buckler Beer to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Buckler Beer can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Buckler Beer can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Better consumer reach
– The expansion of the 5G network will help Buckler Beer to increase its market reach. Buckler Beer will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Buying journey improvements
– Buckler Beer can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Heineken N.V.: Buckler Non-Alcoholic Beer suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Buckler Beer in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Buckler Beer to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Creating value in data economy
– The success of analytics program of Buckler Beer has opened avenues for new revenue streams for the organization in the industry. This can help Buckler Beer to build a more holistic ecosystem as suggested in the Heineken N.V.: Buckler Non-Alcoholic Beer case study. Buckler Beer can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Buckler Beer can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Buckler Beer can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Buckler Beer can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Buckler Beer in the consumer business. Now Buckler Beer can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Buckler Beer can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Buckler Beer can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats Heineken N.V.: Buckler Non-Alcoholic Beer External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Heineken N.V.: Buckler Non-Alcoholic Beer are -
Consumer confidence and its impact on Buckler Beer demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Buckler Beer needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Buckler Beer can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Shortening product life cycle
– it is one of the major threat that Buckler Beer is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Buckler Beer has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Buckler Beer needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High dependence on third party suppliers
– Buckler Beer high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Regulatory challenges
– Buckler Beer needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Buckler Beer business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Buckler Beer.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Buckler Beer can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Buckler Beer in the Sales & Marketing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Heineken N.V.: Buckler Non-Alcoholic Beer Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Heineken N.V.: Buckler Non-Alcoholic Beer needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Heineken N.V.: Buckler Non-Alcoholic Beer is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Heineken N.V.: Buckler Non-Alcoholic Beer is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Heineken N.V.: Buckler Non-Alcoholic Beer is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Buckler Beer needs to make to build a sustainable competitive advantage.