Stella Artois – the global branding

1、Stella Artois the global brandingIn the 1990s, the world beer market was growing at an annual rate of one to two per cent. In 1998, beer consumption reached a total of 1.3 billion hectolitres (hls). However, there were great regional differences in both market size and growth rates. Most industry an

2、alysts split the world market for beer between growth and mature markets. The mature markets were generally considered to be North America, Western Europe and Australasia. The growth markets included Latin America, Asia, Central and Eastern Europe including Russia. There was an obvious que

3、stion that the world beer industry was relatively fragmented with the top four players accounting for only 22 per cent of global volume a relatively low figure as compared to 78 per cent in the soft drinks industry, 60 per cent in tobacco and 44 per cent in spirits. That means great opportuniti

4、es for consolidation. The driver behind industry rationalization was the need to achieve economies of scale in production, advertising and distribution. As we all know, the Interbrew - one of the largest beer companies in the world. How did it get succeed and become the global corporation? Introduct

5、ion:In 1717, when it was purchased by its master brewer, Sebastiaan Artois, the brewery changed its name to Artois. The firms expansion began when Artois acquired a major interest in the Leffe Brewery in Belgium in 1954, the Dommelsch Brewery in the Netherlands in 1968, and the Brassiere du Nord in

6、France in 1970. In 1987, when Artois and another Belgian brewery called Piedboeuf came together, the merged company was named Interbrew. The new company soon acquired other Belgian specialty beer brewers, building up the Interbrew brand portfolio with the purchase of the Hoegaarden brewery in 1989 a

7、nd the Belle-Vue Brewery in 1990.Interbrew entered into a phase of rapid growth at this time. On the way of acquisitions, The Company acquired competitive enterprises and high quality brand in the other countries to gain and sustain competitive advantages. For instance, in 1995, Interbrew completed

8、an unexpected major acquisition by purchasing Labatt, a large Canadian brewer also with international interests. Labatt had operations in the United States, for example, with the Latrobe brewery, home of the Rolling Rock brand. Labatt also held a substantial minority stake in the second largest Mexi

9、can brewer, Femsa Cervesa, which produced Dos Equis, Sol, and Tecate brands. Following this major acquisition, Interbrew went on, in 1996, to buy a brewery in the Ukraine and engaged in a joint venture in the Dominican Republic. Subsequently, breweries were added in China in 1997, Montenegro and Rus

10、sia in 1998, and another brewery in Bulgaria and one in Korea in 1999.Thus, through acquisition expenditures of US$2.5 billion in the previous four years, Interbrew had transformed itself from a simple Belgian brewery into one of the largest beer companies in the world. By 1999, the company had beco

11、me a brewer on a truly global scale that now derived more than 90 per cent of its volume from markets outside Belgium. It remained a privately held company, headquartered in Belgium, with subsidiaries and joint ventures in 23 countries across four continents. On the development of the company, there

12、 are many strategies that they had been used into the way of development, such as multinational, international, global and transnational strategies. The strategies are as follow.INTERBREW CORPORATE STRATEGYThere were three facets of Interbrews corporate strategy. They were brands, markets and operat

13、ions which were considered the “sides of the Interbrew triangle. In order to achieve the fundamental objective of increasing shareholder value, each of these aspects of corporate strategy was equally important.Operation strategy: Cross fertilization of best practices between sites was a central comp

14、onent of Interbrews operations strategy. In the companys two main markets, Belgium and Canada, each brewery monitored its performance on 10 different dimensions against its peers. As a result, the gap between the best and the worst of Interbrews operations had narrowed decisively since 1995. Employe

15、es continuously put forward suggestions for improvement. The program had resulted in significantly lower production costs; the most improvements had more to do with employee motivation than with pure technical performance by the advice to the Interbrew management. In addition, capacity utilization a

16、nd strategic sourcing had been identified as two areas of major opportunity. We can see that the Interbrew does a differentiation strategy in its operation and it get successful. For the capacity utilization, it had an important influence on the profitability. It had generated excess capacity in som

17、e mature market, and they were used more fully until local capacities were increased in the growth market. It makes full use of the process of operation. For strategic sourcing, they chose a smaller number of its best suppliers and working more closely with them, Interbrew believed that innovative c

18、hanges resulted, saving both parties considerable sums every year. In the other words, it means reducing the cost.Market strategy:The underlying objectives of Interbrews market strategy were to increase volume and to lessen its dependence on Belgium and Canada, its two traditional markets. Interbrew

19、 dichotomized its market strategy into the mature and growth market segments. For the Mature market, they just wanted to continue to build market share and to improve margins through greater efficiencies in production, distribution and marketing. At the same time, the company intended to exploit the

20、 growing trend in these markets towards premium and specialty products of which Interbrew already possessed an unrivalled portfolio. The key markets in which this strategy was being actively pursued were the United States, Canada, the United Kingdom, France, the Netherlands and Belgium. For the Grow

21、th market, based on the belief that the worlds beer markets would undergo further consolidation, Interbrews market strategy was to build significant positions in markets that had long-term volume growth potential. This goal led to a clear focus on Central and Eastern Europe and Asia, South Korea and

22、 China in particular.Brand strategy:A central piece of Interbrews traditional brand strategy had been to add to its portfolio of brands through acquisition of existing brewers, principally in growth markets. Since its goal was to have the number one or two brand in every market segment in which it o

23、perated, Interbrew concentrated on purchasing and developing strong local brands. As it moved into new territories, the companys first priority was to upgrade product quality and to improve the positioning of the acquired local core lager brands. In mature markets, it drew on the strength of the est

24、ablished brands such as Jupiler, Labatt Blue and Dommelsch. In addition, new products were launched such as Taller, a premium brand in the Ukraine, and Boomerang, an alternative malt-based drink in Canada. A second facet of the companys brand strategy was to identify certain brands, typically specia

25、lty products, and to develop them on a regional basis across a group of markets. For example, to support the regional growth of specialty beers, Interbrew established a new type of café. The Belgian Beer Café, owned and run by independent operators, created an authentic Belgian atmosphere

26、where customers sampled Interbrews Belgian specialty beers. The third facet of Interbrews brand strategy was to identify a key corporate brand and to develop it as a global product.STELLA ARTOIS AS INTERBREWS INTERNATIONAL FLAGSHIP BRANDIn 1998, Interbrews executive management committee settled on S

27、tella Artois, positioned as the premium European lager, as the companys global flagship brand. As the global campaign got under way, it became clear that the organization needed time to adapt to centralized co-ordination and control of Stella Artois brand marketing. The company made a plan of Brand

28、Positioning. It was intended that Stella Artois should be perceived as a beer with an important brewing tradition and heritage but, at the same time, also as a contemporary beer. The accent is on the emotional consequence of benefit: a positive feeling of self esteem and sophistication. Stella Artoi

29、s had achieved great success with the plan. In the United Kingdom, it became the leading premium lager beer through its licensee. Apart from the United Kingdom, the key markets for Stella Artois were France and Belgium, which together accounted for a further 31 per cent of total brand volume. Stella

30、 Artois was also produced in Interbrews own breweries in Hungary, Croatia and Romania, with very pleasing 1998 volumes of 84000 hls, 120000 hls and 60000 hls, respectively. After only three years, the market share of Stella Artois in Croatia had reached four per cent. It is a significant result. In

31、Australia and New Zealand, it also obtained considerable achievements. Particularly in New Zealand, through a “seeding approach, Interbrew and their local partner (Lion Nathan) had realized great success in the Belgian Beer Café in Auckland where the brands were showcased. After only two years

32、of support, Stella Artois volume was up to 20,000 hls, and growing at 70 per cent annually, out of a total premium segment of 400,000 hls. The evolution of the brand looked very positive as world volumes for Stella Artois continued to grow. In fact, Stella Artois volume had increased from 3.4 millio

33、n hls in 1992 to a total of 6.7 million hls in 1999, a rise of 97 per cent. Conclusion Trough realizing the Interbrew and its global branding Stella Artois, we know that Interbrew achieve sustainable competitive advantage by developing the layers of competitive advantage - Global-scale efficiency, m

34、ultinational flexibility and the ability to develop innovations and leverage knowledge on a worldwide basis. All of these are embodied in the Interbrew corporate strategy, particularly in the brand strategy. The three-step process is a very successful plan. Firstly, Interbrew concentrated on purchasing and developing strong local brands. Upgrading product quality and