The Global Forces and the European Brewing Industry

Topics: Beer, Brewing, European Union Pages: 11 (3368 words) Published: March 16, 2013
Using PESTEL analysis can help to highlight the biggest influences on the strategy of the organization, both currently and in the future.  These influences can be both positive and negative.  In addition, influences often cross the divide between the six headings; the important point is that they appear somewhere in the analysis.  The key is to identify and concentrate upon those factors or trends likely to have the biggest impact upon the future of the organization. PESTEL (Political; Economic; Social; Technological; Environmental; Legal) analysis provides a systematic technique for analyzing the business environment.  It would enable us to: Summarize the most important influences of the business environment; Evaluate the potential impact of these influences on the organization. Political

From the case study we notice the political intervention of the government that made strict prosecutions against drunken driving and the alcohol abuse through sensitization campaigns to create awareness of the effects of alcohol on our health. Other measures such as the prohibition of the sales of alcoholic drinks in public places this initiative taken by the government were one of the reasons that transformed the buying behaviour of European market that is the fall in the sales of beer in these countries. Though would be classified under the head of social analysis the government has caused in the buying behaviour. In the late nineties many restrictions were put on the brewing industries such as the use of cans in Denmark. Also in Germany local production laws like the “Reinheitsgebot” were introduced to regulate the brewing industry in this country. At that time Europe is moving towards becoming a single market with a stable political environment. Economical

The effects that the economy has on the brewing industry are that there were different patterns of industry concentration across countries because of the different economic advantages that these industries were enjoying such as cheap labour and quality raw materials at a cheaper price. During these times acquisitions, licensing and strategic alliances have all occurred as the leading brewers battle to control the market. There were a growing trend towards cross-borders mergers and acquisitions. Finally there were low growth in the consumption of beers which made the sales fall drastically in certain European countries for example the beer consumption in Germany between 2002 and 2003. The EMU has lowered interest rates hence; Spanish companies can now access the same interest rates as German companies, compared to four years ago when they paid 4.5 percentage points more in interest than German companies. This creates a level playing field for all European companies seeking access to capital. Social

The sensitisation campaign made by the government has created growing concerns about health issues and drink-driving this is one of the main reasons why the sales of beers have fallen in the European countries. There was an increasing acceptance of low alcoholic drinks that is why people switched from beer to wine to reduce the excessive alcohol consumption in pubs and clubs. The off-trade German retailers such as the Aldi and the Lidi have emphasized on the importance of supermarkets in the distribution and the growth of their own-label brand beers rather than the brewery-branded beers and in other parts of the world there was an increasing acceptance of European brands. Poland, Hungary and the Czech Republic have young populations with a desire for all things Western. Technological

From the case we are able to understand that technology had brought in efficiency and improved production. Technology had definitely helped in receiving information and had helped in various departments. However as a result of incessant research and development the manufacturing units not only were able to obtaining the economies of scale but also over...
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