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Paul Bergmanson 2 December 2010
Transcript of Stella Artois
Questions?¿ Industry Structure Case question 1:
Does it make sense for Interbrew to develop a global brand? If yes, why Stella Artois? Case question 2:
Does it make sense to focus on cities rather than on country markets to roll out a global brand? Case question 3:
Today, Nestlé owns about 7500 brands, of which only 10 can be labeled really global brands and around 7000 are marketed in only one country. Can you explain this apparent imbalance? Market Structure Beer market Growth Markets Mature Markets North America
Australia Latin America
Central Europe Yes;
Beer markets are converging
Allows for economies of scale
Lack of competition in the premium sector
Infastructure & distribution channels in place
Risk-hedging (Market filtering)
Worlwide increase in special beer demands Why Stella Artois?
Already great success in several key markets (1998: +19.7% Net Sales)
No real global premium beer competitors
Demand for specialty beer increases worlwide It makes sense because:
Smaller financial investment required
City market serves as ''test market'' for national market
large group of potential customers in a small condensed area
Cityfolks usually more willing to try new things compared to countryfolks
Not every product has the potential to appeal to a global market.
Nestlé has a history of acquisitions, some of the brands they implicitly acquired were locally customized and catered to one national market Extra question!
Where would you place the beer industry in general? Where would you place Interbrew's Stella Artois? Thanks for your attention!
Any questions? Industry very fragmented
Great consolidation opportunities
Economies of scale exist
Highest profit margins through:
Operating in market niche
Being market leader in a segment Interbrew Thinks of the beer market as two sectors:
Fourth biggest brewer worldwide
Focused on consolidating in key markets: Belgium, Netherlands, France & Northern America
Recent performance showed huge increases in net sales (1998: +29%)