The Western European Breweries Industry

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Introduction The case outlines how the global forces have impacted on the European brewing industry. The PESTEL analysis and the Five Forces analysis have been used in assessing the individual company’s strategic decision making. Some brewing companies have concentrated on getting into other markets while others have concentrated on mergers and acquisitions. PESTEL ANALYSIS Political Factors Government restrictions and awareness campaigns have led to an increase in sales of alcohol in supermarkets. The off-trade increased from 63% in volume in 2000 to 67% in 2008.Government penalizing anyone committing a crime under the influence of alcohol, all this led td to a change in the behavior of consumers onto the European market. Economic Factors Supermarkets increased their sales volumes because of governments’ restrictions. Clubs and pubs experienced low sales of alcohol which in turn led to low taxes paid to the government. The brewing companies worked on economies of scales in order to reduce costs. Mergers and acquisitions by brewing companies as well as improving brands are strategies used by the companies to grow their market share. We also see that there are rising packaging costs which might lead to high beer prices. Social Factors Increased awareness of the effects of alcohol on health and fitness led to consumers taking less alcohol beverages. Most people are able to spend more time with their families as a result of the off-trade promotion and they are drinking at home. A lot of people may be persuaded to consume other types of beverages such as alcohol free beers to avoid weight gain and gas as well as bloating. Technological Factors The machinery used in the early 21st century and packaging methods has tremendously improved bringing in economies of scale hence more quantities made and good quality of the beer. There has been innovation in techniques

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