This 5 page paper considers this acquisition by Heineken, and considers how we may interpret this move with consideration strategic management. Included are issues such as the desire to create competitive advantage, Porters five forces model, a SWOT analysis, general strategy and diversification issues as well as resource maximization. The bibliography cites 2 sources.
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read between the lines regarding the strategy and position of Heineken. In looking at this purchase there are several issues we can discuss. Heineken is a brewing company with a
well known brand. In purchasing the ABC they are taking on a 76% stake, which is a controlling stake in Egypts only brewing company (Bickerton and Drummond, 2002). The strategy
of related diversification in a horizontal manner to gain entrance to the new markets of Africa. If we look at the existing investments in the content there is already a
share of Nigerian Breweries, with a 54% ownership (Bickerton and Drummond, 2002). If we accept that as a commercial company the main aim is to provide increased value for shareholders
we may argue that in buying this brewery the company also perceived that it may be gaining a competitive advantage with owning the only Egyptian brewery. Porter argues that competitive
advantage may be gained in two main ways, cost advantage and differentiation. Here with local operations it is possible that this company as a subsidiary may be seen as having
the cost advantage in this area as it is the only local producer, and does not have the costs of other producers with the lower transportation costs. In terms of
differentation the ability to produce the only local beer may also be seen as gaining an advantage for entrance into this market.
If we consider this purchase in terms of Porters Five Forces model it may be seen as advantageous to many of the stakeholders. ABC was already strong in its local
market, and with the 2001 purchase of the only rival El-Gouna Beverages the company was placed in a monopoly position (Bickerton and Drummond, 2002) This means that there is very