Impact of Global Business Issues on Heineken Company

Table of content

Executive summary

1. Globalization and Global risk

2. Introduction
2.1 Company overview

3. Analysis on competitive environment of Heineken Beer
3.1 PESTEL analysis

4. Impact on the Global risks on Heineken
4.1 Environmental Risk factors
4.1.1 Risk Mitigation strategy by the company
4.1.2 Further recommendations on mitigating the risk
4.2 Economic risk factors
4.2.1 Risk Mitigation strategies by the company
4.2.2 Further recommendations on mitigating the risk
4.3 Technological risk factors
4.3.1 Risk mitigation strategy by the company

5. Conclusion and Recommendations

6. References

7. Appendices

Executive summary

The report will critically evaluate and assess global risk which has an impact on the Heineken Company and the analysis is based on the factors which have been published by the World Economic Forum at the Global Risk report 2021. The World economic forum has highlighted the risk which have an impact towards the global business and risk which have likelihood for effecting the organization

The report has focused on three main risks which can impact on the business process of the Heineken which is Environmental risk, Economic risk and technological risk.

Under environmental risk, climate change has been identified which can be a highly impact towards the organization since the brewery is highly using natural resources to the business.

The impact of the Covid-19 pandemic has been addressed under economic risk as is this has highly affected to the organization business in year 2020 and also for the revenue of the company. The effect of the pandemic will consist on long term risks and has been addressed accordingly

Finally the analysis have done to identified the strategic actions which companies are executed or planning to execute to mitigate these risks and researcher have provided further recommendations to carry out in the organization and the whole industry.

1. Globalization and Global risk

Globalization is can be defined as increased interconnection and interdependence of people and countries, is generally understood to include two inter related elements: the opening of international border to increasingly fast flows of goods, services, finance, people and ideas.

Globalization involves global risk .Global risk has been defined as an event that has a major negative impact in various countries and industries over 10 years of period. Every year there's report generating on expected global risks in coming years from the World Economic Forum. World Economic forum is an international institute headquartered in Geneva, Switzerland. Five global risks have been identified by the World Economic forum such as Economic, Environmental, Geopolitical, Societal, and Technological.

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(Figure 01) The 16th edition of the Global risk report issued by the World Economic Forum has identified risks which has impact and likelihood in year 2021. (Figure 02)

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According to this report WEF analysis indicates that climate action failure and infectious diseases, Livelihood crises are the top main risk that is mainly concerning during the period.

2. Introduction

2.1 Company overview

The Heineken company was founded the Gerard Adrian Heineken by the age of 22 in year 1864. This was firstly established in Amsterdam Netherland and now they have expanded the operation in 70 different countries and 167 different breweries. Heineken is a Dutch Brewing company and it was named after the founders name ‘'Heineken” Heineken is the one if the largest beer company in the world and has become most valuable premium beer brand over the years.

The company is manufacturing over 300 international, local, regional and specialty in beer ciders and one of the experts of brewing quality beer and exporting around the globe. The famous beer brand such as AmstelA , CruzcampoA, Tiger, StarA are in their product portfolio. The company is strongly involved in the global business via exporting and having breweries all over the world. Being a multinational company it presented in many part of the world. Africa, Middle East and Eastern Europe, Americas, Asia Pacific and Europe. (Theheinekencompany.com, 2015)

Heineken owns wide range of products in their product portfolio such as Heineken beer segment, International Brand segment, Flavored brands and also they have non-alcoholic beer brands. The Brand has been named as top selling beer in Europe region with $23.7 million revenue in year 2020. With over 85000 plus employees over the world. Main competitors of this griant is ABinBev, Carlsberg, Diageo and many more around the globe. (Theheinekencompany.com, 2015)

Being a global business partner and with the moto of “Brewing a Better World” Heineken has given priority for the sustainability as it is an important factor in today's world in socially and environmentally.

- Net Zero Emissions in production by year 2030
- Carbon neutral in the value chain by year 2040
- Source 100% sustainable barley and hops
- Culture diversity
- Inclusive leadership training and many more (Theheinekencompany.com, 2015)

The company was highly impacted due to the pandemic as most of the bars and pubs were closed down and the sale was drastically decreased. But as a multinational company it supported all over the world to stand from the crisis. They have done donation to the health sector, community and even was able to turn their wasted beer in to energy. But according to the CEO of the company even though the sales have been increased in the European market, it will take some time to recover from the crisis as many of the countries from different parts still suffering from the pandemic. (Heineken N.V. Annual Report 2020 Find more information online at theHEINEKENcompany.com, n.d.)

Existing in the global business company has to identify the global risk which could be a threat for the company and the after considering the risks which was encountered by the World Economic Forum researcher have identified three risks which have effect to the organization and the strategies which organization has executed to manage the risks. Researcher also has provided further recommendations in order to mitigate the risks.

- Enviorenmental risks
- Economic risks
- Technological risks

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