Foreign Market Entry and Diversification

Foreign Market Entry and Diversification













Identify and discuss the trends in the global beer markets.
Among the trends in the global beer market is the need for consolidation.   In the early years of brewing, beer was developed differently in every country to meet the need of that region’s tastes and unique recipes (Thompson, Strickland, & Gamble, 2010).   This soon became a problem with the many local breweries, the absence of a transportation network made exportation unmanageable.   The implementation of national consolidation was first introduced in the 19th century in the United Kingdom and the United States in which gave leeway for economies of scale.   Other countries soon followed this trend, making the national taste of that given country the determining influence for the type of beer that would reign in that region.
Another trend in the global beer markets consisted of national leaders expanding abroad.   With expansion, acquisitions and merging became very popular.   As Thompson, Strickland, & Gamble (2010) discusses, “the Belgian company Interbrew acquired breweries in 20 countries and expanded its sales to 110 countries” (p. C-251).   Acquisitions allowed the high cost of initial startup for a brewery to no longer be applicable.   Likewise, mergers were also became a growing phenomenon; consolidation led to fewer global players within the brewery industry.   For instance, in 2004, the world’s third largest brewery merged with the world’s fifth largest brewery (Thompson, Strickland, & Gamble, 2010).   In doing so, they formed InBev, which became the world’s largest brewing company in regards to volume (Strickland, Thompson, & Gamble, 2010).
As stated previously, consolidation and expansion through acquisitions and mergers became growing trends globally in the brewery industry.   This is evident with select breweries controlling most of the market share in large beer markets.   For instance, in the United States, three top breweries...