Tourism & Hospitality Strategic Management Assignment

HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES -
INFORMATION TECHNOLOGY
DEPARTMENT OF TOURISM AND HOSPITALITY
STRATEGIC MANAGEMENT
Group members:
1. Đàm Lê Quỳnh Giao

CONTENTS
Introduction ........................................................................................................................ 1
1. Old Vision Statement ................................................................................................... 3
2. Revised Vision Statement ............................................................................................ 3
3. Old Mission Statement ................................................................................................ 3
4. Proposed Mission Statement ....................................................................................... 4
5. External Factor Evaluation Matrix (EFE Matrix, EFEM) ..................................... 4
6. The Competitive ........................................................................................................... 6
6.1. The competitors ...................................................................................................... 6
6.1.1. AB InBev ...................................................................................................... 6
6.1.1. ThaiBev ......................................................................................................... 6
6.2. Competitive Profile Matrix (CPM) ......................................................................... 7
7. Financial statement ...................................................................................................... 8
7.1. Income Statement .................................................................................................... 8
7.2. Balance sheet .......................................................................................................... 8
8. Historical ratios ............................................................................................................ 9
9. Internal Factor Evaluation Matrix (IFE Matrix, IFEM) ...................................... 10
10. Strategy analysis ........................................................................................................ 12
10.1. Strength-Weakness-Opportunities-Threats Matrix (SWOT) ............................ 12
10.2. Internal-External Matrix (IE) ............................................................................ 14
10.2.1. Internal-External Matrix by region ............................................................. 14
10.3. Quantitative Strategic Planning Matrix (QSPM) .............................................. 15
10.4. Strategy conclusion............................................................................................ 20
11. Recommendations ...................................................................................................... 21
12. Perceptual map .......................................................................................................... 22
12.1. Beer industry in Vietnam ................................................................................... 22

Introduction
• Name of company: Heineken N.V
• Industry: Beer Industry, Alcohol Beverage Industry
• Famous products:
- Heineken®
- Amstel
- Lagunitas
- Orchard Thieves
- Strongbow Apple Cider
- Tiger
• Performance highlights in 2018:
- Consolidated beer volume: 233.8 million hectoliters
- Heineken® volume: 38.7 million hectoliters
- Consolidated cider volume: reach 5.6 million hectolitres with more than 2 million
hectoliters outside the UK.
- Net revenue (beia): €22,471 million
- Operating profit (beia): €3,868 million
- Net profit (beia): €2,424 million
• History:
The Heineken company was founded in 1864 when the 22-year-old Gerard Adriaan
Heineken bought a brewery known as De Hooiberg (the haystack) in Amsterdam. In
1869 Heineken switched to the use of bottom-fermenting yeast. In 1873 the brewery's
name changed to Heineken's Bierbrouwerij Maatschappij (HBM) and opened a second
brewery in Rotterdam in 1874. In 1886 Dr. H. Elion, a pupil of the French chemist Louis
Pasteur, developed the "Heineken A-yeast" in the Heineken laboratory. This yeast is still
the key ingredient of Heineken beer.
The founder's son, Henry Pierre Heineken, managed the company from 1917 to 1940,
and continued involvement with the company until 1951. During his tenure, Heineken
developed techniques to maintain consistent beer quality during large-scale production.
Henry Pierre's son, Alfred Henry "Freddy" Heineken, started working at the company
in 1940, and in 1971 was appointed Chairman of the Executive Board.

In September 2014, it was announced that Heineken would sell its Mexican packaging
business Empaque to Crown for around $1.23 billion. Also during that month, Heineken
revealed it was in talks to sell its Czech operations to Molson Coors.
On 10 September 2015, Heineken International announced it would acquire a 50%
stake in Lagunitas Brewing Company of Petaluma, California as part of an effort to allow
Lagunitas to expand its operations globally. As part of the deal Lagunitas will no longer
be considered a craft brewer as the Heineken stake is greater than 25%.
In January 2017, Heineken announced it was in negotiations to buy the Kirin
Company's 12 breweries in Brazil. The following month, Heineken closed the deal and
bought Brasil Kirin for US$700 million.
After previously acquiring 50% of Lagunitas Brewing Company, Heineken announced,
on 4 May 2017, it would be purchasing the remaining 50%—making it the sole owner of
Lagunitas.
In February 2018, Heineken officially opened their new brewery in Meoqui,
Chihuahua, Mexico. The brewery, their seventh in Mexico, has a production capacity of 6
million hectolitres per year and produces brands such as Tecate, Dos Equis and
Heineken® for the Mexican market as well as for export markets. The Meoqui brewery is
the largest greenfield project in Heineken’s history
In June 2018, Heineken named Maggie Timoney as the CEO of Heineken USA,
making her the first woman to become a CEO of a major United States beer supplier.
In November 2018, Heineken signed definitive agreements with China Resources
Enterprise, Limited (CRE) and China Resources Beer (Holdings) Co. Ltd. (CR Beer) to
create a long-term strategic partnership for Mainland China, Hong Kong and Macau. In
the context of this partnership, Heineken will become CRE’s 40% minority partner in
holding company CRH (Beer) Limited (CBL), which controls CR Beer, the market leader
in China – the world’s largest beer market.

1. Old Vision Statement
“We brew great beers, we build great brands and are committed to surprising and
exciting our consumers everywhere.”
• Leading developer and marketer of premium beer and cider brands. Led by the
Heineken® brand, the Group has a powerful portfolio of more than 300
international, regional, local and specialty beers and ciders.
• Through "Brewing a Better World", sustainability is embedded in the business and
delivers value for all stakeholders.
• The passion of the Heineken family remains as strong today as it was in 1864
when we first started brewing beer.
• https://www.theheinekencompany.com/About-Us/Company-Strategy
2. Revised Vision Statement
We strive to the best global brewer that delivery the value of quality beers, build
award-winning brands and are committed to enthusing consumers everywhere.
3. Old Mission Statement
Heineken provides numerous information on their corporate website on its goals of
sustainability but does not provide a written mission statement.
1. Customer: “human” (at the age from 18 above)
2. Products or services: “premium beer and cider brands”
3. Markets: “every corner of the world”
4. Technology: N/A
5. Concern for survival, growth and profitability: “We are brand builders. The
Heineken® brand defines and unites us while our many local, regional and global
brands make our portfolio diverse and unique.”
6. Philosophy: “Brewing a better world.”
“We stand by our values: passion for quality, enjoyment of life,
respect for people and for the planet.”

4. Proposed Mission Statement
The Heineken® is a global (3) brewer of premium beer and cider brands (2) that is
shaped by a firm commitment to making our portfolio diverse and unique (7), also to
surprising and exciting our consumers everywhere (1) as well as improve the impact we
make on the planet (8). We have internationally diverse, dynamic, and entrepreneurial
team of over 85,000 employees and operate breweries, malteries, cider plants and other
modern production facilities and technology (4, 9). Through "Brewing a Better World",
sustainability is embedded in the business and delivers value for all stakeholders (5, 6).
(87 words)
1. Customers
2. Product or services
3. Markets
4. Technology
5. Survival, growth and profitability
6. Philosophy
7. Self-Concept
8. Public image
9. Employees
5. External Factor Evaluation Matrix (EFE Matrix, EFEM)
Opportunities Weight Rating Weighted
Score
1
Vietnam's population is projected to reach 100 million by
2020 with working-age population accounting for 60% of
total. This group is a major market of beer industry.
0.10 3 0.3
2 Vietnam's gross domestic product grew by 6.88% year-
on-year in the third quarter of 2018 0.13 4 0.52
3 The growth in tourism helps increase the sale of beer
industry (Increase 6.5% than 2017) 0.07 2 0.14
4
According to FTA, from 2018 onward the import tax rate
materials for beer industry in VN has been reduced, with
the lowest rate being 0%
0.12 4 0.48
According to the Ministry of Industry & Trade, in 2016
Vietnam was ranked 16th amongst the largest alcoholic
beverage consuming countries in the world and 3rd in

7 The global beer market was worth US$ 603.1 billion in
2018. It is forecasted to reach US$805 by 2024. 0.06 3 0.18
Primary Implications from EFEM (Opportunities)
The EFEM for Heineken presents major opportunities for the company going into the
future, especially in Vietnam. This country was rank 3rd and 1st amongst the largest
alcoholic beverage consuming countries in Asia and Southeast Asia respectively. The
domestic consumption is gradually increasing with 4 main beer brands, Heineken almost
dominates the high-end segment in Vietnamese breweries in 2018. Besides, thanks to a
sharp reduction of import tax in Vietnam from 2018, Heineken can save production costs
but still remain the high quality of raw materials. Furthermore, consumption of beer in
Vietnam is projected to reach approximately 5 billion liters by 2020, this is really a
potential market for Heineken.
Threats Weight Rating Weighted
Score
1
Carlsberg is planning to increase its shares in Habeco,
Vietnam's second largest beer market from 17.51% to
61.79%
0.04 2 0.08
2
According to the Law on Special Excise Duty
No.70/2014/QH13, from 2018 onwards, special
consumption tax rates imposed on alcoholic products
with ABV < 20º, ≥ 20º, and beer, will be 35 percent, 65
percent, and 65 percent respectively.
0.07 2 0.14
3
Under the Law on Advertising No.16/2012/QH13, mass
advertising is not permitted for alcoholic beverages with
an alcohol content above 15%
0.07 3 0.21
4
EU-Vietnam free trade agreement (EVFTA), which
removes the import tax and expected to come into force
in mid-2018, increases market access of other foreign
beer companies
0.05 2 0.10
Under pressure from other replacement products: wine,

Primary Implications from EFE (Threats)
The EFEM for Heineken also reveals major threats the company will soon face. One is
Heineken’s competitors always want to expand their market by acquiring shares from
other beer businesses as the most dangerous threat. For example, ThaiBev purchased
Sabeco – the largest beer company in Vietnam – with ambition to usurp this market.
Furthermore, at global marketplace, AB InBev also buy its rival SAB Miller to take
control of 30 percent of the world’s beer market. On the other hand, people care more
about health-conscious lifestyles, so they gradually switch to use healthy products such as
fresh juice, fresh smoothies, etc… Besides, laws on Special Excise Duty and Advertising
Limited in Vietnam had a bit strong influenced to the development of Heineken.
6. The Competitive
6.1. The competitors
6.1.1. AB InBev
Anheuser-Busch InBev SA/NV (AB InBev) is a multinational drink and
brewing holdings company based in Leuven, Belgium. Over 800 years ago, AB
InBev found its humble beginnings in the experienced brewing hands of Belgian
monks. It was in their abbeys where one of our original beer brands, Leffe, came to
be. In 1860, in the beer-friendly city of St. Louis, Eberhard Anheuser took control
of the Bavarian Brewery. After partnering with Adolphus Busch, they formed the
Anheuser-Busch Brewing Association. Together, through their pioneering and
innovating spirit, they built a refrigerated rail car system that spread Budweiser
beer across the United States and eventually the world.
Around the world, more breweries like Mexico’s Grupo Modelo, South Korea’s
Oriental Brewery and SABMiller came to unite under the AB InBev umbrella.
They all shared a common goal — bringing people together to form lasting
relationships over great-tasting beer.
https://www.ab-inbev.com/who-we-are/heritage.html
6.1.1. ThaiBev

consumers at all levels. The success of Beer Chang propelled the company to be a
market leader in domestic beer products.
In October 2003, altogether 58 related companies in the production and
marketing of alcoholic beverage group and related businesses merged into the Thai
Beverage Public Company Limited. Today, ThaiBev is not only Thailand's leading
beverage producer, but also one of Asia's largest beverage producers. The business
consists of four segments - spirits, beer, non-alcoholic beverage, and food.
http://www.thaibev.com/about-us
6.2. Competitive Profile Matrix (CPM)
Heineken AB InBev ThaiBev
Critical Success
Factors Weight Rating Score Rating Score Rating Score
Quality (Products) 0.20 3 0.70 4 0.80 2 0.40
Advertising 0.18 4 0.72 3 0.65 2 0.56
Recipe 0.12 3 0.38 4 0.45 2 0.24
Customer Loyalty 0.15 4 0.60 2 0.30 3 0.45
Innovation of new
product 0.06 3 0.18 1 0.10 2 0.12
Adjustability to
demand 0.09 2 0.24 1 0.15 3 0.30
Efficient distribution
channel 0.15 4 0.60 3 0.52 2 0.33
Price 0.05 3 0.15 1 0.06 4 0.20
Totals 1.00 3.57 3.03 2.60
Primary Implications from CPM
From viewing the competitive profile matrix, Heineken ranks the highest out of
its two main competitors AB InBev, and ThaiBev in its total critical success factors.

7. Financial statement
7.1. Income Statement
Income Statement overview
From viewing Heineken’s income statement, net income rose by over $2,000
million from 2017 to 2018. Revenues of the company increased but the cost of goods,
operating, interest and tax expenses went up along with it
7.2. Balance sheet
Balance sheet overview
Heineken’s total assets experience minor increase by over $1,300 million from
2017 to 2018. Every asset category seemed to grow except for the company’s
accounts receivable which took a steady drop by 82%. As for the company’s
liabilities, it also experienced an increase of over $200 million during the time period
although there is a huge fall in Other Current Liabilities which account for 51%. Last
is Heineken’s equity which increased by over $1,000 million due to the rise in
retained earnings.
31/12/2017 31/12/2018 Percent Change
$28,942,000,000 $30,026,000,000 3.75%
(14,851,000,000) (15,597,000,000) 5.02%
43,793,000,000 45,623,000,000 4.18%
(5,753,000,000) (6,095,000,000) 5.94%
49,546,000,000 51,718,000,000 4.38%
(524,000,000) (552,000,000) 5.34%
50,070,000,000 52,270,000,000 4.39%
(846,000,000) (848,000,000) 0.24%
0 0 #DIV/0! #DIV/0!
50,916,000,000 53,118,000,000 4.32%
Non-Recurring Events
Net Income
Income Statement
Interest Expense
EBT
Tax
Revenues
Cost of Goods Sold
Gross Profit
Operating Expenses
EBIT

8. Historical ratios
Historical Ratios overview
Heineken seems to be in a good position in paying its current and short-term liabilities
31/12/2017 31/12/2018 Percent Change
$29,513,000,000 $30,978,000,000 5%
137,000,000 24,000,000 -82%
0 0 #DIV/0! #DIV/0!
0 24,000,000 #DIV/0! #DIV/0!
29,650,000,000 31,026,000,000 5%
0 0 #DIV/0! #DIV/0!
0 0 #DIV/0! #DIV/0!
0 0 #DIV/0! #DIV/0!
0 0 #DIV/0! #DIV/0!
29,650,000,000 31,026,000,000 5%
1,261,000,000 1,148,000,000 -9%
258,000,000 126,000,000 -51%
1,519,000,000 1,274,000,000 -16%
13,151,000,000 13,591,000,000 3%
62,000,000 81,000,000 31%
14,732,000,000 14,946,000,000 1%
0 0 #DIV/0! #DIV/0!
11,078,000,000 12,439,000,000 12%
0 0 #DIV/0! #DIV/0!
3,840,000,000 3,641,000,000 -5%
14,918,000,000 16,080,000,000 8%
29,650,000,000 31,026,000,000 5%
Balance Sheet
Assets
Cash and Equivalents
Accounts Receivable
Total Current Liabilities
Other Current Assets
Total Current Assets
Property Plant & Equipment
Goodwill
Intangibles
Other Long-Term Assets
Total Assets
Liabilitie s
Accounts Payable
Other Current Liabilities
Inventory
Total Liabilities and Equity
Long-Term Debt
Other Long-Term Liabilities
Total Liabilities
Equity
Common Stock
Retained Earnings
Treasury Stock
Paid in Capital & Other
Total Equity

is six time higher than those in 2017 and the Average Collection Period in 2018 is about
eight times shorter than those in 2017. this means the average length of time it takes the
company to collect credit sales is shorter in 2018, and Heineken can shorter its credit sales
collecting. Gross profit margin and operating profit margin has decreased quite a bit along
with the company’s return on assets and equity revealing the company has not been doing
a good job of generating profit. Despite the returns generated on sales and investment of
Heineken in 2018 is slightly fall, but it still much higher than those of Alcoholic Industry
Ratios which is 30.15% for ROE and 13.25% for ROA (in 2018).
Historical Ratios
31/12/2017 31/12/2018
Current Ratio 19.52 24.35
Quick Ratio 19.52 24.35
Total Debt-to-Total-Assets
Ratio 0.50 0.48
Total Debt-to-Equity Ratio 0.99 0.93
Times-Interest-Earned Ratio -95 -94
Inventory Turnover #DIV/0! #DIV/0!
Fixed Assets Turnover #DIV/0! #DIV/0!
Total Assets Turnover 0.98 0.97
Accounts Receivable
Turnover 211 1251
Average Collection Period 1.73 0.29
Gross Profit Margin % 151% 152%
Operating Profit Margin % 171% 172%
ROA % 172% 171%
ROE % 341% 330%
9. Internal Factor Evaluation Matrix (IFE Matrix, IFEM)
Strengths Weight Rating Weighted
Score
The Heineken® brand grew 7.7%, its best performance in

3
Heineken have sponsored for a lot of entertainments
activities in the world. (Wimbledon, the US Open,
Australia Open and the Shanghai Open). Heineken®
expanded its portfolio of world-class sponsorships,
adding electric street racing series, Formula E, to a list
that already includes UEFA Champions League, Formula
One™, Rugby World Cup and James Bond.
0.10 4 0.40
4
Heineken understands the importance of having a diverse
workforce as a key driver of innovation, creativity and
business performance so they do their best to create an
environment for their employee to develop. For 2018,
their employee engagement scores continue to rank us in
the top quartile of companies against the external
benchmark.
0.06 3 0.18
5
Manufacturing processes are an automatic production
line. Therefore, Heineken’s operation system is labor
saving, energy saving, improve quality and high
accuracy.
0.07 4 0.28
6
The fund of Heineken is provided mostly by owners and
stockholders, creditors is just a part of its fund as the
increasing percentage of total equity is higher than total
debt 7%.
0.05 3 0.15
7
The average length of time it takes a firm to collect credit
sales is shorter in 2018, and the firm has high ability in
collecting credit sales. The Accounts Receivable
Turnover of Heineken in 2018 is six time higher than
those in 2017 (in 2018 it is 1251 while those in 2017 is
221)
0.07 4 0.28
8 HEINEKEN has more than 300 brands around the world. 0.08 4 0.32
9
Active in over 40 markets, Heineken’s consolidated cider
volume increased double digit. Strongbow Apple Cider is
outperforming in solid markets such as South Africa and
in new markets like Vietnam and Mexico.
0.05 3 0.15
10 Heineken were recognized for the second year running as
the most sustainable business in Vietnam 0.06 3 0.18

saving the energy, water source and wastes as well to protect our environment. This
project is a big step forward for Heineken to be more successful which presents another
internal strength for the company.
Weaknesses Weight Rating Weighted
Score
1
The company always focuses on brand Heineken in all
their promotions and the rest of the brands are showcased
as sub-brands for each geography.
0.02 2 0.04
2 Inconsistency of marketing practices in foreign markets 0.03 2 0.06
3 The operating profit in 2018 is less than those in 2017
6.4% 0.07 1 0.07
4
Heineken’s products price is quite high because of the
focusing on above average income people. (For example,
24 bottles of Heineken beer costs around 350,000 VND)
0.06 1 0.06
5
In 2018, only 69/73 markets in scope (96%) invested
10% of media budget, or more, in dedicated responsible
consumption campaigns.
0.04 2 0.08
6
Heineken’s accident frequency in 2018 was 1.13, up
from 1.04 in 2017. In 2018, 49% of severe injuries
happened in secondary distribution – of which 32% were
related to manual handling and 19% to slips, trips and
falls.
0.05 1 0.05
Total IFE Score 1.00 3.06
Primary Implications from IFEM (Weaknesses)
Internal weaknesses for Heineken have been its high-price, which is suitable for
above-average income people. In addition, they only pay attention on the name Heineken
and reckless to other brands. This makes obstruct the development of other products. As a
result, the operating profit in 2018 is less than those in 2017 6.4%. Also, human resource
is a big issue when Heineken’s accident frequency in 2018 was 1.13, up from 1.04 in
2017, most of them were related to manual handling, slips, trips and falls.

SO Strategies
1. Decrease the using of package by 10% to reduce portion of the brewer’s carbon
footprint, invest 25% in technology to reclaim and recycle water in our production
processes (S4 O4)
2. Maintain and enhance the good image of company with community activities
("Warm Spring", "When you drive, never drink" campaign). Invest 15% of the
program "warm winter" to support remote communities (S2 S3 O2)
3. Create new opportunities and invest 15% on total revenue through our B2C and B2B
E- commerce platforms and other digital commerce initiatives (S2 S3 O2 O3)
4. Invest $30 million in 2 years for building the brand image with specific attraction
elements in others big city in Vietnam (Hanoi, Danang, Nha Trang…) (S8 S9 S10
O5)
5. Contribute to the social and economic wellbeing of communities by investing in and
encouraging local entrepreneurship, education and community initiatives, giving
donations and undertaking volunteer activities (S4 O1)
ST Strategies
1. Maintain unique advertising, branding through meaningful activities besides
sponsoring entertainment events by investing $5 million in 1 year for Vietnamese
culture advertising (S2 S3 T1)
2. More advertising costs for Strongbow and current beers. Invest more $18 million in 3
years for Heineken beer 0.0 (S9 T5)
3. Maintain and drive customer loyalty by continuing the use of combined marketing
communication tools across mixed media such as informative websites, promotional
events, and media containing consumer testimonials to connect with customers in
order to compete to others brand (S2 S3 T1 T5)
WO Strategies
1. Invest $ 3 million in 2 years on equipment and protective gear for employees (W6
O1)
2. Invest $5 million in 2 years to promote Larue brands beside Heineken in Vietnam
market which focus on average income people (W1 O2 O3)
WT Strategies

10.2. Internal-External Matrix (IE)
10.2.1.Internal-External Matrix by region
Legend
1. Red: Americas
2. Green: Asia Pacific
3. Purple: Europe
4. Blue: Africa, Middle East & Eastern Europe
Data Table:
Division Percent of Firm
Division’s Revenues
Estimated
IFE Score
Estimated
EFE Score

Note:
As indicated by the positioning of the circles, grow and build strategies are
appropriate for Asia Pacific and Europe region. Americas is a candidate for hold and
maintain strategy of Heineken. Moreover, Heineken should use harvest and divest
strategy in Africa, Middle East & Eastern Europe and they have to decide if they still
want to be placed in there or if they should retreat from there
10.3. Quantitative Strategic Planning Matrix (QSPM)
The Quantitative Strategic Planning Matrix compares two different strategies that
can be the best option for Heineken to pursue in the future. The first strategy involves
extending market in other big cities of VN for available beer brands of Heineken. The
second strategy for the company focuses on investing for new global beer brand in
Vietnamese market. Both strategies are assigned a rating against each strength,
weakness, opportunity and threat of the company on a scale of 1 (not attractive) to 4
(highly attractive). If the factors do not applicate for the strategies, they are rated with
0. However, if one strategy was rated the other one needs a rating also.

16
Extend market in
other big cities of
VN for available
beer brands of
Heineken
Invest for new
global beer brand
in Vietnamese
market
Strengths Weight AS TAS AS TAS
1
The Heineken® brand grew 7.7%, its best performance in a decade.
Heineken new brand extension, Heineken® 0.0 has been very well received
and is now available in 38 markets worldwide
0.10 3 0.30 4 0.40
2
Heineken has a strong presence on social media with more than millions of
followers on the three most famous social media platforms, a well-
functioning and interactive website that draws a large number of internet
traffic and sales
0.09 4 0.36 3 0.27
3
Heineken have sponsored for a lot of entertainments activities in the world.
(Wimbledon, the US Open, Australia Open and the Shanghai Open).
Heineken® expanded its portfolio of world-class sponsorships, adding
electric street racing series, Formula E, to a list that already includes UEFA
Champions League, Formula One™, Rugby World Cup and James Bond.
0.10 4 0.40 3 0.30
4
Heineken understands the importance of having a diverse workforce as a
key driver of innovation, creativity and business performance so they do
their best to create an environment for their employee to develop. For 2018,
their employee engagement scores continue to rank us in the top quartile of
companies against the external benchmark.
0.06 2 0.12 1 0.06
5
Manufacturing processes are an automatic production line. Therefore,
Heineken’s operation system is labor saving, energy saving, improve
quality and high accuracy.
0.07 2 0.14 1 0.07
6
The fund of Heineken is provided mostly by owners and stockholders,
creditors is just a part of its fund as the increasing percentage of total equity
is higher than total debt 7%.
0.05 1 0.05 2 0.10
7 The average length of time it takes a firm to collect credit sales is shorter in
2018, and the firm has high ability in collecting credit sales. The Accounts 0.07 1 0.07 2 0.14

17
Receivable Turnover of Heineken in 2018 is six time higher than those in
2017 (in 2018 it is 1251 while those in 2017 is 221)
8 HEINEKEN has more than 300 brands around the world. 0.08 4 0.32 3 0.24
9
Active in over 40 markets, Heineken’s consolidated cider volume increased
double digit. Strongbow Apple Cider is outperforming in solid markets
such as South Africa and in new markets like Vietnam and Mexico.
0.05 4 0.20 3 0.15
10 Heineken were recognized for the second year running as the most
sustainable business in Vietnam 0.06 4 0.24 3 0.18
Extend market in
other big cities of
VN for available
beer brands of
Heineken
Invest for new
global beer brand
in Vietnamese
market
Weaknesses Weight AS TAS AS TAS
1 The company always focuses on brand Heineken in all their promotions
and the rest of the brands are showcased as sub-brands for each geography. 0.02 3 0.06 4 0.08
2 Inconsistency of marketing practices in foreign markets 0.03 3 0.09 4 0.12
3 The operating profit in 2018 is less than those in 2017 6.4% 0.07 3 0.21 1 0.07
4
Heineken’s products price is quite high because of the focusing on above
average income people. (For example, 24 bottles of Heineken beer costs
around 350,000 VND)
0.06 2 0.12 4 0.24
5 In 2018, only 69/73 markets in scope (96%) invested 10% of media
budget, or more, in dedicated responsible consumption campaigns. 0.04 2 0.08 3 0.12
6
Heineken’s accident frequency in 2018 was 1.13, up from 1.04 in 2017. In
2018, 49% of severe injuries happened in secondary distribution – of which
32% were related to manual handling and 19% to slips, trips and falls.
0.05 2 0.10 1 0.05
Extend market in
other big cities of
Invest for new
global beer brand

18
VN for available
beer brands of
Heineken
in Vietnamese
market
Opportunities Weight AS TAS AS TAS
1
Vietnam's population is projected to reach 100 million by 2020 with
working-age population accounting for 60% of total. This group is a major
market of beer industry.
0.10 4 0.40 3 0.30
2 Vietnam's gross domestic product grew by 6.88% year-on-year in the third
quarter of 2018 0.13 4 0.52 3 0.39
3 The growth in tourism helps increase the sale of beer industry (Increase
6.5% than 2017) 0.07 2 0.14 1 0.07
4 According to FTA, from 2018 onward the import tax rate materials for beer
industry in VN has been reduced, with the lowest rate being 0% 0.12 3 0.36 2 0.24
5
According to the Ministry of Industry & Trade, in 2016 Vietnam was
ranked 16th amongst the largest alcoholic beverage consuming countries in
the world and 3rd in Asia after China and Japan. In 2018, Vietnam's beer
consumption reaches 4 billion liters. By 2020, consumption of beer is
projected to reach 4.84 billion liters.
0.09 3 0.27 2 0.18
6 In 2018, the high-end market segment of Vietnam's beer industry has grown
by 7.2 percent. 0.08 3 0.24 4 0.32
7 The global beer market was worth US$ 603.1 billion in 2018. It is
forecasted to reach US$805 by 2024. 0.06 1 0.06 0 0.00
Extend market in
other big cities of
VN for available
beer brands of
Heineken
Invest for new
global beer brand
in Vietnamese
market

19
Threats Weight AS TAS AS TAS
1 Carlsberg is planning to increase its shares in Habeco, Vietnam's second
largest beer market from 17.51% to 61.79% 0.04 3 0.12 4 0.16
2
According to the Law on Special Excise Duty No.70/2014/QH13, from
2018 onwards, special consumption tax rates imposed on alcoholic products
with ABV < 20º, ≥ 20º, and beer, will be 35 percent, 65 percent, and 65
percent respectively.
0.07 1 0.07 2 0.14
3 Under the Law on Advertising No.16/2012/QH13, mass advertising is not
permitted for alcoholic beverages with an alcohol content above 15% 0.07 2 0.14 1 0.07
4
EU-Vietnam free trade agreement (EVFTA), which removes the import tax
and expected to come into force in mid-2018, increases market access of
other foreign beer companies
0.05 2 0.10 3 0.15
5
Under pressure from other replacement products: wine, fruit juice...
because of consumer trends towards alcohol moderation and natural,
health-conscious lifestyles.
0.06 3 0.18 4 0.24
6 In 2017, AB InBev buy its rival SAB Miller for £71 billion, effectively
taking control of 30 percent of the world’s beer production and sales 0.06 3 0.18 4 0.24
Extend market in
other big cities of
VN for available
beer brands of
Heineken
Invest for new
global beer brand
in Vietnamese
market
Weight AS TAS AS TAS
STAS 5.85 3.96

Note:
Heineken should increase the sale volume by Extend market in other big cities of
Vietnam for available beer brands of Heineken instead of Invest for new global beer
brand in Vietnamese market. Therefore, the company should invest in the research
and development department to refine their products to make them more unique and
to help raise customer loyalty.
10.4. Strategy conclusion
As seen above, the different matrixes have nearly the same result. All in all, Heineken
should care for their market penetration, market development and product development.
Thus, they can improve their market share in different regions as well as in the product
segments. By having a look at the regions Heineken is operating in, it shows that the
company has to decide how they want to handle their business in Africa, Middle East and
Eastern Europe because it does not work well. In contrast, they should expand their
business in Asia Pacific for getting a higher market share there.
The analysis also shows that Heineken has to improve their integration, especially in
the Americas, Asia Pacific and Europe in region segment. They can integrate in different
ways: backward, forward or horizontal integration. If they integrate horizontal, the
company should try to expand internationally to raise their market share as well as expand
their brand equity. Even increasing their capacity through new production plants or
producing without showing their brand is a possibility. For the vertical integration
Heineken can do it on one hand backward and on the other hand forward. With backward
integration, they can focus on the production process before their turn. However, if the
company prefers to integrate forward, then they concentrate on taking control of post-
production processes. Also, because they are relatively stable in their current markets,
they can use an aggressive strategy to progress, so they should never forget where their
strengths are and how they can improve their weaknesses. Meanwhile they should not
forget to keep an eye on the external threats and use the external opportunities in their
reach for expanding.

21
11.Recommendations
Recommendation Year 1 Year 2 Year 3 Total
1
Building the brand image with specific
attraction elements in other big cities in
Vietnam (Hanoi, Danang, Nha Trang…)
$15 million for
research and
building
Extra $15 million
for research and
building
$15 million $15 million $30 million
2 Develop more for modern equipment for
employees in the next 2 years
Buying more beer
filter machine,
mixing machine
and others.
Buying protective
gears for
employees
$1,5 million $ 1,5 million $3 million
3
Promote other brand beside Heineken in
global market in Asia Pacific especially
Vietnam
Pushing Strong
Bow in market
Pushing Heineken
0.0 in market
Keeping research
and development
$2 million $2 million $3 million $7 million
4 Create "Warm winter" program supports
the rural communities in Vietnam
Buying daily
supply chain
Research and
donate
Keeping running 2
programs before
and this new on
$1 million $3 million $5 million $9 million
5
Contribute to the social and economic
wellbeing of communities by investing in
and encouraging local entrepreneurship,
education and community initiatives, giving
donations and undertaking volunteer
activities
Provided over
85,000 direct jobs
paid in taxes
Keep going
provided direct job
$15 million $15 million $30 million
TOTAL $34,5 million $36,5 million $ 8 million $79 million

Recommendation Overview
The recommendations for improvement of products and brands were derived from the
SWOT and QSPM, which contains the weighted factors to support the importance of the
recommendation. Recommendations for improving the company’s current systems and
marketing efforts to increase the company’s global presence and finances came about
from the SWOT, which showed employee turnover, sale drops in Africa, Middle East and
Eastern Europe. The recommendation to start promotion production for potential market
from the Internal-External Matrix by regions.
A few of the key recommendations for Heineken involve improving and growing the
company’s current brands and products by investing more money into the research and
development departments. Other recommendations involve improving Heineken global
presence and expanding operations especially Vietnam by investing more into the “Warm
Winter” program, developing three production plants in Asia Pacific and others region.
It’s also recommended that the company improve its current systems by developing an
employee retention program and investing more into improving the current data system of
the company. All in all, these recommendations in total advance to three years while some
only two, and the total cost amount to implement them in the complete timespan is over
$79 million.
12.Perceptual map
Low quality
High quality
High price
1
2
3
45

1. Heineken
2. Thai Bev
3. Anheuser-Busch Inbev
4. Carlsberg
5. Sapporo Breweries
6. Habecco
Note:
This perceptual map focuses on five major beer brands and a comparison of their
quality (X-axis) and their price (Y-axis). Compared to the other brands, Heineken and
Anheuser-Busch Inbev (AB Inbev) is the most popular out of all the three other brands
listed but Heineken falls short in its quality by AB Inbev) taking the lead. From this
information, it is important that in the future Heineken continues to maintain its products
in popularity and emphasize on research and development for its beer brand to further
enhance its quality to get a bump up in its position.
13.EPS/EBIT Analysis
Common Stock Financing Debt Financing
Recession Normal Boom Recession Normal Boom
EBIT $4,515,000,000 $53,118,000,000 $61,085,000,000 $4,515,000,000 $53,118,000,000 $61,085,000,000
Interest 0 0 0 3,950,000 3,950,000 3,950,000
EBT 4,515,000,000 53,118,000,000 61,085,000,000 4,511,050,000 53,114,050,000 61,081,050,000
Taxes 1,128,750,000 13,279,500,000 15,271,250,000 1,127,762,500 13,278,512,500 15,270,262,500
EAT 3,386,250,000 39,838,500,000 45,813,750,000 3,383,287,500 39,835,537,500 45,810,787,500
#
Shares 572,227,565 572,227,565 572,227,565 570,770,000 570,770,000 570,770,000
EPS $5.92 $69.62 $80.06 $5.93 $69.79 $80.26
Stock 30% Debt 70%
Recession Normal Boom
EBIT $4,515,000,000 $53,118,000,000 $61,085,000,000
Interest 2,765,000 2,765,000 2,765,000
EBT 4,512,235,000 53,115,235,000 61,082,235,000

Amounted Needed $79,000,000
Interest Rate 5%
Tax Rate 25%
Shares Outstanding 570,770,000
# New Shares Outstanding 1,457,565
Stock Price $54.20
EPS/EBIT Analysis overview
As indicated by the EPS values of $5.93, $69.79 and $80.26 debt is the best financing
alternative for the Heineken if a recession, boom, or normal year is expected. Viewing the
EPS/EBIT Analysis, Heineken can obtain the needed capital for the list of
recommendations from either stock or debt since the EPS for the two financing options
have no difference under their EBIT ranges. Going into the future, the financing option
for Heineken will be 70 to 30 debt versus stock financing, with more debt than stock to
make sure there is little dilution of ownership.
14.Company evaluation
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$4,515,000,000 $53,118,000,000 $61,085,000,000
Common Stock
Financing
Debt Financing

AB InBev
Stockholders' Equity - (Goodwill +
Intangibles) ($106,238,000,000)
Net Income x 5 $344,585,000,000
(Share Price/EPS) x Net Income $189,843,362,666,667
Number of Shares Outstanding x
Share Price $163,627,200,000,000
Method Average $88,427,227,416,667
Company Valuation overview
The Company Valuation section presents the value of Heineken with another beer
company Anheuser-Busch Inbev (AB-Inbev) included under the four corporation
valuation methods which are the net worth method, the net income method, the price-
earnings ratio method and the outstanding shares method with the method average
included. Compared to its top competitor AB-Inbev, Heineken is extremely down in its
value by over $88 billion. Moving forward, it is vital that the company commits to
enhancing its value.
15.Projected financial ratios
Projected Ratios Historical Ratios
31/12/2018 31/12/2019 31/12/2020 31/12/2017 31/12/2018
Current Ratio 48.39 72.41 96.43 19.52 24.37
Quick Ratio 48.39 72.41 96.43 19.52 24.37
Debt-to-Total-Assets
Ratio 0.24 0.16 0.12 0.50 0.48
Debt-to-Equity Ratio 0.32 0.19 0.14 0.99 0.93
Times-Interest-Earned
Ratio -54 -54 -54 -95 -94
Inventory Turnover #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Fixed Assets Turnover #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Total Assets Turnover 0.49 0.33 0.24 0.98 0.97

ROA % 50% 33% 25% 172% 171%
ROE % 66% 40% 28% 341% 330%
Projected Financial Statements overview
Compared to historical ratios, Heineken will have better liquidation over the next 3
years from high growth of the current and quick ratios. Also, equity will grow more
compared to debt as seen from the drop of the Debt-to-Assets and Debt-to-Equity Ratio
caused by the major increase in the retained earning account. The company will hold
sustainable in ratio metrics such as Accounts Receivable Turnover, Average Collection
Period from 2019 to 2021. Heineken’s Gross and Operating Profits will drop from 2019
to 2021 at 100%. All in all, the metrics reveal that Heineken can successfully expand its
operations and improve its global brands, products and systems.
16.Executive summary
The first section in this strategic plan involved revising Heineken’s old vision and
mission statement, which lacked a future for the company and some of the nine
characteristics for a mission statement. The new vision statement focuses on what the
company wants to become, which potential brands need to develop, and putting it into a
customer perspective. The new mission statement places in characteristics that identify
Heineken’s customers, products and services, markets, technology, concern for survival-
growth-profitability, philosophy, self-concept, concern for public image, concern for
employee.
The next section was performing an external assessment for Heineken with an External
Factor Evaluation Matrix and Competitive Profile Matrix to identify the company’s
external opportunities and threats and to see how it ranks compared to its competitors.
The EFE Matrix reveals major threats the company will soon face because of the
expanding of competitors. However, the company is continuing to expand their market
because of the domination the high-end segment in and the sharp reduction of import tax
in Vietnam. From the CPM, it was shown that Heineken ranks the highest out of its two
main competitors AB InBev, and ThaiBev in Vietnamese market. Heineken has a strong
reputation for its high-quality products, they also have more diverse products (beer, craft
beer, cider), their advertisings are really outstanding.

average income people. Moreover, they are really famous around the world with more
than 300 brands, their new brand extension - Heineken® 0.0 - has been very well received
in 38 markets worldwide plus increase the consumption of Cider Brand products.
A strategy analysis was then conducted by creating a Strengths-Weaknesses-
Opportunities-Threats Matrix, Internal-External Matrix and Quantitative Strategic
Planning Matrix. All of these Matrices give a deeper look at Heineken’s position with
each of its segments and create and show the best strategies that the company should take.
They reveal that Heineken should be more aggressive and focused on its market
development, market penetration and its product development and that it should improve
its integration, either horizontal or vertical focusing on production processes.
The plan also presents a Perceptual Map that shows Heineken’s position with 5 major
beer brands on two bases, which are price and quality. Heineken and Anheuser-Busch
Inbev beer is the most popular out of all the other brands, in the future Heineken
continues to maintain its products in popularity and emphasize on research and
development for its beer brand to further enhance its quality to get a bump up in its
position.
A Recommendation list that stretches over the next three years was then created and
entails investing into research and development for improving products and brands,
investing into Heineken’s “Warm Winter” program and marketing to increase its
domestic and global presence, expanding operation into Vietnam, producing other
companies without its brand name attached and improving current company systems.
In order to see how the Recommendations would be financed, an EBIT Analysis was
conducted to see whether the recommendations would be financed by common stock or
debt. Neither common stock nor debt show any differences in their EBIT, so the decision
was a 30% stock to 70% debt ratio for historical purposes and to make sure there was
little dilution of ownership.
Projected Financial Ratios tables for the next three years were made to see the effect
these recommendations would have on Heineken’s financial position in the future. The
result reveals that the operation metrics from the ratios are good so that the company can
successfully expand its operations and improve its global presence, brands, products and
current systems over the three-year time period.

- “In Vietnam, the double-digit growth of Tiger and Larue was driven by our
execution and distribution expansion strategy to secondary cities and rural areas.”
- “We successfully launched Amstel in India and Vietnam to strengthen our local
offering.”
All in all, this is the strategic plan for Heineken to take and the projections, but it is still
difficult to know that the future truly holds for this company since we are not part of the
board and because of uncertainties in the financial market.

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