Foster's vs Stella

BABM : FEBRUARY 2011

CONTENTS:

FOSTER'S & STELLA ARTOISE OVERVIEW

PORTER'S 5 FORCES

VALUE CHAIN : FOSTER'S

VALUE CHAIN: STELLA ARTOIS

FOSTER'S & STELLA ARTOISE OVERVIEW

FOSTER'S

Country of origin: Australia

Manufacturer and distributer in Europe: Heineken International

Introduced in UK in the early 1970's

STELLA ARTOIS

Country of origin: Belgium

Manufacturer and distributer: Anheuser-Busch

Introduced in UK in the early 1970's

PORTER'S 5 FORCES

Bargaining power of suppliers

The inputs industry requires are unique, making it costly to switch suppliers, who can rise cost of key commodities like grain, glass and aluminium. Stella Artois Interbrew for example reduced number of its suppliers and works now more closely with them (main supplier is Norpe UK LTD). On the one hand it may reduce the costs but on the other hand increases the dependences to the suppliers.

Reducing the Bargaining Power of Suppliers. Enhance the value of goods and services supplied by making effective use of information about customer needs and preferences, and speed the adoption of new technologies

Bargaining power of buyers

No loyalty to any particular brand, can easily switch to another product. If the product is not unique and can be purchased from other suppliers buyers will base their decision mainly on price, especially because of decline in disposable income. However, Fosters and Stella beer have a strong market position, as they are iconic brands in the UK (from the list of top beer brands: Fosters-2d place, Stella Artois-4 th), two of four companies in the UK beer industry which share about 76% of the market volume.

Reducing power- by increasing their loyalty through partnerships or loyalty programs, selling directly to consumers, or increasing the inherent or perceived value of a product by adding features or branding.

Ex., Australia's largest brewer Foster's is to separate its struggling wine arm from its beer business. The company hopes...