| To introduce an analysis of the brewery industry, | | | | companies are looking for cost containment and |
| one point must be underlined: the European brewery | | | | brand reinforcement. Therefore, there have been a |
| market is mature, which is essential to understand its | | | | lot of acquisitions and alliances within the European |
| trends and its forces. | | | | brewing industry for the last ten years. Furthermore, |
| The threat of entry does not appear too much | | | | the report suggests that the importance of the five |
| severe in the European brewery industry. | | | | largest global brewers – 30 per cent of |
| Concerning the generic substitution, the scope of | | | | production volume- is going to increase in the same |
| products or services has very much expanded. For | | | | way as the cigarette industry where the five leading |
| example the consumer can choose between a beer, | | | | firms had 60 per cent in 2002. Suppliers are thus |
| a newspaper or playing at the national lottery. These | | | | more and more concentrated, which increases their |
| kinds of interrogations are, above all, true for low | | | | power. |
| purchasing power costumers like students. Moreover, | | | | Competitive rivalry is becoming very significant, when |
| as beers are not vital, consumers can also choose to | | | | a market is facing a mix of these factors: |
| do without. Consequently, due to the fierce external | | | | The market growth is low. |
| competition, firms specialized on this market must be | | | | There are high fixed costs in the industry. |
| very competitive in all aspects | | | | There are substantial exit barriers. |
| On balance, supermarkets, public house chains and | | | | Markets are undifferentiated. |
| average buyers still have a great buyer power, even | | | | The brewing firms should therefore innovate to |
| if breweries keep a certain number of faithful buyers, | | | | attract new customers and keep the previous ones |
| thanks to economies of scale, concentration and high | | | | and do not hesitate to launch new beer adapted to |
| switching costs. | | | | the particular tastes of the developing markets. |
| As the consumption of beer is decreasing in Europe, | | | | |
