Polish Brewery Market Analysis

acculturation Brewery Market digestMARKET AND COMPETITION synopsisSh beholders, employees with their families and collaborators with their families benefit from the beer work. According to the labor estimates this branch and cooperating industries employs roughly 200 000 workers in Europe, and 600 000 is the number of employees who would like work for the brewing sedulousness in the future. Polish brewery merchandise place place employs about 15 000 pack, and argonas that cooperate with it fork out higher booking rate ( 56,2 thousand employees ). People be hired in HORECA and heap and almost 186,000 of them actualize a living by working for the breweries. This piddle aways 740,000 families tout ensemble that owe their monetary stability to this diligence.InvestorsAfter the f wholly of the communism in 1989 round off brewery market has been dominated by the multiple foreign investors. They k sensitive that this market has a potential, and needs money, technolo gy, and experience in society to be successful. At the beginning of the 90s consumption of the beer was not exceeding 30 litres per person per year. It was of a poor quality and the beer consumption culture did not equal the horse opera reality. This investment needed big money, and hence investors decided to st artwork the brewery business on the polish market from the scratch. For example SABMiller has spent almost 2 one thousand millions zloty ( PLN ) on the development of its four brands, and thus one of them, Tychy, became the largest in Europe.Brewpole, an Australian participation, was the first leading investor on the market. It created new action lines and introduced a new brand EB. Then it gained almost 16% of the market sh ars. However, later on it had to merge with the Zywiec Group ( because of some of its advertisement failures ). Finally, production scale and obedient merchandising were the most instantant issues that must have been attended. Big players were winning over smaller ones, and others were just closed down because were not profi put back. opposed investors have helped the polish brewery market by putting into it $ 1 billion and now it is the most modern in Europe. Almost 80% of the beer production is under their control. thus technology development in the brewery constancy has been influenced by them, and this has led to gain of the beer production amidst 1990-1997.Today polish brewery industry travels in the first place to the world(prenominal) corporations. They knew Poles be patriots, and so decided to take proceeds of this attitude. Tyskie, Okocim, Lech, Zywiec, Warka, Lomza and Strzelec sound polish, and thus are the most popular on this market in Poland. This shows that the foreign investors respect polish tradition and decided to coalesce it with their corporate global culture.ExternalclientsBeer is one of the most popular global products. According to the data men are a vast bulk when it comes to the bee r consumption ( 65%). In case of women, 45% of them does drink beer. 76% of the beer drink consumers are in the age be number 1 47, and whats interesting, 35% of people between 18-29 declare to be the loyal beer purchasers and its consumers. When it comes to frequency of the consumed beer, 47% of the consumers are between 30-65.Whats surprising, there is a huge difference in the culture of the beer consumers. People with the Masters degree and over make up unaccompanied 8% of the beer fans. Almost 26% of people with the basic direction belong to this crowd, 34% with the vocational education does drink beer, and 37% with the secondary education are loyal beer consumers.72% of the consumers usually drinks beer at home, 21% in pubs and the restaurants, and only 6% while enjoying the nature. They prefer light beer rather than dark. The power for his choice lays not only In the mouthful, hardly alike In its healthy properties. Light beer strengthens our bones, helps fight the ost eoporosis, and bone tissue disease, which leads to the multiple fractures. For the concluding 10 years Poles have been drinking beer to a greater extent than before. They treat beer as a substitute for wines and vodkas. According to the researches, 60% of the overall annual inebriantic drink consumption goes to beer, 10% to vodka, and only 10% to wine. Poles are patriots and thereof almost 98% of them chooses polish beer. unless when it comes to the quality of beer and its price, 45% definitely chooses German, Dutch or Czech products. . The price is usually too high In Poland, and thus the consumers are forced to buy the imported beers. However, the quality and taste of the beer are improved ein truth year, and therefore beer consumption increases by a few percent.SuppliersBrewery industry requires specific type of suppliers. This sector is supplied by the hop, and surface and blur packaging producers. Moreover, brewery industry emphasises also the printing plant serve.Br ewery industry is supplied with the hop by the foreign importers and domestic suppliers. More than a half of the imported hop is used in the beer production, and suppliers are usually Hungary and Czech Republic, from the agri-food branch. Breweries sign with them the hop supply contracts in order to avoid the abrupt price changes of the resource on the market.Domestic producers are the second grouping of the hop suppliers. They do not strongly influence the breweries, which then do not fell threatened by them. The reason for such(prenominal)(prenominal) slur is that there is a low duty and low prices that encourage the breweries to import rather than use the services offered by the domestic suppliers, which subsequently focus only the brewery with the best parameters.Next type of suppliers for the breweries are those who supply glass and/or metal packages. There is a strong competition, and each of them tries to make his offer more attractive for the customer than the others low price, good quality, and whitethornhap best parameters. Most of the producers have a very attractive offers, and thus the breweries feel free in the choice of the offers.Printing plant services are in the same mooring as glass and metal packages suppliers. Because of the strong competition on this market, they try to make their offers attractive as it is possible, and thus make the customer to choose them. Large breweries use primary(prenominal)ly the services offered by the bigger plants.PEST analysisPEST Analysis is a combination of parts of the environment, that are put together in order to be easily researched by the company. It considers influence of the politics on the market, economy, genial aspects, and technological development. Brewery industry challenges increase every beat when European countries start to join the European Union, for example Poland, Hungary and Czech Republic in 2004, and decide to co-operate with the non-European countries. There are many opportwho leies and limitations which breweries have to challenge.political sciences policies which consider alcohol sales include price regulations, sales limitations ( such as age, unsober customers, time when alcohol can be sold, place of selling and consumption ), and license for sale. Governments try to influence the price rivalry by limiting the advertisements or licensing the alcohol sales. They also increase prices in order to increase states revenues, and hamper increase of the consumption ( and alcoholism problems of the society ), especially among young people. Government wants to minimise the negative effects of the alcohol consumption, such as auto accidents or its overdose. Sales licensing helps control whether the alcohol companies adhere to the sales rules and afford taxes. State monopoly is the factor which does not apply to the brewery industry.Economic and social environments are the most favourable factors for the industrys development. There are different economic syst ems in the countries of operation, and therefore there needed different approaches. However, European Union rules are similar for all of its members common conduceress policy and rules of the export trade policy. Exchange policy is another issue to consider. There are unsounded some countries that havent changed their currency yet ( f.ex. Poland ). Effects of the global financial crisis in 2009 are still felt on the currency market, and therefore polish zloty varies every day. Labour be are on the employers (demand) side of the push back market framework. The average hourly labour cost in 2006 in the European Union was 20,35 Euro. However, there was a 20% increase in 2008 in Czech Republic, Russia, Bulgaria, Latvia, Poland and Lithuania. Year 2009 was economically dis favorous for every country, but the prognosis seem to be optimistic and look forward to improvements on the market. During the last years inflation has influenced gross domestic product growth rate, and the follow ing table shows how it was ever-changing between years 2006-2010.As we can conclude from this table, GDP growth rate varies every year by 0,1%, however, it declines until the year of the financial crisis in 2009, where it drastically fell down by 1%-2% ( -2,5% was the lowest and the worst moment ). Luckily GDP started to catch up on losses quickly in 2010, and seems to follow the statistics from year 2006. Financial crisis had also influenced the employment rate almost 34 mln people have bemused their jobs in Europe, and 212 mln all over the world. 13,4% of the young and 5,2% of the older people were among the unemployed. brotherly and cultural influences in business are different in all countries. The dominant godliness in the world is Christianity 33% of respondents claim they do believe in God, Islam 21%, Atheists 16%, Hinduism 14%. The following consider presents all known religions and their followers in percentage ( out of the total humanity )Brewery industry will no t find its potential consumers among Muslims, because their religion forbids them to drink any kind of alcohol.Older generation is usually very traditional and therefore sticks to the domestic products, that are proven and are in the main with the tradition. Young people perceive foreign products as unique and attractive, therefore they have positive attitude towards innovation and modernity of the foreign products and services. But in order to get their loyalty and trust brewery companies must consider the cultural and linguistic differences. Moreover, societys wealth influences the possible sale of the product. Western countries, such as France or Germany, unlike Poland, Lithuania or Estonia can afford high-ticket(prenominal) products, without violating much their budget ( for example German retirees going for a holidays foreign ).Modern technology plays also important role in the production. It helps make products cheaply and with a good quality. Foam of the beer is more stabl e, and the taste is more adapted to the consumers needs. Moreover, technology can be implemented in order to drive home the natural environment. Adnams, the British brewery, has invested in such a technology, without influencing negatively the nature and taste of its ecological product East Green. During the brewing butt offset minimises CO2 emission to zero.Porters 5 forcesThis method helps analyse the sector by researching factors that make it attractive for the current and potential investors. There are four entry barriers in the brewery industry scale of economy, no ingress to the distribution channel, lack of the capital letter, differentiation of products, and the state policy. Technology used by the brewery companies and their developed production allow them produce at the lowest building block costs. However, company which decides to enter the market cannot produce at a unit cost that is lower than the market price. Next problem company must challenge is lack of the di stribution channels. Market belongs to the brewery corporations, and thus the new rival has look for the other distributors. More over, it has also to invest in the beer producing technology, for the marketing and promotion, market research, and acquisition of the raw material. Whats more, government policy counters by the social insobriety ( anti alcohol legislation ), therefore alcohol sales are impeded. Last barrier is the product differentiation. Some brands, such as Heineken or Lomza have achieved high positions on the brewery market, and thus the new competition may have problems with gaining trust and loyalty of its target group.Bargaining power of suppliers in the beer market has been strongly influenced by the reduce of the aluminium costs control, and therefore this has led to the increase of the packaging materials costs. In order to avoid creation dependent on these materials some breweries started to run recycling programmes.Brewery target group are the beer consumers. They choose whether they want to buy the product or not, and therefore influence sales of the company. Thus breweries care about the quality of their products, packaging, add some gadgets, and consider the way the product is served to the customer. He has a commodious range of beers to choose and is given an information about each of them. Therefore he can choose the brand that mostly fits his taste. The functioning of the company depends largely on his beer choice.There are no substitutes for the beer, because there are no substitutes for hop. Brewery industry is very specific, because new products from this area are seldom launched to the market. However, they dont influence the beers consumption. Even non-alcohol beers havent increased its volume sales.Competition within the brewery industry is very active. Success of the brewery companies depend on the good advertisement, economies of scale benefits, costs minimisation and attractive packaging. Leaders on the global beer marke t are Heineken and Carlsberg. Smaller breweries try to reach their position and claim to have 40% increase in sales, and therefore bigger corporation try to save their position by comparing their successes to the weaker competition. Smaller players on the market increase their shares by selling the low quality products, and thus encourage potential investor to take over the brewery. Breweries try to reach their customers by selling them cheaper products. Customer looking at the low price resigns from the quality. Middle breweries dominate the segments with the low price products. Bigger corporations promote their brands by investing big capital in the marketing and promotion campaigns. Smaller companies cant afford such a big investment, and thus they just encourage and motivate their salesmen to be more effective.SWOT analysisBrewery industry is one of the most develop industries in the world. Its internal ( strengths, weaknesses ) and external ( opportunities, threats ) factors c an be audited by development the strategic environment analysis called SWOT analysis. It is presented belowAll these factors appertain individually to each of the companies operating in the brewery industry. Strengths shown in the table are their resources and capabilities that are used in order to develop their competitive advantage on the market ( Garbarski et al, 2000 ). There will be always a high demand for beer, and developed technology will be the stress for the products improvement and making it more attractive for the customers. This creates a relationship between both, product and its consumer.Strengths prevail over the weaknesses, however they strongly influence the market operations of the companies. High advertising costs are a main financial burden for the smaller and medium players. Moreover, because of the low budget they have to deal with the narrow product line, and thus the weak and slow distribution. However, If the industry considers its opportunities that ap pear during the analysis of the environment, it may observe some growth and scram more profits. Demographic increase and smaller range of age for drinking alcohol help reach a wider range of customers. However, tax increases, changing customers tastes, or anti-alcohol campaigns may threaten actions taken to improve the financial situation within the industry.INTERNET WEBSITEShttp//www.ons.gov.uk/about-statistics/user-guidance/lm-guide/concepts/costs/index.htmlhttp//ecodzien.pl/2010/01/07/najbardziej-ekologiczne-piwo-swiata/http//unia.realnet.pl/panstwa_czlonkowskie.phphttp//wyborcza.biz/biznes/1,101562,7526063,Przez_kryzys_34_mln_ludzi_stracilo_prace.htmlhttp//www.tradingeconomics.com/Economics/GDP-Growth.aspx?Symbol=EUR ).http//www.newsweek.pl/artykuly/sekcje/nauka/jasne-piwo-zdrowe-dla-kosci,53372,1inwestor.msp.gov.pl/download.php?s=4id=4146http//agro.e-bmp.pl/index.php?art=1742