Introduction Considered one of the oldest drinks, the origin of beer dates back to 6000 B.C.

, and is primarily made from natural ingredients like yeast, malt, water and hops. The industry has witnessed different brewing styles. Though the average percentage is usually considered to be 4.5% alcohol by volume (ABV), this is however, not sacrosanct and may vary according to style, taste and preference across regions. Beer forms an integral part of many cultures and can be adopted as a lifestyle drink if consumed moderately and under restriction. Nevertheless, excess consumption of the same is likely to lead to various unremitting diseases (The Brewers of Europes Commitments under the EU Alcohol & Health Forum, 2008). As students of Business Strategy (BS), we have assumed the task of analyzing a caselet on European brewing industry, impacted by several global phenomenon, namely, Global Forces and European Brewing Industry. Pestel Analysis Political From the case study we notice the political intervention of the government that made strict prosecutions against drunken driving and the alcohol abuse. This initiative taken by the government was one of the reasons that transformed the buying behaviour of European market. Though would be classified under the head of social analysis the government intervention has caused the change in buying behaviour. Economical Social Technological From the case we are able to understand that technology had brought in efficiency and improved production. Technology had definitely helped in receiving information and had helped in various departments. However as a result of incessant research and development the manufacturing units not only were able to obtaining the economies of scale but also over produced. This actually encouraged players to search for the market. Environment Legal Lot of Mergers and Actuations happening which displays the low restriction with regard to consolidation of European brewery industry. We also are aware of the fact that a major portion of raw materials should be forced locally. Key Drivers of Change Health consciousness amongst European consumers Expansion of European Union (Stephen, 2004) Globalization Growing concern over alcohol abuse

Porters Five Force Analysis

This particular model was developed to find the attractiveness of the industry (Porter, 1980). The five forces of Porters model are threat of entry in to industry, Power of Buyers, Power of Sellers, threats of substitutes and the level of rivalry between the competitors (Porter, 1980). Let us apply this model and figure out how attractive the industry is. Potential Entrants With the sort of cut throat competition prevailing in the market and huge sunk cost required to set up a manufacturing plant and a distribution channel the entry into the brewery industry would not

be a cake walk. However there is a niche market for the imported beer which has demonstrated growth over the years (Brewersofeurope, 2004) Substitutes Beer had numerous substitutes such as wine with its growing culture, colas, Fruit Juices, Energy Drinks, Plain and Mineral water. Switching not only happens when the cost is low but if consumer perceives that the substitute is of higher value. This is said to be Price/Performance ratio. If customer perceives that wine provides higher value then although the price is more they would switch is what our understanding is. Porter proclaims that if the substitutes are high the industry is less attractive. The Power of Buyers The Power of Suppliers The industry had few suppliers like Crown and Owens-a-Illinois. Since there were less number of players and this cost the company half of the non-labour cost it is Supplier who dictate terms. We could substantiate with the learning from the case that captures, Fosters complaining the 11 percentage hike. The Competitive Rivalry In the prevailing cut throat competition the industry might not look attractive. However, Mergers and Acquisitions are happening ruthlessly that could result in consolidation of the market. Though highly competitive environment the big players are making money. Industry Life Cycle: With the market condition were the entry barrier is high, the suppliers and the buyers bargaining power is high and the slow growth of the market we would find that the European brewery Industry is its maturity stage of the Industry Life Cycle which is mentioned in the Exhibit 2. Competitors Profile Matrix Conclusion: From the case we get a clear picture of the European brewing industry which experiences consolidation and the drift of consumer consumption pattern. Thus in the pursuit of finding the key drivers of change through the macro environmental analysis through the pestel and Industry analysis through Porters Five Force model we have a better understanding of European Brewery Industry and its dynamics.