Content

FIVE FORCES ANALYSIS Part 1 Introduction

Part 2 Beer Industry Competitive Analysis

VIETNAM Part 3 Bargaining Power

BEER Part 4 Threats to Beer Industry

INDUSTRY
Part 5 Conclusion
 Part 1

INTRODUCTION
 Part 2

BEER INDUSTRY COMPETITIVE

ANALYSIS
Over the years, the beer market has been dominated by a group of four major
brands, namely Heineken, Sabeco, Carlsberg, and Habeco
 BEER INDUSTRY COMPETITIVE
ANALYSIS

Concentration rate Beer industry basic Behavioral Exit Barriers

and relative size of the conditions determinants
competitors

Pomegranate.asia reports that with Firstly, the beer industry requires Promotional activities, product High fixed costs
59% of the market's overall vast inputs. Secondly, there is fierce quality, images, and designs, Loss of loyal customer goodwill
consumption, the southside of competition in the beer market. packaging, innovation and the
Vietnam consumes the most beer. Thirdly, the brewery business is development of new products offer
In three regions of Vietnam, directly impacted by the suppliers better customer service
Heineken continues to be the best
brewer
 Part 3

BARGAINING POWER

Bargaining power of suppliers

The power of Beer industry Forward/Backward Product Customers’

suppliers basic conditions Integration Differentiation switching costs
(Introduction) possibilities

The bargaining power of The three main sources of When foreign breweries In preparation for the final Our findings indicate that
suppliers in the beer beer supply in Vietnam are invested in the Vietnam commissioning phase, allowing for an oligopolistic
industry is revealed in the the Netherlands (25 beer market, they struggled Interment has already market is critical, as
level of influence they have percent), Mexico (17 to find enough excellent purchased 42,000 tonnes switching costs can have
on the prices of inputs. percent), and Belgium (16 malt to produce excellent
These include labor and of malt barley, of which dramatically different
percent). Beer imports into beer. Due to financial 32,000 tonnes came from effects on prices, market
raw materials, as well as Vietnam make up constraints, local malting
other inputs such as barley, the Western Australian shares, and profits across
a small portion of total beer companies and farms were
cans, and bottles... In the grain belt's Kwinana and beer brands. We discover
consumption in the country unable to begin producing
beer industry, there are two Albany port zones. that firms use different
parties: suppliers and the high-quality malt and
barley that was required pricing (harvesting and
customers. As a result, the investment) strategies for
group with the most
the same switching costs.
bargaining power has the
most influence over the
entire industry.
 Part 3

BARGAINING POWER

Bargaining power of customers

The power of buyers Buyers' bargaining The concentration Forward/ Backward

power depends on the of buyers Integration posibilities
following:

Vietnam, through its rapidly growing First off, beer is not regarded as When foreign breweries invested in the When foreign breweries invested in the
economy and young population, is essential. Being a luxury good, people Vietnam beer market, they struggled to Vietnam beer market, they struggled to
creating an attractive market for a are not compelled to buy it regularly. find enough excellent malt to produce find enough excellent malt to produce
growing supplier of alcoholic Second, the creation of craft brewers is excellent beer. Due to financial excellent beer. Due to financial
beverages, particularly beer. As a constraints, local malting companies constraints, local malting companies
result, Vietnam is considered the incorrectly linked to drug usage and
criminality (Kotler, 1997). As a result, and farms were unable to begin and farms were unable to begin
Southeast Asian country with the
beer sales declined. producing the high-quality malt and producing the high-quality malt and
highest beer consumption, which is
barley that was required barley that was required
expected to grow in the coming years
as new beer brands enter this potential
market.
 Part 3

BARGAINING POWER

Bargaining power of customers

Product Differentiation Substitute for supplier Customers’ switching Buyers’knowledge of

products costs products

In preparation for the final Our findings indicate that allowing for Switching costs typically have a large Vietnam is one of the nations where
commissioning phase, Interment has an oligopolistic market is critical, as negative impact on competition, beer consumption is expanding at the
already purchased 42,000 tonnes of switching costs can have dramatically pricing, and profits. Only when highest rate in the globe, according to
malt barley, of which 32,000 tonnes different effects on prices, market switching costs are substantial do the the World Health Organization. So is it
came from the Western Australian shares, and profits across beer brands. price and profit of the beer brand healthy to drink beer, given that it is a
grain belt's Kwinana and Albany port We discover that firms use different serving the high client group surpass staple at parties? Does beer offer any
zones. pricing (harvesting and investment) those without switching costs. health advantages for the body?
strategies for the same switching
costs.
 Part 4

THREATS TO BEER INDUSTRY

The Threats Of New Entrants

Supply- side economies of scale

The overall leader of Vietnam’s beer Heineken has full ownership of its six Many Vietnamese enterprises have This shows that the beer market is not
market is Heineken, which in 2020 production facilities in Viet Nam tried to squeeze into the market, but easy to take but fierce competition.
ended Sabeco’s four-year reign as Heineken currently owns 41.9% of the have not succeeded.
leader shares of APB, one of the largest Tân Hiệp Phát story
brewers in Southeast Asia, while F&N

holds 40%.

 Became the owner of the beer brand

Tiger.
Demand- side economies of scale

Which Factors Do Vietnamese Consumer Care The Most When Choosing Beer?
Budweiser Heineken Tiger

Price 25% 5% 8%

Distributi on Channel 17% 2% 0%

Beer Informati on 13%

Taste 8% 2% 1%

Fake product 2% 4% 1%

Origin of beer 3% 4%

Promoti on 4% 0%

SOURCE: BUZZMETRICZ
 Part 4

THREATS TO BEER INDUSTRY

The Threats Of New Entrants

Demand- side economies of scale

In Vietnam, where on-trade sales are higher, consumers

prefer drinking outside in gatherings and parties with
colleagues, friends and families.
 Part 4

THREATS TO BEER INDUSTRY

The Threats Of New Entrants

Capital Requirement

Unit: billion VND

Years Beer Wine Other Baverages Total
2016-2020 17,704 791 8,831 27,326
2021-2025 15,660 341 12,750 28,751
 1/1/2020: Decree 100/2019/ND-CP to apply stricter driving Restrictive
under influence (DUI) regulations with more severe
punishments for drunk driving
Government Policy
Under
AlcoholicArticles
beverages
12.2 and
in Vietnam
13 of thehave
Law,toalcohol
pay taxes
advertisements
at 2 stages:
must
import not:
and
many domestic
major beerconsumption. It includes
companies reported 3 different
significant salestaxes:
drop
• Registered
duringseveral
the 1styears in advance
quarter of 2020
• contain
importEx:tax
information
(from 5-80%
Prevention Law
Sabeco andorHabeco,
imagery
dependingaimed
have on at
type
droppedencouraging
offrom
FTA)0.4% alcoholic
to
•• drinking
tax value
Registration
0.8%addedFood(10%)
Standards Registration Certificate
• excise taxes (from 50% to 65% in 2018)
• imply
Following
that alcoholic
paperwork: beverages
a certificate
mayofenable
business
maturity,
registration,
success,an
Taxfriendliness
import
reformcontract,
strategy
or sexual
afor
commercial
2030:
allure;higher
invoice,
speciala payment
consumption
document
tax (SCT)
(such Restrictive in Advertising
 aEnhancing
letter of credit),
community
and a health
bill of and
lading
reducing the country's budget
deficit.
be targeted at children, pupils, students, adolescents or pregnant
women
In Vietnam, alcoholic beverages are currently subject to an SCT of 65 Restrictive in Tax
peruse
cent,
objects,
increased
imagery,
from symbols,
50 in 2018.music, movie characters or brands
of products intended for children, pupils or students, or

 employ people under 18 years of age or their images. Production License

 Part 4

THREATS TO BEER INDUSTRY

Access to Raw Materials Distribution Channel

• Malt costs have increased by 40– • Investment license in order to export

50% from pre–pandemic levels food to Vietnam: wholesale and
• Can prices rose by 30–40% retail channels
compared to the same time in 2021: • A foreign business must collaborate
The majority of the cans are made with an authorized agent or
of aluminum distributor to sell its goods in
• Raw sugar, bottle caps, paper boxes, Vietnam if it lacks an investment
filter aid powder, hops, and other license for distribution and invoicing.
factors A typical agent will also offer
customers market research,
marketing, and after-sale service
 Part 4

THREATS TO BEER INDUSTRY

The Threats Of Substitutes

Number of Buyer propensity to The relative price

substitute substitutes performance of new
products available products

There are 2 main As for alcoholic products, Substitute product is

substitutes in the Beer people are tending to cheaper than industry
industry, including Alcoholic switch to fruit-infused wines product
and Non-alcoholic drinks. because of their safety, • Beer
The number of substitutes health, and drinking easily • Wine
is strong. (apricot wine) • Non-alcoholic breweries
 Part 4

THREATS TO BEER INDUSTRY

The Threats Of Substitutes

Sub’s competitive New output capa & Profitability

strength sales

For chit chat/ party entertaining: smoothies, coffee, tea, milk tea, low-alcoholic wine(especially red wine ), cider( Strongbow)

Salea New output capa Profitability Profitability

Conclusion
References