Generic Strategies Unibrew

Generic strategies

According to Porter, there are three possible strategies, Cost Leadership, Differentiation and Focus.

The Cost Leadership strategy is used by company reduce production and distribution costs, so they then can lower their prices on their products. Hopefully after lowering production and distribution costs, competitor's prices will be so high that consumers choose our products because prices will be lower than competitor's.

In Differentiation strategy, the company will seek for what makes it different. The company develops forces which will contribute to the imaginary differentiation. It is important to treat their products with great caution and deliver the quality of their products effectively to the consumer.

The last strategy, Focus strategy is focusing on one or more narrow market segments. Focus strategy can be both Cost Leadership and Differentiation strategy within the narrow segment.

If you compare these strategies with Royal Unibrew it is clear that they use Focus strategy. Royal Unibrew has referred to a narrow product depth because Royal Unibrew product portfolio consists of beer, soft drinks, juice, and energy drinks. On the other hand, Royal Unibrew a wide range, as there are numerous variations of all products.

We used Porter's five forces to analyze five forces which determine the competitive intensity and therefore attractiveness of Danish beverage industry according to Royal Unibrew.

Rivalry:

There are only a few major players in the industry creating an oligopoly. The rivalry is currently reaching medium levels but of course everyone is trying to be the best.

Bargaining power of suppliers:

Era where the prices of raw materials are only increasing years after years because of the current economy and non-renewable resources. The bargaining power of suppliers becomes smaller, because Royal Unibrew or Carlsberg are the two dominant leaders of the market with more than 80% of the market share. There are a lot of suppliers for 2 big companies and several small breweries which mean little power for them.

Bargaining power of customers:

It's really important to know the power of costumers, especially in the case of Royal Unibrew with many customers and a high bargaining power of customers.

The proof is that the company has 8 distribution centers just for Denmark

Royal Unibrew has to know its customer very well in order to fulfil their needs. According to many observations, customers decide how many products will they buy and they can negotiate prices, conditions, services, by the buying behavior as well. Today's consumers want either premium beer or cheaper beer but with more quality than before.