The aspect of an effective leadership assessment assists an organisation or a company to understand the kind of leadership abilities and skills that are necessary for moving towards its set goals and objectives. In this regard, it is important for a company to understand the capacity of its leadership in handling various roles and responsibilities. One of the key elements in assessing the effectiveness is the analysis of the leadership’s performances in various situations and areas. Nonetheless, assessing the effectiveness of Heineken's company leadership should not be regarded as a means of presenting a definitive picture of the potentials and capabilities of its executive (Dubbink and Van, 2011).
Assessment of the Effectiveness of Heineken's Company Leadership
The leadership of Heineken comprises of a top level of leaders described as Heineken Holding. The existence of this section of leadership is seen as one whose intention is to enhance the effectiveness of the entire leadership at the Heineken Company. The management and running of the Heineken Holding take place under the leadership of five directors and they play a vital role in the supervision of the company’s management team. The level of leadership represented by Heineken Holding does not engage in the direct execution of any task apart from offering supervision. This kind of arrangement is somewhat effective in the sense that it presents the five top-level directors with ample time and opportunity to keep the management on the check. Policy formulation and development functions, as well as initiation and implementation of corporate strategies at the Heineken Company, are performed under the leadership of the Executive Board (Dubbink and Van, 2011).
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Further, this level of leadership obtains considerable support from the company’s legal unit when it comes to making decisions and formulation of policies that touch on legal matters. According to Adeniyi (2013), strong and effective leaders often make wider consultations with the company’s legal team on various leadership issues. Essentially, the leadership and Heineken Company largely rely on legal and expert advice in addressing legal, financial and regulatory matters among others. The effectiveness and efficiency of the Heineken's company leadership are considerably influenced by the existence if a managerial framework that is aligned to the legal department and corporate business strategies. This leadership structure also comprises of a Supervisory Board whose role is very significant in times of receiving and the opinions of other stakeholders as well as briefing the management concerning the daily operations of the company. The leadership at Heineken Company also recognizes and absorbs the views and opinions of companies and individuals who are shareholders in the company.
Basis of Heineken's Competitive Advantage
One of the bases associated with Heineken’s competitive advantage is its strong brand, which has gone to the extent of acquiring global presence and recognition. The driving force behind Heineken’s competitive brand is the company’s unique diversification of its footprint in the global market, which has seen it attain an increment in margin expansion. This brand has managed to maintain its competitive status even in the presence of challenging and adverse economic environment as well as considerable currency pressures in markets that are still developing. The Heineken brand has also been keen on capitalizing on the emerging markets in the regions of Africa, South America and Eastern Europe (Dubbink and Van, 2011).
The management at Heineken views sustainable practices as means to achieving natural progression towards success in business. For this company, competitive strategies put in place play a critical role in reducing the various risks that may stand in the way of profit making. The initiatives by the company towards the sustainable sourcing and mitigating risks also serve to strengthen its competitive advantages and potential. The other basis upon which Heineken has remained competitive is that of materiality where they have always managed to update their materiality matrix. Such update considerations have often arisen from stakeholder engagement, carrying out relevant studies, analysis of internal risks and benchmarking of various results (Smith, 2014).
Potential Challenges to Heineken's Strategy
Some of the potential challenges to Heineken’s strategy include the threats posed by the likelihood of new entrants in the market and the general beer industry. Some competitors with significant amounts of capital have a higher likelihood of entering the beer market and capture a considerable section of the market enjoyed by Heineken. However, such a challenge may not cause serious interference to some of the strategic initiatives put forward by Heineken. This is due to be the having large portions of the global market share in the beer industry. Moreover, Heineken as an existing company has managed to gain experience of the years and that might assist them in creating economies of scale thus making it difficult for new entrants to access most channels of distribution in the market (Adeniyi, 2013).
The other strategic challenge to Heineken is the reduction in revenue streams in Europe and the United States, which could lead to a significant reduction in the volume of beer sales. Such reductions are attributable to unfavourable weather conditions as well as falling customer confidence in the U.S. market among others factors. In addition, Heineken may struggle to compete in the various market in Europe and U.S. following the emergence of the phenomenon of craft beer which is likely to attract a bigger share of the growing beer market. As craft beer concept continues to grow in popularity in various markets, the strategies developed by Heineken may not be effective in swaying back customers to embrace its brand and products (Smith, 2014).
Growth Strategies that Heineken Might Pursue
Strategically, Heineken might be forced to shift focus from over reliance on its traditional markets around Europe. Such an initiative will present the company with the opportunity to put more emphasis on making expansions into markets that are currently emerging such as China, Vietnam, and Nigeria. This strategy will play a critical role in enabling Heineken to increase its market success and achieve an overall growth. In line with growth strategy Smith (2014), observes that one of the major attractions put forwards by economies that are currently emerging is a rapid growth of the economy and a corresponding expectation of a fast growing need for consumer goods. Furthermore, Heineken might consider exploring ways of realizing a more appropriate positioning of its brand and product portfolio in both existing and emerging markets.
This will be a crucial strategy towards countering and dealing with the difficulties and challenges presented by unfavourable market conditions in the European market and ultimately achieving growth. As indicated by Dubbink and Van (2011), growth strategies for companies could be more successful if they continue to focus on emerging markets and economies. Additionally, Heineken could pursue initiatives directed towards local and global brand strategies, which will later link together with others strategies with the aim of accessing a premium segment of the growing market. Market penetration for Heineken could begin with an entry strategy, which makes the local resources accessible for any meaningful growth of the company and its business operations to be achieved. However, it is important to note that the appropriateness of any growth strategy pursued by Heineken is largely dependent on the nature of the resources it chooses to allocate.
In summing up, the effectiveness of the leadership at Heineken Company has the potential to influence several things such as the manner in which it addressees potential challenges. With advanced competition in the beer industry and market, Heineken remains under pressure to maintain its competitive advantage and even attract more customers. Notably, the status of the Heineken brand and product in the market puts it in a better position to continue growing towards the achievement of business success.
Adeniyi, M. A. (2013). Effective leadership management: An integration of styles, skills & The character for today's CEOs . Bloomington, IN Author House.
Dubbink, W., & Van, L. L. (2011). European business ethics cases in context: The morality of corporate decision making . Dordrecht: Springer.
Smith, B. (2014). The Heineken story: The 'lager' than life tale of the world’s bestselling Beer . Smit Barbara