SWOT Analysis And Macro Environmental Factors Of Lion Nathan

Macro Level

This report would be taking into account the macro environmental factors of Australian renowned company, ‘Lion Nathan’ that has got international recognition in places like Sri Lanka, India, China and U.S. Lion is one of the largest food and beverage organization that employs nearly 6800 people across the whole of Australia and New Zealand. They have expanded portfolio that is being produced across 33 sites, generating communally revenue of around $5 billion every year. This report would be focusing on the internal and external factors in which the organization operates, focusing on the sustainable growth that is long-term in nature. Lion has been phenomenal in investing heavily where it matters- their people, facilities in production, brands and supply chain- for generating value to their consumers. Lion manufactures brands like Heineken, Beck’s Kirin, distributing Corona and Budweiser under license. In Australia, the foreign level brands have been on the rise with the industry witnessing increase in imports over the period of five years (Verhaal & Dobrev, 2016). International brands in beer are being formed and sold underneath the license in Australia that is being growing considerably.

SWOT analysis of Lion Nathan would be shimmering on the competitive benefit over the other brewery companies. SWOT analysis would be exhibiting a picture about personage strengths possessed by Lion Nathan, their relative weakness and the opportunities presented in the future and comparative threats from their rivals. All these elements have been of precise significance in accessing the middle competencies, developing future plan achievements. The report would also take in the segmentation and target market of Lion Nathan in understanding their work process and thoughts that goes behind in positioning of their product in certain ways.

The Government of Australia has been able to figure out that abuse through alcohol is one of the major issues existing in the society of Australia among the youngsters. It has therefore been able to impose excise charge on beer. This charge is generally imposed as per the content of alcohol available in the beer. Beer having alcohol substance less than 1.15 per cent the charge would be 5 per cent. The sources in the industry have been making certain assumptions that the strict charges of the government imposed on the beer in all probability would increase the beer’s price which is generally 10 per cent GST tariff on the component of the service. Nathan Lion practiced a rise in price of 4 per cent due to the revised policy in tax in New Zealand.

As per the Australian Drug Foundation, the manufacturers of alcohol would not be able to publicize or sponsor sport within the coming ten years in the horizon. As per Ambrosi, Cardozo & Tessaro,  (2014), the alcohol industry has been continuing to act in bad reliance by shunning away from its own rules in areas like advertising to children through the sponsorship in sports, endorsing drinking in a responsible manner. This is more likely to damage the economic background of the organization. Restriction would be imposed on advertising of alcohol and spirits on the social networking sites.

PESTLE

As per Murray & O'Neill, (2012), in Australia beer consumption tends to pursue a saga that low-curb beer assisting in management of weight. 75 per cent of the population in Australia believes this would be building on the burly social background of the company under discussion that is Lion Nathan. In 2012 Rugby match in New Zealand, a huge congregate of tourists cheered the Lion Nathan.

Lion Nathan has been an ardent follower of technology and the innovation process. The company believes in making products that meets the demands of customers. It has observed that the QR code technology can be associated with a specific wine where each scan would be able to pull up the stuffed of the mobile friendly site in sequence with each wine. Scanners have the ability to watch videos about the wine, getting video tours on wineries and discovering parings in food and tasting notes along with checking out on the reviews.

The demand of the organization for beer is a-influenced by the conditions of the climate. The cool winter generally leads to a drop in the demand for beer products while the summer season witnesses enough boosting in the beer consumption.

In the year 2009, Lion Nathan filed any sort of legal actions for the behavior that is anti-competitive in nature or anti-trust performance (Harasym & Podeszwa, 2015). Lion Nathan has never practiced any kind of non-compliance with the safety and healthy related measurements and regulations. The organization has been a good corporate citizen, abiding by the laws and regulations.

The Manufacturing industry of Beer has been experiencing a shaking-up over the period of last five years. Drinkers have been giving up on the conventional brands like Victoria Beer, favoring more the premium and craft beer and the other beverages like wine and cider. As a consequence, the per capita consumption of beer has dropped piercingly over the period of time. There has been a constant shift in the preferences of the consumers from the aspects of quantity to eminence, affecting the industry and the range of products. Beer drinkers have been purchasing more premiums, crafty and other global brands of beer, increasing in the price per unit, offsetting the decline in the process of consumption.  Healthy demand for craft beers has been causing quantifiable amount of craft breweries in increasing over the period of past decade figure in 2016-17 which is 293 (Kelly et al., 2013).

The current structure of market of the Beer Manufacturing industry indicating that access on a small scale and domestic level is achievable, but entrance at the national stage is stalled by the important entry barriers. The beer industry comprises bigger number of boutique or microbreweries, with the smaller organizations dominating the general market and the few other companies existing in between. Obstruction to entry into the beer market takes in important sunken costs and the other high continuing requirements of capital, existence of brand loyalty and managing the channels of allotment. The present key brewers existing in Australia are importantly varied in nature enhancing the general distribution capabilities and aptitude in market.

Political Factors

Carlton and United Breweries (CUB) recently regained the ownership of selling Stella Artois and Corona brand in Australia because of the merger that took place between Anheuser-Busch InBev and SABMiller. CUB in Australia has been experiencing a market share of 40.7 per cent in Australia’s beer market because of the deal that happened. Lion’s share figure is standing at 43 per cent, though retrieval of Stella Artois and Corona might just tip the scale towards SABMiller (Sacks et al., 2015). IBIS industry report states that the Beer Manufacturing in Australia exhibits a drop within the industry. An area that has been experiencing a growth is the segment of craft beer enjoying industry revenue of 8.9 per cent.

Lion Nathan faces stiff competition from other brands like Carlton and United Breweries and SABMiller plc. Its strength lies in the fact that it is one of the conformists, full strength lager crisp in nature on the mid-palate with good malt disposition. It is one of the most well-known tap beers existing in Australia, gaining important market share through some of the viral campaigns. Foster owned Carlton & United Beverages has been investigating on ways to develop the success of the viral that caricatured with the 1980s famous campaigns of British airways exhibiting thousands of extras structuring shapes as a human face (Bleier et al., 2013).  

Each year Australians consume tap beer worth around $2.5 billion, with two of the multinational beer organizations, namely Lion Nathan and CUB producing around 95 per cent of it. The basic dissimilarity between the beers of Lion and to that of Carlsberg and SABMiller is the ingredients it uses in its products. Lion uses high quality malted grains for its products whereas products like Carlsberg provides suitable products with prices that are feasible in nature. Lion Beer should be able to encourage their customers regarding the use of their high quality materials. The company uses this strategy only for their customer base in US and Australia. The brewing industry is a highly competitive market with every organization trying to surpass the other.

The global market segmentation is being used to settle on the segment, Lion Nathan finest larger beer needs to aim at. For Lion Nathan, it is significant to recognize the segment in perfect order to target their markets. The consumer that is being focused by Lion Nathan is characterized on the factors like age, income, cultural habits and lifestyle. The efficiency of the segment would be put to test with the four segment criteria like the measurability, accessibility, profitability and action-ability.

Lion Nathan segments the markets in which it operates into regions which is stated to be a regiocentric approach. These can be stated as Western Europe, Central and Easter Europe, the Middle East and Asia Pacific. Such division is essential in order to support the strategy and the marketing conditions. This region has their own differences with respect to culture and economical development. Therefore, Lion Nathan have been operating across the globe in many parts, maximizing the competitive advantage due to the market division into various regions and appointment of directors in each of these region. It assists the organization in adjusting better to the preferences of the consumers in the various geographical places. For instance, without the existence of the geographical segmentation Lion Nathan would not have thrived in certain parts of the Eastern Europe where the amount of disposable income is relatively smaller as compared to the countries in the Western Europe. Therefore, it can be stated that the characteristics of the geographical segmentation has played a key role to the success factor of Lion Nathan.

Economic Factors

Lion Nathan’s consumers are also being segmented as per the factors related to demographic. The two factors that are key in the beer industry are the age and gender of consumers. The beer that is premium in nature is generally being sold to consumers between the age ranges of 25-50 years. This is the age where the consumer is neither stated to be immature nor too old. In most of the countries that are developing in nature the people are permitted to drink alcohol after the attain the age of 18 or 21 in some cases (Reid, McLaughlin & Moore, 2014).  According to the reports men dominates the segment of drinking beer and therefore the main focus of Lion Nathan is on the male section, though in the present scenario women are not left far behind.

The consumers of Lion Nathan are basically from the core to high-income class as Lion Nathan has some of its brands that are very expensive with the others being available at reasonable price. It has certain expensive brands than the casual beers which are more limited than any other brands.

The finest beer of Lion Nathan is being sold to consumers who are relatively richer and from the elevated social class. There consumers are conscious of the beer they are drinking and the beer quality which is very significant. These consumers are generally brand dedicated as it interrelates them with the society division as they want to be in privileged value which the beer delivers. It fits into the more urbane and challenging lifestyle of people. According to Beer, (2015), the consumers who have been drinking the premium beer are more self-conscious, on behalf of themselves with the brands that in most likelihood would want the fresh and the finest products available in the market. Therefore, the beer that is high in quality of Lion Nathan has been the major goal since the beginning and was highly a worrying factor. Lion Nathan’s strong brand presence has been advertised in a way that fits the description of the consumer.

As per the segmentation evaluation the targeted consumer is the male in the middle to relatively high-income category between the age group of 25-50 years old. Those people are mainly from the city that are generally highly educated, having awareness of brands and very sophisticated in his behavior. This general individuality is assessable, reachable and actionable (Beer, 2015). These characteristics have been identified as very efficient and useful for the segmentation of the market of the organization. In case of Lion Nathan premium products it is possibly the most pertinent facet of the Lion Nathan segment. The finest status of its brands like Heineken that it wants to sell, that has to be sustained by the consumers. If Lion Nathan fails in attracting the segment it has been aiming for and its premium beer becomes a popular product underneath the lower classes, educated people would be less interested in buying the premium beer. This would certainly damage the image of the brand and the marketing strategy of Lion Nathan.

Conclusion:

This report took into account the external factors that affect the working environment of Nathan Lion. It faces stiff competition in Australia from the other brands though Lion Beer still holds the pole position in the beer market at 43 per cent. It has been using technology to the best of its knowledge in negating the competition factor and attracting consumers more with their best beer. Foreign beer organizations are lining up in Australia to operate from here under the license of Australia. Craft beer is something that is gaining immense popularity among the Australians and its growth has been immense as compared to tap beer. It has been targeting the more educated sort of people who are urbane in nature and not necessarily the lower class people as it might lead to the high income group opt out of this particular brand. They have been targeting the people within the age group of 25-50 though there are brands that are targeted towards the other age groups. It has been trying to dig in a uniform director for all the regions to bring in uniformity in its proceedings.

Reference:

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Bleier, B., Callahan, A., Farmer, S., & Min, H. (2013). Craft Beer Production.

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Sacks, G., Mialon, M., Vandevijvere, S., Trevena, H., Snowdon, W., Crino, M., & Swinburn, B. (2015). Comparison of food industry policies and commitments on marketing to children and product (re) formulation in Australia, New Zealand and Fiji. Critical Public Health, 25(3), 299-319.

Verhaal, C., & Dobrev, S. D. (2016, January). Can Success Be A Curse?: Signature Products and Identity Violation in the Craft Beer Industry. In Academy of Management Proceedings (Vol. 2016, No. 1, p. 14429). Academy of Management.