The European Brewing Industry
Political Environment
European Union
- Poland, Hungary and the Czech Republic will join within five years- these countries have young populations with a desire for all things Western.
- ING Barings predicts growth in these economies to average 8% p.a. over the decade after which they join the EU.
- Europe is moving towards becoming a single market with a stable political environment.
WTO, GATT
- The current pressure on Europe from America and Australia to reduce agriculture subsidies could result in a change in the industry’s raw material supply base.
Taxes
- VAT & Duty rates vary across Europe- VAT ranges from 15% in Luxembourg to 22% in Finland , while UK duty levels are seven times higher than those in France .
Economic Environment
GDP
- Per Capita GDP in Europe has risen from $11,500 in 1989 to $16,800 in 1999 . GDP growth for 2000 is estimated to be 2.8% .
EMU
- Many stocks are now traded in Euros- investors can compare stocks across Europe easily and see which companies are lagging against their competitors.
- EMU has lowered interest rates- Spanish companies can now access the same interest rates as German companies, compared to four years ago when they paid 4.5 percentage points more in interest than German companies . This creates a level playing field for all European companies seeking access to capital.
Mergers & Acquisitions
- The value of M&A activity in the EU is $1.3 trillion per annum- a 400% increase on 1994 - this is leading to a pan-European economy.
Energy Costs & Availability
- Deregulation of state monopolies has brought more competition among suppliers and a fall in the ...
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The European Union has been helped economically ever since World War II. Right after World War II’s end, Europe was struggling to hold on. The countries of the modern-day European Union thought it would be a good idea to come together and help each others struggling economy. To this day, this decision has had a very positive outcome on the EU’s economy. As shown in Diagram 1, the European Union combined together has the world’s highest GDP at 18.3 Trillion USD as compared to the United States’ 17.4 Trillion USD GDP and China’s 10.4 Trillion USD GDP. The idea
This report addresses the issue of whether Amsterdam Brewery should invest and promote new products or continue to focus on current products. And, whether Jeff Carefoote should pay attention to whole brands or spent expense to increase brewing capacity. The report describes a strategic plan to ensure Amsterdam Brewery’s competitiveness in the market.
With a high GDP of 547 billion dollars, Poland needed help. Fortunately, said in Document C, Germany helped Poland in many ways. Now, in the past two decades, Poland reached 62% of the level of the comfortable a country at the core of Europe(Document C). To conclude, if you join the EU in any conditions, your GDP may grow to a higher rank, but with challenging circumstances to
In conclusion, the European Union has “merged” the countries of Europe. It has developed a common currency called the Euro’s, and a Parliament located in Belgium, Luxembourg, and France. Also, ALL of the countries of the Union are affected when one country is affected. This is important because the continent of Europe had become very weak after the wars and they needed to strengthen, and the European Union keeps the countries of Europe strong and economically fit.
This organization belongs to the oligopoly market structure. The oligopoly market structure involves a few sellers of a standardized or differentiated product, a homogenous oligopoly or a differentiated oligopoly (McConnell, 2004, p. 467). In an oligopolistic market each firm is affected by the decisions of the other firms in the industry in determining their price and output (McConnell, 2005, P.413). Another factor of an oligopolistic market is the conditions of entry. In an oligopoly, there are significant barriers to entry into the market. These barriers exist because in these industries, three or four firms may have sufficient sales to achieve economies of scale, making the smaller firms would not be able to survive against the larger companies that control the industry (McConnell, 2005, p.
Robert E. Lucas Jr.’s journal article, “Some Macroeconomics for the 21st Century” in the Journal of Economic Perspectives, uses both his own and other economist’s models to track and predict economic industrialization and growth by per capita income. Using models of growth on a country wide basis, Lucas is able to track the rate at which nations become industrialized, and the growth rate of the average income once industrialization has taken place. In doing so, he has come to the conclusion that the average rate of growth among industrialized nations is around 2% for the last 30 years, but is higher the closer the nation is to the point in time that it first industrialized. This conclusion is supported by his models, and is a generally accepted idea. Lucas goes on to say that the farther we get from the industrial revolution the average growth rate is more likely to hit 1.5% as a greater percentage of countries become industrialized.
Every year there is a ‘league table‘ published showing the level of economic growth achieved by each country. The comparison is made using each countries Gross Domestic Product, or GDP. An important factor to look at is the difference between actual and potential economic growth. Actual economic growth increases in real GDP. This increase can occur as result of using previously unemployed resources, or reallocating resources into more productive areas or improving existing resources. Whereas potential economic growth is the productive capacity of the economy. For example, it can be shown by the predicted ability of the country to produce goods and services. This changes when there is an increase in the quantity or quality of the resources. All countries have different ways of achieving this with the resources they have available to them. For this reason it party answers the question of why some countries are richer than others. It is widely thought that the productive capacity of an economy will increase each year largely due to improvements in education and technology. This will obviously differ from country to country. For example, in the UK the quality of fertilizer could be improved, hence forth increase the years fruit and vegetable output.
Greece has emerged as one of the fastest growing economies in the EU since the mid-1990s when it has recorded strong GDP growth, significantly outperforming EU averages. Greece was one of the fastest growing countries in the Eurozone with an annual growth rate of 4.3 % from about 2000 to 2007 compared to Eurozone average of 3.1...
Germany 16%, UK 10%, Italy 9%, Spain 8%, Belgium-Luxembourg 8%, US 6.5%, Netherlands 4.5%, Japan 2%, Russia 0.9% (1997)
...ries such as Spain, Belgium, UK, Japan, and China. Future growth can be obtained through positioning current brands in those emerging markets.
"An international currency can be defined as a currency that is used by residents outside the country of issue. It performs the same functions as that of any other national currency- as a medium of exchange, store of value, and unit of account" (Wong &Khan, 2006). Hartmann and Issing (2002) cite the following factors as key to determining the choice of international currency: (1) the size and strength of the domestic economy (2) the depth, breadth, liquidity and degree of openness of the domestic financial markets (3) the convertibility of the currency (4) historical bias. The euro has made considerable developments as an global financing currency. "Recent years have seen an increase in the net issuance of euro-denominated bonds over that of the dollar" (Wong & Khan, 2006).
The European Union has a population that has about 160 million more people than that of the United States (www.internetworldstats.com/stats4.htm). With their willingness to work together the sky is the limit for this union of countries. There were some doubts about what would happen with the addition of 10 new member states and what could happen to them as well as the old members economically. Would these new members drag down the prosperous European economy? The answer to that is no. Economically the gains are quite clear for these new EU member countries. Last year they saw their collective GDP rise 5 percent, from the 3.7 percent the year before. Further more many economists are predicting further increases of more than 4 percent in the year of 2005. With this rapid increase of GDP it is increasing at more than twice the rate of the old 15 European Union members. Individually these countries have also been having great economic success. Latvia’s GDP is estimated to have grown around 8.5 percent. Not to mention that half of the new member countries have had more than double the increase than that of the average increase for EU countries which is about 2.4%. (europa.eu.int/enlargement/memo_en.htm).
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Also, There is a vast concentration of larger number of immigrants in some already populated countries such as UK. Not all the countries have the same language which makes difficult to get jobs in other countries. Similarly, the use of the Euro, regulated by ECB as a unique currency means that the interest rates are the same for the whole Zone. Another setback for the Eurozone is the competitiveness because the lack of devaluation. When countries have their own currency, companies can place their products where they may generate a better profit due to devaluation. As well, the continuous increment of the labor salaries in front of economies as Chinese, where workers have low salary, decrease