Social: plant in Kigali (BRALIRWA , 2017).Bralirwa

Social:

Degree of education is composed of young graduate as a result
of government commitment in education, BRALIRWA when expanding it plants labor
market is available. It is estimated that 32.77 % of Rwandan are between ages
of 25-54 in the year 2017 so demography shows that there is a market potential. (The world
fackbook, 2017)

 

Technology: As result of country growing technology,
In BRALIRWA technology is a key where it use upgraded system bottling and
advanced technology system of  Qualass
system brewer quality control (BRALIRWA, 2017)

 

Environment

 

·       
Environmental protection: in line with government program of environmental protection,
in 2006 Bralirwa start a program of tree planting in all province through the
partnership with local residents more than 2 million of tree have been  planted in Nyagatare, Runda, Kamonyi,
Bugesera and Kicukiro Districts. (Hope Magazine, 2017)

 

 

·       
Waste water management and recycling: To meet the environmental requirement
of the government of Rwanda to conserve beautiful nature, in 2009 Bralirwa
invested in construction of a modern waste water treatment plant in Kigali (BRALIRWA ,
2017).Bralirwa
has a partnership with a Tanzania glass manufacturer company KIOO Limited this
company receive crushed glass from BRALIRWA then transform it into new bottles
then sold back to BRALIRWA. (MAGAZINE, 2017)

 

Legal

 

BRALIRWA is regulated by different government agencies to
ensure the respect of law and regulations which include regulation of quality
control and quality assurance of product and protects consumers against hazards
to health and safety,laws regulating taxes, laws regulating protection of
environment. changes in laws and regulation can affect company business (i.e increase
of import taxes applied to alcoholic beverages affect company business )  (BRALIRWA, 2017)

 

 

 

 

 

 

 

 

 

 

 

 

2.2. PORTER’S 5 FORCES ANALYSIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                       Barrier
to entry: High

 

·       
BRALIRWA
is in brewery market since the last 60 years. It has a strong recognition in
Rwandan Market and its PRIMUS brand is regarded as flagship Rwandan beer brand (BRALIRWA,
2017).
Not easy for new entrant in brewery market.

·       
Company
has a strong distribution network which cover the entire country and its
distribution centers (warehouses) are strategically located to ensure product
availability to consumers (BRALIRWA, 2017).High cost of
investment in warehouse construction

·       
Company
has two production plants one in Gisenyi for beers and another in Kigali for
non-Alcoholic drinks (BRALIRWA, 2017) .To invest in plants
construct require a high cost of initial investment

 

 

 

 

 

Competitive rivalry: High

 

·       
Stiff
competition in brewery market since Rwanda enter EAC market

·       
High
exit barrier due to high cost of initial investment.

 

Supplier power: High.

 

·       
PRIMUS
and MUTZING brand are leading brands in beer market and have a combined share
of almost 88 percent of market share (BRALIRWA, 2017)

 

Buyers power: High

 

·       
BRALIRWA
cover the entire country and its distribution centers are strategically
located. Company products are available to consumers

·       
PRIMUS
and MUTZING brand are leading brands in beer market and have a combined share
of almost 88 percent of market share (BRALIRWA, 2017)

 

Threat of substitute: Low

 

·       
No
close substitute in non-alcoholic drinks

 

 

2.3. SWOT ANALYSIS

 

The SWOT Analysis I will look at company strengths, Weakness,
Opportunity and Threats.

 

Strengths
·       
Largest market share in industry (cover the entire country and its
distribution centers are strategically located)
·       
Product portfolio which include beers and Non-Alcoholic drinks
·       
Production Facilities (2 Plants Beers plants at Gisenyi and
Non-Alcoholic drinks at Kigali)
·       
Trade mark Licensing agreement with global company such as, Guinness
overseas limited, Amstel Brouwerijen B.V. Company, Mützig
International, Premium Beverages International,
 
 
·       
Distribution and bottling agreement with global company such as
Heineken group and Coca Cola Company.

Weakness
·       
Main raw material imported from abroad.
·       
No distribution centers at districts level
 

Opportunities
·       
Potential market in East African region (Burundi and Democratic
Republic of  Congo)
·       
Fastest growing of Technology in country.
·       
Existing government Policy for tourism promotion industry.
·       
Political stability

Threats
·       
High tax rate applied on excise duties on Alcoholic beverages
·       
Entry of competition due to  Regional integration
·       
High cost of raw material importation due to landlocked nature of
Rwanda
·       
High cost of energy
 
 

 

3. INTERNAL ANALYSIS

 

3.1. Company competitive Strengths

 

Despite the increase of competition
in brewery market in the region, BRALIRWA retain its market share for the
following reasons (BRALIRWA, 2017)

·       
Brand loyalty: Being monopoly for the last 53 years
BRALIRWA build strong brand recognition in Rwandan market (BRALIRWA,
2017).

·       
Distribution network: Company has a strong distribution
network which cover the entire country and its distribution centers
(warehouses) are strategically located to ensure product availability to
consumers (BRALIRWA, 2017)

·       
Marketing strategy: Company marketing its product in
local language “Kinyarwanda” so that it can be understood by every Rwandan
company also market its products through innovative sponsorship targeting a
wide audience such as PRIMUS National football League and PRIMUS GUMA GUMA
Superstars in music industry (BRALIRWA, 2017).

 

3.2. Company flagship beer brand

 

Company
flagship beer brand PRIMUS is the first beer produced since its establishment
in 1959 (BRALIRWA, 2017).The success story of
company flagship beer brand is proven by the following factors:

·       
PRIMUS
is resulted to become a national beer because the company used the most
frequent words such Gahuza Miryango which means building a strong family and
Dusangire Ubuzima bwiza which mean people stay healthy that are used in the
cultural ceremonies such as weddings, new born celebration, baptism celebration
etc

·       
PRIMUS
is a regional brand of Heineken group as it produced in Rwanda, Burundi, Congo
Kinshasa, Congo Brazza so people from those countries when comes in Rwanda
takes PRIMUS beer (BRALIRWA, 2017)

·       
Company
brand building is based on PRIMUS brands such as PRIMUS National football League
and PRIMUS GUMA GUMA Superstars in music industry (BRALIRWA, 2017)

·       
PRIMUS
is seen as beer that has a greatest consumption in Rwanda,so company decide to
upgrade its bottling system to meet customer purchasing power at all levels  and is bottled in 72cl, 50, cl, 33cl.

 

3.3. VRIO Frame work of BRALIRWA

 

Resource/Capabilities

Valuable?

Rare?

Costly to imitate?

Exploited by organization?

Competitive advantages

Flagship
beer (PRIMUS)

Yes

Yes

Yes

Yes

Sustained
competitive advantage

Brand loyalty

Yes

Yes

Yes

Yes

Sustained competitive advantage

Corporate
culture

Yes

No

No

Yes

Temporary competitive disadvantages

Efficiency

Yes

Yes

Yes

Yes

Sustained competitive advantage

 

VRIO framework analysis of BRALIRWA shows that company  competitive advantages relies on capabilities
of its strong brand loyalty and flagship beer (PRIMUS) which is considered as  a national beer and the company valuable would
rely in promoting so aggressively this flagship beer (PRIMUS) which resulted to
become the synonym of beer because
of whenever you order a beer is understood that you would like PRIMUS and the
most frequent words (Gahuza Miryango and Dusangire Ubuzima bwiza) are used in
the cultural ceremonies such as weddings, new born celebration, baptism
celebration etc and this give company value, this is similar to the example
discussed in class of Cirque du Soleil valuable relies on the team that chose the
athletes from all over the world and not the athletes as we could think.

 

4. BUSINESS STRATEGY

 

In this section I will focus on
company’s product differentiation and cost leadership strategies.

 

4.1. Cost leadership

 

As discussed earlier company has two
production site one for beers in Gisenyi and another one for sparkling
beverages in Kigali, beers plant are located in Gisenyi due to following
reasons:

 

·       
Cutting
distribution cost of transport, transport will be made by water, and it will be
easier for the company to distribute it products to Goma , Bukavu and Buvira in
Democratic Republic of Congo, Bujumbura in BURUNDI Kibuye and Cyangugu in
RWANDA

·       
Cutting
cost of energy, lake Kivu has a large quantities of gas methane company extract
gas methane from lake Kivu to run it manufacturing process (Wikepedia,
2017).

·       
Cutting
cost of water because company use water from lake Kivu.

 

Due to high volume
of Production Company hence company has a significant economies of Scale.

 

4.2. Product differentiation

 

BRALIRWA has
two production plants one of beers in Gisenyi and non-alchoholic drinks plant
in Kigali, company avail it products to its customer around the country through
distribution centers and put in place a strong distribution channel including
independent persons who owned their warehouse or stock point they work as
company distributors and company control if they meet company specific standard
and service level. Company Logistics department is responsible to ensure that
the specific standard and service levels and gives advice on overall running of
their enterprises. Company divides its distribution centers into regions (BRALIRWA,
2017)

Source: (BRALIRWA, 2017)

 

As shown on above map company has
distribution centers in all Provinces around the country.

Company is the one of key
stakeholders of government in environmental protection and social economic
transformation and contribute to the National development program and ensure
its reputation to the larger community in which its operate (BRALIRWA,
2017).

 

Environmental protection: In 2006 Bralirwa start a program of tree planting in all provinces
through the partnership with local residents more than 2 million of trees have been
planted in Nyagatare, Runda, Kamonyi, Bugesera and Kicukiro Districts. (Hope Magazine, 2017)

 

 

 

In above
picture Bralirwa employees are planting trees in Runda, Kamonyi district (BRALIRWA, 2017)

 

Socio-Economic transformation: By supporting vulnerable women in Rwanda BRALIRWA in partnership with Coca Cola group
through it 5*20 Project, in 2014 50 women are trained in
districts of Musanze, Nyanza, Ruhango, Gakenke and in Kigali city on how to
manage business successfully and they get capital to start up their business
project of cold drinks and improve their standard of living and support their
families. (Hope magazine, 2017)

 

 A group photo of women beneficiaries of 5*20
Project launching (Magazine, 2017)

 

Education: By supporting government in
education sector Company built a primary and secondary school in Gisenyi near
brewery in which children of company employees and other living near the
brewery could attend. (BRALIRWA,
2017)

 

Health: Through Heineken
international affairs department and Heineken group Africa, company receive a
fund of 600,000 euro to produce 140,000 mosquito nets, this is in line with
company core mission and values on improving health of its employees and external
community, the received fund was given to local textile company UTEXRWA to
produce mosquito net and give it to the ministry of health for distribution to
the local community. (BRALIRWA, 2017)

 

5. CORPORATE STRATEGY

 

Trade mark license

 

BRALIRWA has a trade mark licensing with big
company in brewery industry

·       
Licensing agreement with Amstel Brouwerijen B.V. for Amstel
beer trade mark (BRALIRWA, 2017)

·       
Licensing agreement with Mützig International for Mutzing beer
trade mark (BRALIRWA, 2017)

·       
Licensing agreement with Premium Beverages International for Turbo
king  beer trade mark (BRALIRWA,
2017)

·       
Licensing agreement with Premium Guinness Overseas Limited for
guiness beer trade mark (BRALIRWA, 2017)

 

Distribution
and bottling agreement

 

Company has a
distribution and bottling agreement with Heineken group for distribution of
imported Heineken beer and agreement with Coca cola company of bottling and
distribution of  its products (i.e.  Coca cola, Fanta, Sprite and Krest) (BRALIRWA,
2017)

 

Joint venture

 

Most of company raw
material is imported from abroad, in order to reduce and secure sustainable
supply of maize used in brewery company decide to use maize grown in Rwanda, to
achieve this company formed a joint venture with Minimex the leading maize
growing in Rwanda (BRALIRWA, 2017).

 

Recommandations

 

·       
BRALIRWA is facing increase of competition in the region and
there is also a potential market in East region (i.e Republic Republic of Congo
and Burundi ) my recommendation is to increase its distribution network by
construction of warehouse at district level (in every district)

·       
Introduce production of less alcoholic beers for weak people
(i.e Women)

·       
Increase maize production farm to meet its local raw material
needs