3.

2 External Environment
3.2.1 Economic and Political Home Country Environment
The home country environment of Heineken is its country of origin, the
Netherlands.Economically, Tthe Netherlands is a country with a high GPD per
capita ($39.000 in 2009), and a relatively low unemployment rate (5%). It is
ranked 7th on the list of export leaders, with exports around $397.6 billion in
2009. The economically stable and strong position of the
Netherlands,Netherlands and especially its high number of exports probably will
notwon’t present a threat to Heineken in the future.
The Netherlands is a constitutional monarchy and parliamentary democracy with
a relatively high number of different political parties1. Recently, the country is
facing political instability, with their government collapsing in February 2010 over
troop deployment in Afghanistan2, and the conservative right party from Geert
Wilders gaining more and more popularity; recently, they got the majority of
votes in the regional elections in Almere and Den Haag3. The political instability
and trend towards extremist partiesy that the Netherlands is experiencing, might
pose a threat to Heineken, since most of the beer it sells in Western Europe is
exported from the Netherlands.

3.2.2 Economic and Political Host Country Environments

In this section, Oonly two regions in which Heineken operates will be considered:
The European Union, and Nigeria, which area relatively flexible and fast growing
markets for Heineken. These two regions are both transforming into very
promising and profitable markets for Heineken, despite their political and
economic differences.

The European Union was founded in 1992. It consists of 27 member states, and
has the characteristics of a free-trade association4, which poses an advantage to
trade without trade-barriers within member states. It is, however, more and more
moving towards nation-like characteristics, the most important one being that it
got its own currency,the euro-, in 1999. The change of currency affected many
European companies positively, one of them being Heineken, whose net profit
rose 16% in 1999, from which 2% of increase were due to exchange rates 5. The
GDP per capita in the EU is $32,700, with high variations among member states.
Its exports in 2007 accounted for $1.952 trillion, and its import $1.69 trillion,
ranking it the region with the most exports and imports worldwide. 6 The stability
of economy and politics in the EU makes it a market that is maintainable without
high risks and economic capacity.

1 www.cia.gov

2 www.timesonline.co.uk

3 www.guardian.co.uk

4 www.cia.gov

5 www.heinekeninternational.com/

6 www.cia.gov
Nigeria is, with 149,229,090 inhabitants7, Africa’s most populous country.,
wWhich is one of the reasons why it is such an important market for Heineken8.
Its GDP per capita is $2,400, which is, compared to the EU, relatively low, but
compared to most other African countries, relatively high. Nigeria is a very oil-
rich country and, after years of economic mismanagement, is now on the track of
enforcing economic reforms. In 2003, for example, the government introduced
the National Economic Empowerment Development Strategy (NEEDS)9, an
economic reform plan. Nigeria is a federal republic since 1999, with relatively
high political stability. Before, since its independence in 1960, Nigeria had a
military regime, that was responsible for the economic mismanagement. It is no
coincidence that Heineken decided only in 2000 to expand its activities in
Nigeria10. Currently, Heineken is the leader in the beer market of Nigeria. Yet,
with a growing middle class and economic position, the market still offers many
opportunities to them.

7 www.cia.gov

8 www.heinekeninternational.com

9 www.enigeria.com.ng

10 http://www.heinekeninternational.com/content/live/files/downloads/History%20of
%20Heineken.pdf