ANALYSIS OF SABMiller’s DIVERSIFICATION AND COMPETITIVE STRATEGIES INTRODUCTION SABMiller PLC is a global giant in the brewery industry and has a track record of innovation and growth. Being one of the world’s biggest brands, SABMiller has adopted a unique style to ensure competitive advantage and remain at the forefront of the brewing world. Key to its developing and maintenance of relevance are its values and strategic priorities Values include: Recognition of people being an enduring advantage Emphasis on accountability Teamwork Respect for consumers and customers Indivisibility of reputation Strategic priorities include: • Creating a balanced and attractive global spread of businesses • Developing strong, relevant brand portfolios that …show more content…
The number of joint ventures in its Financial Statements further buttresses this point as its operations significantly involve other entities. The acquisitions mentioned in the Financial Statements are also significant. Different climes would require different strategies for success and so to keep at the forefront in global business, the adoption of a flexible growth system is critical to maintaining the success enjoyed by SABMiller. COMPETITIVE STRATEGIES A competitive strategy means ‘taking offensive or defensive actions to create a dependable position in an industry to cope with... competitive forces and thereby yield a superior return on investment for the firm. Firms have discovered many different approaches to this end, and the best strategy for a given firm is ultimately a unique construction reflecting its particular circumstances ‘. (MICHAEL PORTER) Strategies can be one of; A) COST LEADERSHIP: means being the lowest cost producer in the industry as a whole. B) DIFFERIENTIATOR: is the exploitatation of a product or service which the industry as a whole believes to be unique. C) FOCUS: involves restriction of activities to only a part of the market (a segment). SABMiller as an international brand and based on the financial statements given in the case study has successfully adopted a mixture of being both a cost leader and a differentiator in exploiting opportunities such as economies of scale and scope, premium quality
Which of the following factor(s) is (are) likely to be significant for a firm with a successful cost leadership strategy?
Operational excellence. Many industry players are facing strong competitive pressure, so cost leadership is another key to success.
Our strategy is to have the best and necessary brands - Guinness Director. Vanguard, 2013. Vanguard News. [ONLINE] Available at: http://www.vanguardngr.com/2013/01/our-strategy-is-to-have-the-best-and-necessary-brands-guinness-director/
distributors, brewers and retailers. A change suggested in Grolsch’s historic strategy is not to adapt the market completely in this case because it is an industry that gives importance to the country-of-origin. Markets Targeted: South Africa: Monopoly Market, No.1 SABMiller (Market Share: 98%) Brazil: Occupied by major Brewery Groups. China: Competitive Market. How to Compete: South Africa Brazil China Additional Line with SABMiller Co-Promotion with SABMiller
A competitive strategy, or business-level strategy, is the way a business used to successfully enter and penetrate into a market (Eastwood et al, 2006), and also, to succeed in this chosen market against its competitors (Johnson et al, 2014). A company needs to develop and apply appropriate strategy to help the company to generate distinctive competences (David, 2007). Compared with the strategies implemented in other levels of operation, competitive strategy is more focused on the competition against other competitors and strategic choices to better attain market share (Harrison and St. John, 2009). According to
Competitive strategy, after Porter, came to be defined as the strategy of a business unit which seeks to achieve sustainable Competitive Advantage (SCA). The literature on strategy deems the market-based view (MBV) and the resource –based view (RBV) as two approaches to giving businesses the competitive edge they need to compete in their industries. Aside from having competitive advantage as their ultimate goal, the two approaches are also similar in the sense that they both make use of particular tools and models in their undertakings. They also differ in numerous ways,
A successful competitive strategy focus on creating value to customers, by efficiently use and integrate of these components.
A competitive strategy is a plan of action that a company develops towards attaining a competitive advantage over its competitors in the industry. Companies examines and research their competitors strengthen and weaknesses and compare them to its own. A company strategy can incorporate efforts to please customers, ward off competitive threats, and meet a unique competitive advantage.
According to Porter (1985) a company can apply three generic types of strategies to protect itself while competitive force is a key issue of the management. To achieve this position a strategy based on competency must be accomplished
Another strategy is Being defensive ; Defensive strategies are relatively close to Differentiation & Cost leadership . This method helps in keeping all the advantages in one place once they are attained . This strategy is considered as an actual one as it limit competitors ability to offer a business opposition .
Anheuser-Busch Inbev is one of the largest breweries in the world. “Currently, Anheuser-Busch InBev has a product list of more than 200 beers, including global best-sellers Budweiser, Stella Artois, Beck’s, multi-country brands like Leffe and Hoegaarden, and strong “local jewels” such as Bud Light, Skol, Brahma, Quilmes, Michelob, Harbin, Sedrin, Cass, Klinskoye, Sibirskaya Korona, Chernigivske, and Jupiler, among others that have helped to make the company so successful. In addition,
Alfred Chandler(1963) defines strategy as ‘ the determination of the long-run goals and objectives of an enterprise and the adoption of courses of action of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals’. And Michael porter(1996) sees it as ‘Competitive strategy is about being different. It means deliberately choosing different set of activities to deliver a unique mix of value’.
Strategy can be defined as being different from one’s competitors, finding the race to operate and accomplished it. According to Michael Porter (1996), while becoming better at what you do is desirable, it will not benefit you in the long run because it is something other competitors can also do. Strategies for organizations are originally developed by Michael E. Porter in 1979 by introducing the five forces model. A company can identify the industry profitability and attractiveness by analyzing the five forces of Porter (Johnson et al., 2008). And then a reasonable strategy can be set up in line with the strengths and the weakness of an organization is able to create a plan for a stronger position for the organization within its
Competitive strategy is the moves and methods that the firm has taken and is taking to appeal buyers, improve its market position, and to endure competitive pressures. The strategy is about what a firm’s capability to try to knock off competitors and attain competitive advantage, which can be offensive or defensive. There are three approaches to competitive strategy, which are low-cost leadership strategy where struggling to be the overall low-cost manufacturer in the in industry. Moreover, pursuing to distinguish one’s product offering from competitors (differentiation strategy), and the last one is focus or niche strategy where aiming on thin portion of the market rather than the whole market (Porter, 1998).
Chapter Five describes the five basic competitive strategy options – which of the five to employ is a company’s first and foremost choice in crafting overall strategy and beginning its quest for competitive advantage.