Case Study on South African Breweries Ltd (Sab) Essay

‘Strategy is the direction and scope of an organisation over the long term, which achieves advantage in a changing environment through it’

     In this paper I will be talking about the U.S. beer industry and in short an overview of the brewing industry worldwide. I will talk about the barriers to entry, economies of scale, government intervention, pricing, current market trends, product differentiation, and imports. The focus being mainly on the U.S. brewing industry oligopoly. The U.S. brewing industry has three major players: Anheuser-Busch, SAB Miller, and Coors/Molson. Anheuser-Busch is currently the largest brewer in the world, producing over 100 million barrels a year. Anheuser-Busch currently owns over 50% of the market in the United States, with Miller trailing behind at 20% and Coors at about 11% with the rest of the market occupied by imports and craft breweries. When analyzing any industry, how easy it is for newcomers to enter the market is a great importance. If there are high barriers to entry

Strategy is a set of complicated tactics formulated by the executives of a company directed towards the achievement of company’s goal (Salmela, 2002). It is about all the path ways that a company would follow to reach its ultimate goal. It is a company’s strategy which helps to identify what it does better than the other companies in the industries, which may be different from what it does best. For successful strategy formulation and implementation, a company should know the needs of customers and should have knowledge of its competitors. Through a good strategy a company would identify that opportunity which makes it different from the others (Thompson, 2005).

- The recent market position of Samuel Adams beer is very strong, as well as growth prospects.

Chapter 6 – Strategy Formulation: Situation Analysis and Business StrategyChapter 7 – Strategy Formulation: Corporate StrategyChapter 8 – Strategy Formulation: Functional strategy and Strategic Choice

The New Belgium Brewing's tremendous growth to become the nation's third-largest craft brewery and the ninth-largest overall is a great reason for wanting to open the third brewery in its Fort Collins and Asheville locations. When indicating further interesting directions of the future research on the competitive advantage, it is worth considering the relationship between the competitive advantage, the strategy of success, the durability or variability of the competitive advantage and the repeatability or durability of the success in the competitive struggle (Soloducho-Pelc p.278). As a Chief Operating Officer, I would take a list of pros and cons from the internal environment, customer environment, and external environment that help makes

New Belgium Brewing Company is a craft brewery located in Fort Collins, Colorado. It opened in 1991 after Jeff Lebesch, the brewery 's founder, took his home brewing passion commercially. In 2011, it produced 712,800 barrels of its various labels. As of 2012, it was the third-largest craft brewery and eighth-largest overall brewery in the United States. [1]

Anheuser-Busch is a company that concerns itself with the manufacture, marketing as well as distribution of alcoholic beverages. Anheuser-Busch according to the company website, "is a wholly-owned subsidiary of Anheuser-Busch InBev" (Anheuser-Busch 2011). I chose Anheuser-Busch for this discussion based on its relative size and market share. Currently, the entity is considered one of United State's largest brewing companies. Hence it is likely that given its relative size and the huge chunk of the market it controls, Anheuser-Busch would have to contend with quite a number of economic issues. Indeed, the continued success of Anheuser-Busch in the highly competitive alcoholic beverages marketplace largely depends on how it handles these issues.

Anheuser- Busch is the largest beer distributing company in the world. This is because over the years dating back to 1852 they have been pioneers in both their product production and distribution. Over the years they have faced a lot of criticism and setbacks. Most notably during Prohibition from 1920 through the early 1930s. In 2008 they were bought by the European company InBev and currently hold 49.6% of the market share. Today through the modern era they have also been one of the most successful companies when it comes to marketing their products.

In the past 10 years, Anheuser-Busch has set its sights on capturing every stage of the brewing industry, starting with manufacturing, through distributors all the way to consumers. This began in 2008, as Anheuser-Busch merged with InBev to form the largest beer company in the world. Anheuser-Busch InBev then began buying up distributors and manufacturers throughout the world, threatening to overpower small local microbreweries like Listermann’s. This threat was enhanced in late 2016, as Anheuser-Busch InBev finalized its merge with the then second-largest beer company in the world, SABMiller. With these two significant mergers, Anheuser-Busch InBev now has the resources, money and reputation to launch a full-scale monopolization on the beer

Strategy formulation has been acknowledged as one of the most crucial factors of ensuring the long-term growth of the business. However, the manner in which strategy is formulated, and most importantly, the nature of the strategy chosen for the company determines its future position in the marketplace (Grant, 2005).

As the world’s largest brewer, AB Inbev has the ability to compete in new and foreign markets as a strong threat. Due to their enormous capital and expansion-based strategy, they can enter any market as a challenger and shutdown competition to become the leading brewer in this market. As an aggregated note we can also see this in domestic or already dominated markets because due to economics of scale they can achieve differentiated products at a low cost.

ABInBev is a multinational beverage and brewing company based in Belgium. It is the largest brewer in the world with a 20.8% market share (Statista, 2016) and is also one of the world’s top five consumer goods companies.

In the book “Good Strategy and Bad Strategy”, Richard Rumelt illustrates examples of success and failure of business management to explain the true meaning of the strategy, and tells companies how to develop a correct strategy and adhere to core of management strategy. He also emphasizes the central role of strategic management as to remind the readers to understand the huge difference between a good strategy and bad strategy. This book has three sections: good and bad strategy, sources of power, and thinking like a strategist. I will be evaluating strengths and weaknesses under these topics. After finish reading the book, I had gained a better understanding of what a good strategy means to the success of a company. According to Rumelt, a good strategy is coherent, where companies pursue multiple objectives that are connected with each other. Rumelt points out that a good strategy consists of three elements: diagnosis, guiding policy, and coherent action. (71) First, diagnosis means to define the obstacles and challenges that the companies are facing, and guidelines help the people to overcome the obstacles. Lastly, coherent action is the activities or actions that company did to be consistent with its guiding policy. Today, many of us lost the focus of the strategy, which results in the downward of businesses and organizations. Rumelt has defined the strategy as acknowledging the main problems and take coherent action to overcome the problems. Moreover, he illustrates

|Brewing has merged with Coors Brewing company and SAB to form one of the worlds largest breweries. |