Corporate Strategy SAB Miller
Assignment by Matthew Jackson
Table of Contents: Page 1. Assignment Cover Sheet 3 2. Question 1 4 3. Question 2 5 - 8 4. Question 3 9 - 11 5. Question 4 12 6. Question 5 13 - 16 7. Bibliography 17
Surname: Jackson
First Names: Matthew William
Subject: Corporate Strategy
Date Submitted: 2008.05.05
I hereby declare that the assignment submitted is an original piece of work produced by myself.
Matthew Jackson
7512235009088 2008.05.05 Question 1:
Critically analyze SAB’s Globalization Strategy in the food and beverage industry.
Support your presentation with relevant theories and/or models.
Introduction
South
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Thompson, Strickland and Gamble (2008) discuss the four major reasons why companies expand into foreign markets. Globalization was the logical choice for SABMiller since they were under pressure from the South African economic and political environment to find healthier profits and new markets elsewhere.
Thompson, Strickland and Gamble (2008) state firstly that expansion takes place because they want to gain access to new customers, achieve lower costs and enhance the company's competitiveness. SAB state on their web-site” Beer tends to be a local business, subject to local tastes and legislation. Leveraging scale, therefore, is not simply a case of putting two or more businesses together and saving costs. While some such synergies are possible, the real benefits arise in driving sales using our scale to grow the business. Our global reach provides a valuable platform for distributing and selling our international premium brands’.
SABMiller secondly capitalized on their core competencies as Thompson, Strickland and Gamble (2008) suggests. The SABMiller web-site state “It also helps as we develop regional brands such as Kozel in Europe and Eagle in Africa. It is possible for individual businesses to select particular beers from our global portfolio and apply them in their own markets as Miller.
Our global scale allows us to share brand innovation. We use our scale to help us grow by transferring skills, methods and technologies around the
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
I certify that the writing in this assignment is my individual work and is my sole intellectual property. It does not contain the ideas, or writing of other individuals/authors.
I certify that the writing in this assignment is my individual work and is my sole intellectual property. It does not contain the ideas, or writing of other individuals/authors.
I certify that the writing in this assignment is my individual work and is my sole intellectual property. It does not contain the ideas or writing of other individuals/authors.
I declare that this assignment is my individual work. I have not worked collaboratively nor have I copied from any other student’s work or from any other source except where due acknowledgment is made explicitly in the text, nor has any part been written for me by another person.
I confirm that I have read the University regulations on plagiarism, and that this assignment is my own work.
Declaration of ownership: I declare that the attached work is entirely my own and that all sources have been acknowledged.
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.
I certify that the work submitted for this assignment is my own. Where the work of others has been used to support my work then credit has been acknowledged.
Grolsch, a company with a strong history and a highly rated product, has just been purchased by SABMiller. The company is evaluating its global strategy in light of the acquisition and determining how to position and sell its beer going forward. Grolsch has positioned itself well to compete internationally and has leveraged several tools (e.g. the MABA framework, strategic analysis) to effectively expand abroad. However, they must assess whether or not the MABA framework is still useful, what type of international strategy they should pursue (i.e. developed vs. developing markets), and if their adaptation strategies will continue to be an asset in their business development. The initial conclusion, detailed below,
As discussed in Chapter 21 of our text book, any company that is looking to expand globally must make five key decisions. A firm must decide if: a) they really want to expand to the international market; b) they
Despite the dominance of Carlsberg, in its annual report BGD could lay claim to being the largest Scandinavian beer exporter. This was because Carlsberg placed emphasis on licensing agreements or local production for its foreign markets, while BGD’s strategy was export led: ‘Eighty-three out of every hundred bottles of beer that we produce are sold in foreign markets.’ By 1995 the percentage of export sales by region of the world was as follows: western Europe 63 per cent, the Americas 10 per cent, eastern Europe 22 per cent, others 5 per cent. The development of BGD’s operations in some of these markets is now reviewed.
Reasons why corporations like PepsiCo. need to globalize their operations include a need for competitive advantage against rivaling companies, increase their economies of scale to lower their production and distribution costs in moving products into new and existing markets, entering new markets to increase brand image and brand loyalty, and to increase net earnings which can then be distributed as dividends for their stockholders.
|The global beer industry is dominated by large corporations who have merged with rivals to increase their global and domestic market share. |
I hereby declare that all the work is my own , when I have referred to the work and ideas of others, I have referenced it accordingly.