Sabmiller Case Study Sabmiller Breweries Company Case

Sabmiller Case Study

SABMiller Breweries Company Case Study

SABMiller Breweries Company

SABMiller Breweries Company

SABMiller breweries Company has grown since it begun over the years adopting different business strategies for its survival in the market. Surrounding environmental factors have affected its growth, and strategies that are put to counter different environmental situations. SABMiller is a South African company with its base in Johannesburg. It grew to being the second largest brewer company in the world.

Corporate logic

During the twentieth century, SABMiller's operation faced difficulties due to the apartheid regime. South Africa faced economic sanctions due to the apartheid regime which restricted them from doing business with, external international, markets. SAB moved their capital from London to their homeland Johannesburg to enable them operate with the sanctions. SAB prioritized Domesticconsumption to keep the breweries running. SAB concentrated most of its activities in southern parts of Africa hence expanding its market. It also tried to acquire licenses for brewing local drinks like Guinness. SAB tried to acquire local wineries as a course of their expansion strategy. By 1979, SAB was widely known in Lesotho, Botswana and Rhodesia while being the most distributors of drinks in South Africa estimated its distribution to 99%.

SAB invested further to joint ventures and beverage sector for expansion, like; the development of SAB's high profiled Sun City and Resort. SAB formed a nondiscriminatory code which increased its diversity despite the code not being particularly helpful in decreasing discrimination. With the introduction of multiracial democracy, SAB used the opportunity to expand across South Africa, by putting up three mega-breweries. The change in political weather eased up SAB's activities enabling expansion throughout Africa. The company's popularity in South Africa gave it an added advantage over the competitors as they had little chance of improving to overcome SAB.

SAB has developed due to careful choice of markets; they choose only potential markets in growing economies. They have also grown due to the high quality of their beer, which beats local bears. They have collaborated with local brewers retaining their brand and the locality of the brew making them widely acceptable; they upgrade the consistency of local brew and quality and then distribution. They have achieved this by improving their portfolio of the business; they start from gaining trust and popularity from the local level, regional, then progress national level. This helps them by finally increasing their distribution and production. SAB has managed these achievements keeping up with policy requirements and dealing sensibly with their community and workforce. Basing beer distribution and branding on decentralized management systems increased overall improvement.

SAB in 2002 acquired a first world brand by merging with Miller brewing company increasing the growth and access to the international market. When SABMiller's market share dropped a year later, SAB introduced an employee rating and performance system. Miller kept in place a strategic plan for the brands to be at eleven or twelve brands from fifty, this was to make the market price to go down before it could rise again. By 2006, SABMiller put up strategic plans, which would enable it to grow in the future. This included yearly pricing for protection of brand quality. Re- Launching of Miller's different brands have led to increased sales and distribution. After miller had achieved establishing its market in the developed economies, it strategized back to the developing economies. For managerial positions managers need to have tertiary qualifications. They recruit for talent and potential staff with technical skills in alignment with potential.

SABMiller's position in 2004

In 2004, SABMiller faced a hostile takeover of their Chinese company by a foreign firm. SABMiller accepted to sell their company Harbin to Anheuster-Busch because the market share was to be more than twice of any other competitor in china. They also said that Harbin's growth was not potential hence it was not significant for the growth strategy in China. Selling the company reduced their chances of growth in china considering that china is a highly attractive market. In Russia Miller was the fourth largest brewer while looking for acquisition of potential targets in western markets. This gave it a potential of improving to the leading brewer in Russia. Increasing its ventures in India gave Miller potential for further growth.

Miller was performing well with increased market worldwide like Peru, Columbia and Panama hence putting it at apposition where it had a potential of growth. Improvement of SAB's quality and market brand has increased its dominance in Asia and Africa, while being acceptable internationally. Miler Lite in America boosted SAB amidst its aim of acquiring hard currency.

Worldwide shortage of employees forced companies to reemploy old labor in South Africa. This labor is characterized by non-flexibility and resistance to technology. Critical shortages of engineers in South Africa drew retired engineers back to work. Racial ethnicity still existed in South Africa and job positions given according to race; recruitment and promotions were race-based hence affecting company performance. HIV / AIDS affected South Africa adversely hence threatened the market position of SAB.

Strategic position

SAB has put a strategic plan, which will help it to turnaround. This will be possible due to its capability to survive over the years with different strategies in place. It will be possible due to the international brands portfolio, and geographical widespread of its products in many continents and especially the western markets. They are unlikely to be faced with the challenge of market acquisition in western countries in, Asia and Africa. Stakeholder demands give it a potential growth due to their demand on hard currency in the western countries other than developing countries. Miller's investment in other businesses like hotelsincreased it's likeliness to continue dominating.

SABMiller has influenced market practices due to the large operation in western markets. It is the second largest distributor in America; it controls more than 50% of the market n Brazil, Venezuela, Argentina and Peruvian markets. Launching carried out improved consumer purchase while making it an inspirational beer. SABMiller has had national campaigns in some countries; it has room for improvement and due to its wide range of brands and corporate markets with the strategies put in place. There has also been wide marketing campaigns increasing their sales and popularity. SAB has to come up with strategies to counter the problems arising from a large market acquisition; to enable them distribute their products effectively and to deal with different environments affecting product consumption, production and distribution.