. What is the basis for competitive advantage in the brewing industry?
Answer: The basis of competitive advantage for brewing industry is expanding its distribution chains with acquisitions or collaborations and mergers in exotic locations, logically controlling the cost of distributions, recognizing the appropriate market for beer segments and making products readily available and accessible to consumers. As the basic process of beer making is quiet straight forward and maintaining quality control and ensuring costs are closely managed in the production is challenging aspect of the brewing industry. Introducing new brands, setting a trend and keeping the established brands image fresh are also important for advantage.
2. What was the strategic rationale for the deal?
Answer: Inbev aimed for top line growth and strong brand equity. It targeted goal of strengthening the position in developed market and maximize its growth. Inbev had a minor position in United States market, which was one of the largest and fastest growing beer markets. Anheuser-Busch dominated the US market. So, the deal was made to capture the US market and save cost significantly and achieve greater geographic stability. At that time, the dollar value was weak too and could be the reason to deal that time. Not only for Inbev, the deal was fruitful for Anheuser-Busch too. The deal would create a good economic value. Anheuser-Busch international presence lags Inbev and SabMiller, the deal would diversify its global footprints. The combination will create the global leader in the beer industry and one of the world’s top five consumer products companies.
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