Reinventing the San Miguel Corporation
Reinventing the San Miguel Corporation
Synthesis
Eduardo Cojuangco, the CEO of San Miguel Corporation, is re-assessing the company‟s business strategy. The flagship product of this century–old conglomerate, San Miguel Beer, is expected to post a slower growth rate in its volume share because of its large market share. Th e company has operations in only three product areas – food, beverage and packaging, and has a modest international presence. In this regard, Cojuangco announced in 2007 that the company would diversify into non-allied businesses in the Philippines such as energy, mining, infrastructure and other utilities. With the goal of establishing presence in industries that present fast and high growth, it sold off its international assets and started acquiring shares in Meralco and Petron Corporation.
The company also ventured into telecommunications and infrastructure. Credit rating agencies were uncertain about this new business model, and this resulted to a downgrade of San Miguel‟s credit rating and lead to a fall in the company‟s stock price. As of 2009, the com pany‟s reinvention was far from complete and Cojuangco needs to evaluate whether or not San Miguel‟s radical diversification plans were indeed the right step for the company.
Point of View: Eduardo Cojuangco - CEO of San Miguel Corporation
Problem Statement:
How should San Miguel adapt to the current changing times when it comes to its company strategy? Objectives
For San Miguel corporation, (and not exclusively as a beverage entity), to expand market share, to multiply their current scope, to grow their products-services portfolio, and to increase sales.
To assess whether the current business strategy is appropriate given the current business situation and determine the right business strategy
To achieve business growth and ensure profitability of business operations
Areas of Consideration
Expertise/core competency of the company – San Miguel is known
Synthesis
Eduardo Cojuangco, the CEO of San Miguel Corporation, is re-assessing the company‟s business strategy. The flagship product of this century–old conglomerate, San Miguel Beer, is expected to post a slower growth rate in its volume share because of its large market share. Th e company has operations in only three product areas – food, beverage and packaging, and has a modest international presence. In this regard, Cojuangco announced in 2007 that the company would diversify into non-allied businesses in the Philippines such as energy, mining, infrastructure and other utilities. With the goal of establishing presence in industries that present fast and high growth, it sold off its international assets and started acquiring shares in Meralco and Petron Corporation.
The company also ventured into telecommunications and infrastructure. Credit rating agencies were uncertain about this new business model, and this resulted to a downgrade of San Miguel‟s credit rating and lead to a fall in the company‟s stock price. As of 2009, the com pany‟s reinvention was far from complete and Cojuangco needs to evaluate whether or not San Miguel‟s radical diversification plans were indeed the right step for the company.
Point of View: Eduardo Cojuangco - CEO of San Miguel Corporation
Problem Statement:
How should San Miguel adapt to the current changing times when it comes to its company strategy? Objectives
For San Miguel corporation, (and not exclusively as a beverage entity), to expand market share, to multiply their current scope, to grow their products-services portfolio, and to increase sales.
To assess whether the current business strategy is appropriate given the current business situation and determine the right business strategy
To achieve business growth and ensure profitability of business operations
Areas of Consideration
Expertise/core competency of the company – San Miguel is known
References: http://www.innovation.public.lu/en/ir-entreprise/techniques-gestion-innovation/outils-gestionstrategique/080907-Cycle-vie-eng.pdf http://www.quickmba.com/strategy/core-competencies/ http://www.ansoffmatrix.com/ Bruno Dyck and Mitchell Neubert. Management（Philippine Edition）. Cengage Learning Asia Ltd. Carl W. Stern, George Stalk - Perspectives on Strategy Essentials of Strategic Management, The Quest for Competitive Advantage, 3 rd Edition, by Gamble, Thompson, and Peteraf, McGraw Hill