Functional approach analysis6
Human Resource Management6
Research and development6
Unexpected Natural Catastrophe7
Cost Saving CAST7
Value Chain analysis9
Competencies geared towards emerging markets9
Resource based view10
Developing a Global Brand10
Emerging Markets the Major Profit Pool for Beer10
Intensified Competition in Mature Markets (EU and US)11
Hard currency earnings11
Decline in inward investment in South Africa11
Building critical mass and portfolio extension11
Internal Factor Matrix Evaluation on SAB (IFE)13
SAB has a lot of strengths such as geographic reach, large portfolio of products, widespread distribution network, environment efficiency, alliances/joint ventures, focused low cost, and strong management team. SAB operates in over forty countries and is continually looking to expand into new markets. SAB has over a thousand products in its portfolio that take in account peoples different tastes or preferences. SAB has a low cost production strategy that is a core competence that it has over competitors. Strong distribution networks enable SAB to distribute their products efficiently through markets. SAB is conscious of its environment and limits it waste by recycling 90% of its operations. Alliances and joint ventures in China have enabled SABMiller to become leading international brewer in China with a 33% market share.
SAB has some weaknesses such as no clear dominant brand name, advertising, currency fluctuations, and reliance in South Africa. If you look at competitors of SAB and their brand names such as Budweiser, Bud Light, and Heineken, these products are known worldwide. SAB has Miller, Miller Light, and Castle Lager that are well known in home markets but not as much in international markets as the rival brands. SAB needs to advertise more to gain brand recognition. How many people in the United States have heard of Castle Lager which is the leading beer being consumed in Africa? Not many, and SAB should begin focusing on promoting several of its products global to increase sales and brand loyalty. SAB has operations spread across the world that uses different currencies. Fluctuations in currency can cause discrepancies in the balance sheet that underestimate/overestimate actual earning at SAB. SAB holds a ninety percent market share in South Africa, “Achilles heel,” that can become attractive to rival brewing companies. Market share can decrease if competitors are allowed to penetrate the market and attack SAB’s “Achilles heel.”
I consider the large market share in South Africa as an “Achilles heel” because SAB uses a lot of the financial gains from this market to enter into new markets and to finance other operations in the company.
Several opportunities exist for SAB such as the consolidation of the brewing industry, product innovations, strategic alliances, and penetration into new markets. The brewing industry is in the continual process of becoming a global industry, consumer tastes are beginning to converge across national borders and breweries are finding it easier to access foreign markets because of partnerships and low tariffs. SAB continues to introduce new products into the market such as Sky Blue (introduced in North America), Sterling Light Lager, Copper Crest, and Eagle which have been introduced into South Africa market. Strategic alliances have helped SAB gain a strong market share of 33% in China. Continued efforts in entering other countries that are government regulated such as Russia can be an opportunity for SAB to add...