strategy analysis sabmiller
CASE STUDY: SABMiller, STRATEGY ANALYSIS - 2006
As of 2006, SABMiller had presence in both developing countries as well as developed countries. After the lifting of the international sanction against South Africa in 1990s, SAB was able to capture new growth by expanding into developing countries, whilst at the same time consolidating its existing regional market of South Africa and in 2002 entered developed market of US with the acquisition of Miller.
External Analysis
SABMiller's business strategies are influenced by the forces in its external environment.
PESTEL and Porter's five forces framework are used to analyze these factors influencing the firm's macro-environmental and industry sectors respectively (Johnson et al, 2008, p.55). From
SABMiller's PESTEL Analysis (Appendix A) and Porter's Five Forces Analysis (Appendix B), the key external drivers of change affecting SABMiller are ;
Political Threat & Economic Threat;
SABMiller relies on markets in developing countries for its growth objectives. Hence it has to comply with diverse set of local regulations, tax laws that are unique to these countries. And it is dependent on political stability in these countries as any kind political turmoil can have a negative effect on SABMiller's operations and profitability. In the developed countriesSABMiller has to face and adopt to stricter alcohol laws along with growing anti-alcohol lobby.
Economic Threat;
SABMiller is subject to global economic cycles like GDP, exchange rates, oil prices, levels of disposable income. When income level falls in emerging markets, beer consumption falls.
Fluctuation in local currency exchange rate will also have significant effect on its profits .
Increase in the prices of raw materials or transportation cost will effect its profits.
Buyer Power ;
In developing countries, beer consumption increases as disposable income increase. However buyers can easily switch from beer consumption to wine &
As of 2006, SABMiller had presence in both developing countries as well as developed countries. After the lifting of the international sanction against South Africa in 1990s, SAB was able to capture new growth by expanding into developing countries, whilst at the same time consolidating its existing regional market of South Africa and in 2002 entered developed market of US with the acquisition of Miller.
External Analysis
SABMiller's business strategies are influenced by the forces in its external environment.
PESTEL and Porter's five forces framework are used to analyze these factors influencing the firm's macro-environmental and industry sectors respectively (Johnson et al, 2008, p.55). From
SABMiller's PESTEL Analysis (Appendix A) and Porter's Five Forces Analysis (Appendix B), the key external drivers of change affecting SABMiller are ;
Political Threat & Economic Threat;
SABMiller relies on markets in developing countries for its growth objectives. Hence it has to comply with diverse set of local regulations, tax laws that are unique to these countries. And it is dependent on political stability in these countries as any kind political turmoil can have a negative effect on SABMiller's operations and profitability. In the developed countriesSABMiller has to face and adopt to stricter alcohol laws along with growing anti-alcohol lobby.
Economic Threat;
SABMiller is subject to global economic cycles like GDP, exchange rates, oil prices, levels of disposable income. When income level falls in emerging markets, beer consumption falls.
Fluctuation in local currency exchange rate will also have significant effect on its profits .
Increase in the prices of raw materials or transportation cost will effect its profits.
Buyer Power ;
In developing countries, beer consumption increases as disposable income increase. However buyers can easily switch from beer consumption to wine &