Strategic Analysis
1) Introduction 1.1 Company Background
SABMiller PLC is the second largest Brewer in the world operating on a multinational level in 75 countries across 6 continents (SABMiller 2009). From 2005 to 2009 it experienced a huge growth phase creating a diverse brand portfolio and dominant position among emerging markets.
1.2 Report Objectives
This report seeks to firstly analyse SABMiller’s internal strengths through identifying its core competencies and therefore its competitive advantage. A SWOT analysis will then be used to generate potential strategic direction by further analysis of their internal strengths and weaknesses and their potential to take advantage of, and overcome, external opportunities and threats. A financial analysis of the company over the five year period will also be used to deduce SABMiller’s financial status and to determine whether they have the resource to implement the suggested strategies. The strategies will be generated on the basis of the internal analysis, providing detailed recommendations of those most important to the future of SABMiller.
1 Internal Analysis 2.2 Prahalad & Hamel (1990) Core Competencies Prahalad & Hamel (1990) state that a core competency must possess all three of the following characteristics: 1. It should provide potential access to a wide variety of markets 2. It should make a significant contribution to the perceived customer benefits of the end product 3. It should be difficult for competitors to imitate
Therefore, the core competencies identified are those which “critically underpin competitive advantage” (Johnson et al. 2011)
This table below has highlighted 4 core competencies with justification according to Prahalad & Hamel’s three characteristics.
| Prahalad & Hamel (1990) core competency characteristics | Core Competency | Access to Markets | Customer Benefit | Ability to imitate | International spread of business | SABMiller have
SABMiller PLC is the second largest Brewer in the world operating on a multinational level in 75 countries across 6 continents (SABMiller 2009). From 2005 to 2009 it experienced a huge growth phase creating a diverse brand portfolio and dominant position among emerging markets.
1.2 Report Objectives
This report seeks to firstly analyse SABMiller’s internal strengths through identifying its core competencies and therefore its competitive advantage. A SWOT analysis will then be used to generate potential strategic direction by further analysis of their internal strengths and weaknesses and their potential to take advantage of, and overcome, external opportunities and threats. A financial analysis of the company over the five year period will also be used to deduce SABMiller’s financial status and to determine whether they have the resource to implement the suggested strategies. The strategies will be generated on the basis of the internal analysis, providing detailed recommendations of those most important to the future of SABMiller.
1 Internal Analysis 2.2 Prahalad & Hamel (1990) Core Competencies Prahalad & Hamel (1990) state that a core competency must possess all three of the following characteristics: 1. It should provide potential access to a wide variety of markets 2. It should make a significant contribution to the perceived customer benefits of the end product 3. It should be difficult for competitors to imitate
Therefore, the core competencies identified are those which “critically underpin competitive advantage” (Johnson et al. 2011)
This table below has highlighted 4 core competencies with justification according to Prahalad & Hamel’s three characteristics.
| Prahalad & Hamel (1990) core competency characteristics | Core Competency | Access to Markets | Customer Benefit | Ability to imitate | International spread of business | SABMiller have
References: Atrill, P., & Mclaney, E., 2008. Financial accounting for decision makers. 5th Edition. Harlow: Pearson Education limited Harness, DR., Marr, NE., & Goy, T., 1998 Johnson, G., Whittington, R., & Scholes, K., 2011. Exploring Strategy. 9th Edition. Harlow: Pearson Education Limited Kerin, RA., Varadarajan, PR., & Peterson, RA., 1992 Prahalad, C. K., & Hamel, G. 1990. The Core Competence of the Corporation. Harvard Business Review, 68(3), 79-91. Thomson one, 2013. https://www.thomsonone.com Oakstone Partners 2011 Unilever 2013. 1990’s. Available from: http://www.unilever.co.uk/aboutus/ourhistory/1990s/ Kane, P., 2012