SABMiller Analysis - Case Study Example

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SABMiller faces many difficulties in attempting to gain market share and meet its priorities of developing a strong brand in its local regions of operations.Much of the problem associated with meeting SABMiller’s strategic priorities involves marketing focus and promotional strategy…
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SABMiller Case Analysis
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Download file to see previous pages The external environment for SABMiller in 2010 was conflicted by the inability to differentiate certain products in its portfolio of brands, namely the light beer categories, which accounts for 40 percent of total beer sales in the U.S; a significant volume. In Western Europe, well-established premium brands were estimated to be driving consumer demand based on their buying trends. This was a difficulty considering that new executive leadership worked toward reducing the Miller brand portfolio from 50 down to just 10 or 12 products. Divestment of premium brands that occurred during the earlier part of the 2000s seemed to limit the ability of SABMiller to re-establish brand presence for low-performing beer. Clearly, SABMiller is affected by the consumer behaviour preferences driven by trends or consumption patterns and must reengineer processes to meet these changing demands.
In 2010, it was also clear that SABMiller is impacted by events in the external market, such as South African AIDS pandemics, confidence in certain currency markets related to the stock market and trading, and other events that limit their short-term potential to gain revenue and/or market share. However, SABMiller understood these limitations and worked to leverage other activities to the best of their ability, especially considering that some external events like the AIDS scenario was completely outside of the control of strategic leadership and focus.
Additionally, the external market was driven by joint ventures from some of the major players in the beer industry, thus limiting the ability to consider this a quality strategy that had once served them well, such as with Coors and other brands. Even though these had short-term revenue opportunities and cost reduction improvements, or streamlining operational functions, their long-term value was diminishing. The external market provided opportunities to combine resources with competition, however this strategy has long-term brand problems at the marketing level when similarly-priced products in a joint venture are competing with one another. Thus, finding new opportunities based on the external market characteristics were becoming increasingly difficult to innovate and implement. SABMiller’s competitive advantage SABMiller’s competitive advantage had been the ability to coordinate resources for acquisitions in order to extend their portfolio of brands across Europe, emerging economies and the United States. This drove considerable success from 2001 until 2009, such as the acquisition of Grolsch, Sarmat Brewery in the Ukraine, and multiple brewery purchases in the Chinese market. As indicated by the company’s cash flow statements, the improvement in total brand portfolios gave it more resources to seek acquisitions as a strategy for long-term growth and opportunity in emerging economies and locally. SABMiller fits the profile of a strategic leader when it comes to seeking opportunity through acquisition and divesting poor performing brands when required through external analysis and business process reengineering. ...Download file to see next pagesRead More
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