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Case Study - Essay Example

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Name: Course: College: Tutor: Date: SAB’s strategic position as at 2007 South African Breweries (SAB) was renamed SABMiller in 2002 after acquiring American brewer Miller. By the year 2007 it had become the second largest brewer by volume in the world. SAB Miller has also gone on to establish itself in many other countries around the becoming a multinational company…
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Download file to see previous pages The company reviewed it’s its operations in the 2006 when SABMiller had just completed a three-year turnaround plan, establishing a platform for future growth. From that report it can be noted that in North America the company had made progress as it had continued to grow while giving better prices to the customers than its competitors in that market. SABMiller had heavily invested in that market which enabled it succeeds in price cutting without passing on the costs. It had a three year investment strategy which has enabled to remain strong despite tough conditions. From the foregoing, it can be deduced that SABMiller’s strategy in the North American market is heavy investment which in turn enables it lower prices hence driving out competitors (Hal, 2002). In relation to Europe SAB’s strategy was to increase its share and to expand its capacity. This was to be achieved through introduction of new brands and new packaging methods. This strategy has enabled it to increase its share, volume and expand its capacity in various European markets. SAB’s strategy in most of the countries has been to acquire an initial local stronghold firm to enable it advance into other markets which it had not penetrated before. It has achieved this by acquiring other brewing businesses in most cases to focus on brand portfolio which gives it a better market position, increases sales and to enjoy economies of scale in production and distribution. It seems that SABMiller has shifted its focus to developing countries having already established a substantial presence in the developed countries. It realised that its ability to succeed in developing countries has proved to be of advantage. This was noted in the company’s report of 2006. This strategy has to an increase in consumption of soft drinks by consumers in South Africa which in turn has led to increased sales ( Donald , 2008). To meet the demands of changing consumption patterns, SAB has introduced new sales and distribution systems and enhanced the flexibility of its production facilities. It has licensed more agents has brought more outlets into the mainstream. This means they can now operate more professionally and it can deliver to them direct - which in turn raises the performance of the business. The stakeholders expect that SAB’s businesses in Africa will continue to grow being helped by broader distribution and a clearer segmentation of SAB’s brands. The stakeholders also see plenty of opportunity to keep improving efficiency in these relatively underdeveloped countries and see the outlook for Africa as a whole to be encouraging. Possible strategic options open to SAB First of all, SAB can penetrate the market with its current products. This can be through heavy advertising or using any other strategy enable existing and potential customers get knowledge of its existing products. With this option, SAB needs to come up with a strategy to enable it increase sales to its current customers by convincing them without change of its original products. SAB can also gain competitors customers by improving the quality of its beer compared to that of its competitors. Since it is cheaper to retain current customers than acquire new ones, hence in this option SAB needs to improve its relationship with its current custo ...Download file to see next pagesRead More
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