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Anheuser Busch SWOT Analysis - Essay Example

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Anheuser Busch Companies is the leading beer brewer. It produces the world’s largest selling beer brand i.e. the Budweiser and Bud Light. Anheuser Busch falls under the management of its corporate parent Anheur Busch InBev…
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Anheuser Busch SWOT Analysis
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Download file to see previous pages The company was a pioneer in introducing pasteurization to keep the beer fresh and also was the first to use refrigerated cars for transport of beer. The company's early innovations also included a network of railside ice houses to preserve the beer. It was in 1981, that this small firm became Anheuser-Busch International and currently owns 12 breweries in the US and 20 breweries outside the US. The flagship brand of the company is Budweiser which is brewed in 10 countries and has a global market. Other brands include Bud Light, Michelob Honey Lager, Michelob, Busch, Busch Ice and Bare Knuckle Stout. The presence and the strength of the company as continued to grow and it was the largest brewer in the United States in the year 2007. (Leone, 1995) The company's goals are to extend its position as the leading brewer internationally. This is perceived would be achieved by increasing its share in the domestic beer market and also extends its presence internationally. It is tapping thirsty markets internationally by using two pronged strategies for growth. These two pronged strategies include expanding the Budweiser brand globally and simultaneously strengthening equity partnerships with other large brewers around the globe. Since the company produced two thirds of all beer in the US, it could easily be assumed that the local market was saturated with Anheuser-Busch products. It was evident that the linear growth model that the company has been following for the last so many years will have to be stretched beyond the boundaries of the United States if the company has to make its presence felt. Section II- Strengths and Weaknesses Strength no 1: Cost effectiveness The company has adopted its strategies to revolve around its key strengths and opportunities. Its biggest strength lies in its ability to produce cost effective products by capitalizing on product development expertise within the company. It also used its substantial capital for equity investments and acquisitions. The tax laws and regulations caused it to change its prices to adjust for tax changes. The company is also not new to low cost packaging and production for new markets. It has a cost strategy for the economic segment and is an expert at using the value chain to assess the supply side of its production. Thus its two pronged or rather multiple pronged strategies were based on its core competencies. Equity investments include a $105 million investment to own 10% of Antarctica and to control 70% of Antarctica’s operations. It again involves the exchange of representatives on both the company's boards. This deal helps Anheuser-Busch garner a share from the huge Brazilian beer market which is growing at a rate of 15% annually. Besides the coalition and partnership, another move by Anheuser-Busch includes a licensing agreement for a new company. This will be a joint venture where Antarctica will brew Budweiser in Brazil. This joint venture is an example of production in the host country and will be 51% owned by Anheuser-Busch and 49% by Antarctica. This local production will maintain Budweiser quality standards and allow for more competitive pricing as importing costs and taxes will be eliminated. (Nelson, 2005) Here again, like in all global markets Anheuser-Busch capitalizes on its beer making excellence and combines it with the expertise and the reach of market leaders in the host countries. Normally a coalition results in the increased sales of products of both companies and a more competitive beer market which results in benefits for both suppliers and consumers. Strength no 2: Leading market Position Anheur Buscher also enjoys the leading market position in the industry. It kept its ...Download file to see next pagesRead More
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