STRATEGIC MANAGEMENT

CASE STUDY

1 MARCH 2011
 Agenda

• Introduction

• Strategic Position for 2007

• Future Implications
• Recommendations
 Introduction
• 1895, SAB founded in Africa as

“The South African Brewery”

• 1950-1990, business expansion in Africa
• 1993-2000, emerging onto global market
• 2002, Established SABMiller
• 2006, presence in more than

20 countries in 5 continents
 Strategic Position for 2007 Environment

Capability Strategic Purpose

Position

Five-force model Low Culture

Potential •Capital & knowledge
entrants •Product differentiation
•Expected retaliation

Low High High

Competitive
Fragmented Suppliers • Intense competition
rivalry Buyers • Low switching cost
supplier • High fixed cost • Variable customer
segment

Medium
Substitutes • Popularity of wine & spirit
• Low switching cost
 Strategic Position for 2007 Environment

Strategic
Purpose
Capability Position
SWOT Analysis
Culture
Strength
● Global presence (currency & Weakness
● High gearing
geographic risk)
● Profit from “soft currency”
● 2nd largest brewer in volume
● Good brand portfolio
● Acquisition and Diversification
● Respond to external environment
Threat
● Growth in substitutes (wine &
Opportunity spirit)
● Emerging economy change ● Intense competition
(urbanisation, consumption spending) ● Volatile nature of currencies
● Rapid growth in premium brand ● Pandemic effect
segment
 Strategic Position for 2007
Environment

Strategic
Capability Purpose
Position

Culture

Culture Purpose
Africanist culture
and fearlessness in Stakeholder
tackling emerging Expectation
markets
 Strategic Position for 2007
High
Differentiation
•Premium brand
Hybrid Focused • Global portfolio
differentiation • Acquiring local
Perceived
brewery
Increased
product/
service Low Strategic Cloc price/
price standard
benefit k value

Increased
‘No frills’ price/
low value
Standard price/
low value
Low High
Price
 Future Implication
Reduce Threat of New Entrants
・ Creating a marketing/brand image
・ Tie up with distributors
・ Retaliation tactics
Reduce Threat of Substitutes
・ Enter substitute market and influence from within
Five Force I ・ Aggressive Marketing

mplication Reducing Buyer Power

・ Partnering
・ Improved supply chain management
Reducing Supplier Power
・ Improved Supply chain management
Reducing competitive Rivalry
・ Product differentiation
・ Focus on different segments
 Future Implication
SWOT Implicatio
n Opportunity Threat
Exploit Strength Counter Threat
・ Continue building ・ Develop new product
Strength premium brand utilizing to
global presence counter substitute
based on expertise of
operating practices and
management skills
Build Strengths Build Defense
Weaknes ・ Major profits coming ・ Hedging against soft
from emerging currencies to reduce
s economies regardless of volatility
soft currency
 Future Implication
Continent
Product Life cycle
Country
South China South
America Poland Africa
Latin
Russia America
North
America
Romania

Rest of India UK
Africa
Italy
Vietnam

Development Growth Shake out Maturity Decline

 Future Implication
Market Share
High Low

China India
BCG Matrix Poland Vietnam
UK Italy
Russia
South Latin Rest of
Market Romania
America America Africa
Growth

North South
America Africa
Continent Country
Low
 Competitive Advantage

Unique Resources Core competences

・ Brand reputation ・ Global market presence
・ Flexible operations ・ Strong value-adding
management parenting capability
・ Portfolio of locally ・ Well established
produced brands distribution channels
 Recommendation
Ansoff Matrix Products
Existing New
①
Developed Countries
・ Least Risky Market Product
・ Leverages existing resources Penetration/
&capabilities Existing Development
・ Attain higher profits & faster
Consolidation
growth in premium segment
Markets
②
Developing Countries
• Utilize Brand reputation Market
• Experience in producing local
New development Diversification
brands
• Increased global presence to
gain more market share
 Recommendation
③ Life cycle
Development → In depth Market Research
→ Formulate market strategy
→ Aggressive promotion & advertisement
Growth → Improve product availability
→ Better forecast customer needs
Shake out → Counter competitors
→ Improve management
Maturity → More promotion & advertisement
→ Adopt multi-distribution channel
→ Cost reduction by operation management
 Recommendation
④ Global Matrix structure
Better Integration among sub units
Utilize scale of economies
Transfer competencies throughout the organization
Local responsiveness