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  SOUTH AFRICAN BREWERIES
  Anna Sobcyzk
  Monica Chien
  Evgueni Volkov
  Paula Tapia
  Blanca Torra-Balari
  Business Strategy
  
  
  
  Company overview
  Core business Beer market
  Other businesses Hotel, games, bottling
  1895: Start of the company in South Africa
  1898: Launch of Castle Lager brand in Johannesburg
  SAB listed on the London Stock Exchange
  1970: SAB moved its primary listing to the Johannesburg Stock Exchange
  1999: SAB moved back to the London Stock Exchange
  2001: SAB 5th largest brewer in the world
  from 1996-2000 the fastest growing brewer
  Output of 77m hectolitres of beer
  2003: SAB Miller 2nd largest brewery in the world
  Operations in over 40 countries across Europe, North and Central America, Asia, Africa and South Africa
  
  
  News About SAB MILLER
  Acquisition of Miller Brewery from Philip Morris on May 30, 2002
  Rename to SABMiller plc
  Become the world's second-largest brewer
  Concentrate on the core competence (brewing, marketing and selling beer)
  New CEO of SAB in 2002
  Norman Adami ,the first foreign national to lead Miller
  To create a "performance-based culture"
  Miller turns to robots for shipping
  
  
  The competitive environment
  "5 forces" analysis
  
  Threats to entry
  Economies of scale
  Capital requirement of entry
  Access to distribution channels
  Cost advantages independent of size
  Expected retaliation (a fear of back strike)
  Legislation or government action
  Differentiation
  
  
  2.The power of buyers
  Concentration of buyers
  Many suppliers
  Alternative sources of supply
  Material cost as a big part of the final price
  Easy supplier switching
  Possibility of acquiring of a supplier if price/quality is low
  
  
  3.The power of suppliers
  Concentration of buyers
  Hard to switch a supplier
  Brand power
  Suppliers'integration
  High customers fragmentation (low bargaining power of each segment)
  
  
  4.Threat of substitutes
  Product-for-product (technologically improved versions)
  Substitution of need (absolutely new technology)
  Generic substitution (competition for a need)
  Doing without (abandon a want)
  
  
  5. Competitive rivalry
  Comparable parameters
  Growth rates
  Global customers
  High fixed costs
  Extra capacity
  Differentiation acquisition of weaker companies
  High exit costs
  
  
  Results Strategic issues
  The expansion to the emerging markets
  1) competitors in the global beer market start entering emerging markets;
  2) incomes in these new markets may be instable, the sales volumes may fluctuate considerably as well;
  3) brands are not powerful enough to support customers' loyalty.
  
  
  Facing new problems
  SABMiller's actions should protect its competitive position both in the global and local markets.
  Diversified business portfolio decreases expansion risks.
  Considerable freedom of local subsidiaries provides flexibility and control.
  Active promotion of new products and brands guarantees long-term market stability.
  
  
  The organisation's competitive position
  During the past years SABMiller was positioned as a leader in the global beer market
  Financial strength of widespread portfolio supports further expansion
  Organically growing sales and productivity improvements
  Company succeed in providing customers and shareholders value simultaneously
  
  
  Direct competitors
  Scottish&Newcastle
  United Breweries
  Interbrew
  
  
  STRATEGY OF ENTRANCE IN THE NEW MARKET
  Grown on the basis of its strenght in developing markets with huge potential
  Strategies are based on market expansion (beer market) and diversification (bottling+hotels+casinos)
  
  
  CORE COMPETENCES
  The knowledge of strategy capability
  Implementation of expertise gained over 100 years in South Africa
  
  
  Basis of SAB's Development
  Strategy development in emerging countries
  International growth through acquisition
  
  
  EVOLUTION
  Highly fragmented market in less developed countries
  small-scale and localised suppliers; low quality beer
  The opportunity to take profit through market gap in emerging markets
  Approach to local breweries to keep the fierce attachment
  
  
  ADVANTAGE OF THE GAPS
  Acquaring an initial local stronghold to keep original catchment area
  Expansion from local to international
  Through acquiring further brewing business and focusing the brand portfolio(Better overall marketing, Increases in total sales, and economic scales)
  
  
  Steps
  Quality improvement and continuous innovation of beer
  Improvement of marketing and distribution
  Improvement of productivity and capacity
  
  
  The requirement of the process
  Great political sensitivity when dealing with government
  Development of expert operational skill (Robustness: unique ressource + knowledge of culture)
  Promotion of premium brands
  
  
  SABS STRATEGY OF INCREASING MARKET SHARE
  Expand to market share in alcoholic drinks through
  Channel segmentation
  Distribution
  Promotion
  
  
  BENCHMARKING
  Managers need to observe and understand how top performing organisations undertook their activities and to asses if these could be imitated or improved upon...