2.

3 Strategy evaluation and formulation

SABMiller is one of the world’s largest brewer measured by its revenue, profits, cash, and
operations and is also a major bottler of Coca-Cola. SABMiller’s overall market share was 98%
with respectively lower growth, it was like a mature cash cow (BCG Model). The size of the
company is one of its biggest competitive advantage as it has the ability to operate as a costs
leader. Costs leadership is the competitive strategy used by large companies to keep prices lower
than their competitors. Maintaining lower prices can be achieved by productivity efficiency,
controlling costs, economies of scale. SABMiller has managed over the past’s century to keep its
competitive advantage for being a cost leader in its industry by employing of well-trained human
resources, efficient infra structure and economy of scale production in brewing industry. Costs
have been cut off at every segment of the value chain.

The company has survived for over a century now. How has this been possible in such a trendy
world with constantly changing markets? It has managed to deliver the best value supply chains
with superior total value to the customers in terms of speed, costs, quality and flexibility.
SABMiller always considers customers need, forecast technological trends, assess profitability,
allocate resources across competing proposals for investment, and take new products to markets
(Bower & Christensen, 1995, p.1). The company has managed to get closer to their customers
through acquisition which was being attained in a hostile way with their generic strategies based
on quality, and customer responsiveness. The company’s diversity and flexibility as brought by
their hostile takeovers has earned the company ability to have intimate knowledge and close
relationship with their customers. The company has operations on six continents spreading
across 60 countries, and makes more than 200 different beers at 139 factories spread in various
global locations (marketing91.com).

The global trend towards premium brands makes the industry attractive as it is the fastest
growing in the global beer market. In order for SABMiller to compete on a global front, they had
built a portfolio of international brands (graduateway.com). The company recently went on a
new initiative of establishing premium brands in new markets globally and this has been a
success competitive differentiation strategy positioning tactic. Pilsner Urquell, Peroni Nastro
Azzurro and Miller Genuine Draft are their premium brands which are leading internationally on
the market. These products have been clearly articulated to consumers. Sab Miller focuses on
developing strong brand portfolios, capacity expansion by improving its quality and production
and this has helped them to set their differentiate their products from competitors.

Sab Miller is the most admired company in the global beer industry due to its strong brand
portfolos.The company persistently contrive its localized business and its global scale by
differencing them from their rivals and underpins their vision. The company has studied and
 understood the developing markets, respecting heritage, being a leading brewer and delivering
sustainable growth. (www.essaysauce.com).
Fig 1.1 represents the situation analysis tool, a preminary stage of strategic decision making
(Johnson et al 1989). In this era there has been some challenges like the pandemic diseases,
threats (Anheuser-Busch. MAIN COMPETITOR) and weaknesses that are against the success of
the business but however this table helps becomes the basic framework for strategic analysis in
finding opportunities that match with our strengths to beat all odds against the success.

FIG 1.1 SWOT ANALYSIS

-World’s largest brewer (economies of scale) -overreliance on its developed market (organic
prospects are not the same).
-Financial strength (listing Johannesburg stock
exchange) -Sustained growth (acquisitions have been
declining).
-Brand Equity----wit wide product portfolio
-Integration issues with some other subsidiaries.
-Operations Efficiency.

Opportunities (O) STRATEGIC OPTION(SO) maxi-maxi (WO) STRATEGIC OPTIONS mini-

-Emerging markets (Increase in demand for craft -Offering new product ranges -Using their
financial strength and Brand Equity to enter the - Instead of acquisition and taking over
beer) new emerging markets e.g. meeting the for craft company it should look at starting of its own
beer rising demand) branches in some foreign countries as it has a
brand equity well known worldwide.
-The merge of internet (globalization bringing - It should look at getting into other markets,
exposure. - Using their operational efficiency to operate by extensively studying all new companies
internationally across the globe e.g. selling and carefully entering them with much
online, knowledge
-Increasing their brand portfolio ( entering other - Market development through flexibility
markets )
-

Threats (T) Strategic Option (ST) maxi-mini (WT) STRATEGIC OPTION mini-mini

-Emerging new trends e.g. new -Offering costs efficient products that meets well with -Heavily marketing with huge aggressive promotions,
customers’ needs e.g. the local productions intensive distribution and pricing their product
wines and spirits competitively.

-Merging with local competitors to remove competition,

Fig 1.1 represents the situation analysis tool, a preminary stage of strategic
decision making (Johnson et al 1989). In this era there has been some
challenges like the pandemic diseases, threats (Anheuser-Busch. MAIN
COMPETITOR) and weaknesses that are against the success of the business
but however this table helps becomes the basic framework for strategic analysis
in finding opportunities that match with our strengths to beat all odds against the
success.