This report assessed change management issues at AnheuserBusch. The areas of change management which were assessed focused on the following areas; organizational behaviour, cultural, technological, political, social and economic variables. Strategic models were used to assess AnheuserBusch, a multinational brewery organization. The strategic models used in this report includes; SWOT Analysis and Porter's Five Forces Analysis. Another area of change management issue assessed in this report involved the issue of managing organizational culture. This report also assessed information systems strategy in organizations with a focus on AnheuserBusch. Conclusion and recommendations for this report were based on findings from the secondary data collected bearing in mind that the secondary data was analysed using a content analysis.
2. ANHEUSERBUSCH: COMPANY BACKGROUND
AnheuserBusch is a multinational organization that is involved in the business of brewing. The company is well-known brewer of beer brands. AnheuserBusch was created as merger between Ambev and Interbrew. The organization's headquarters is in Belgium, i.e. the company is domiciled to Belgium. Anheuser Busch is a multinational brewer of worldwide and well-known brands like Budweiser, Becks, Stella Artois and Bass. These beer brands are in the list of the top ten global beer brands in the world. AnheuserBusch has a robust portfolio of beer brands especially bearing in mind that AnheuserBusch makes beer brands that are market-specific. Some example of some market-specific beer brands are; Serdin, Harbin, Skol and Leffe. In total, AnheuserBusch has over 250 beer brands. AnheuerBusch operates in different global markets namely; North America, Latin America, Western Europe, Asia-Pacific, Western, Eastern and Central Europe. In line with its continued expansion activity, AnheuserBusch also has operations in emerging markets like Russia and China. With employee size in excess of 120,000 in about 25 countries, the company's beer brands are distributed in over 80 countries globally. A majority of AnheuserBusch's revenues are derived from Latin America and North America. In spite of its global expansion activity, AnheuserBusch is not established in Africa. In fact, AnheuserBusch has operations in Tanzania, Nigeria, South Africa and Algeria. As at the year 2008, AnheuserBusch made revenues of about 35billion dollars. These markets were chosen by AnheuserBusch were based on their closeness to each other. A part of its program for giving something back to the environment, AnheuserBusch is involved in various conservation programs around the world. Part of the marketing activity of AnheuserBisch is conducted through television advertising and sponsorship of various sporting activities like its involvement in NASCAR.
2.1 Mission statement and objectives
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Mission Statement: "To be the best beer producing firm in a better world"
The three long term objectives of AnheuserBusch are listed below:
1. To bring about volume growth ahead of industry growth.
2. To raise revenue ahead of volumes.
3. To sustain strong financial discipline and guarantee that costs are kept below inflation.
3. STRATEGIC ANALYSIS
To carry out a strategic analysis on AnheuserBusch, a SWOT Analysis (strengths, weaknesses, opportunities and threats) and Porter's Five Forces Frameworks were used.
3.1 SWOT ANALYSIS
The SWOT analysis is a strategic model used to analyse the strategic position of an organization. Results obtained from the SWOT Analysis can be used as a medium for determining the where the organization sees itself in the future. The SWOT Analysis involves strengths, weaknesses, opportunities and threats. The strengths and weaknesses represent the internal analysis of the organization while the opportunities and threats represent the external analysis of the organization.
1) AnheuserBusch is a global brand.
2) AnheuserBusch is a manufacturer of global beer brands like Budweiser and Stella Artois.
3) AnheuserBusch has the financial infrastructure to expand its operations and increase its market share.
4) AnheuserBusch has a large market share.
5) AnheuserBusch enjoys economies of scale.
6) AnheuserBusch is long on its learning curve.
7) Modernized brewing facility
8) Established distribution channels.
1) AnheuserBusch has a similar strategy to that of other well known breweries like Heineken.
2) High supplier power in the brewery industry.
3) AnheuserBusch operates too many beer brands.
4) Joint venture arrangements may lead to problems.
5) Poor marketing on the part of dealers (wholesalers) may affect sales.
1) Increase in the growth rate of the brewery industry.
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2) Opportunities in foreign markets.
3) Joint venture arrangements reduce operational costs for AnheuserBusch.
4) Global sporting events provide an added opportunity for AnheuserBusch to increase its market share.
5) AnheuserBusch's large product line provide an opportunity for the company to engage in much needed research and development.
1) Alcohol taxes and duties impact negatively on the revenues of AnheuserBusch.
2) Government regulations on alcohol may affect AnheuserBusch's revenues.
3) Association of Alchohol with anti-social behaviour.
4) Excessive competition in the brewery industry.
5) Poor weather conditions increase the costs of commodities like barley used in making beer.
6) Health policies and programs can reduce consumption of alcohol, and this can impact negatively on the revenues of AnheuserBusch.
7) Fluctuations in commodity prices.
8) Economic cycles like the current recession may impact negatively on the revenues of AnheuserBusch.
Table 1: SWOT Analysis of AnheuserBusch
One of the strengths of AnheuserBusch is that it is a recognisable brewery name bearing in mind that the company has some of its beer brands like Stella Artois and Budweiser in the top ten global brands of the world. Another strength of AnheuserBusch is that it has much needed financial infrastructure to take advantage of foreign markets and also expand its operations in its existing markets. Furthermore, in terms of possessing much needed infrastructure, AnheuserBusch can engage in intense research and development. AnheuserBusch also has a large market share and as such, that makes its business sustainable in the near future. Again, AnheuserBusch enjoys economies of scale. In the context of economies of scale, AnheuserBusch has the size and capacity to take advantage of reduced costs since it can buy its raw materials in large quantities. Again, AnheuserBusch is long on its learning curve bearing in mind that it has been in existence for a while. AnheuserBusch also has the technological infrastructure to reduce its operational costs bearing in mind that AnheuserBusch employs state of the art technology in the production of its beer brands.
One of the weaknesses of AnheuserBusch stems from the issue of duplicity of strategy. In the context of duplicity of strategy, AnheuserBusch employs similar corporate strategy with major breweries like Heineken; for example, most major beer manufacturers like AnheuserBusch and Heineken employ joint ventures as their chosen entry strategy into some markets. This is the case in Nigeria where both used joint venture as their entry strategy. Another weakness of AnheuserBusch stems from the fact increased supplier power as major breweries like AnheuserBusch do not have control over the price of commodities like Barley and Wheat used in making beer. Another weakness of AnheuserBusch stems from the fact that it manages over 250 beer brands in its product portfolio. This situation may make AnheuserBusch lose some deal of focus especially with regards to its corporate-level strategy. Another weakness of AnheuserBusch stems from the fact it uses joint venture arrangements; for one, joint venture arrangements may be difficult to manage especially with regards to quality issues. Another weakness of AnheuserBusch stems from the fact that poor marketing on the part of wholesalers may affect sales.
One opportunity which AnheuserBusch can take advantage of is the fact that there are still untapped foreign markets where AnheuserBusch can expand its operations. There are abundant opportunities for AnheuserBusch in the African market. Another opportunity is the fact that increased growth rate in the alcoholic beverage industry can lead to increased sales and profits for AnheuserBusch. Another opportunity is the fact that AnheuserBusch can employ joint ventures to penetrate foreign markets especially bearing in mind that joint ventures can also reduce operational costs for AnheuserBusch. Global sporting events like the forthcoming FIFA World Cup event in South Africa present an enormous opportunity for Budweiser to further increase awareness of its brand. Another opportunity that AnheuserBusch can take advantage of is the fact that its large portfolio of beer brands can be leveraged on to test new product lines.
One of the threats that AnheuserBusch faces is intense competition. AnheuserBusch faces competition from other global beer brands like Guinness and Heineken. Again, the fact that most major beer brands have a similar corporate and business strategy further highlights the significance of competition in the brewery industry. Another threat that AnheuserBusch faces is the issue of duties and taxes on alcohol. According to the St Louis Post, "alcohol taxes tend to increase by 2% annually". This has the potential to reduce AnheuserBusch's revenues. Another threat that AnheuserBusch faces is the association of beer and alcohol with anti-social behaviour; one of the reasons why MADD (mothers against drunk driving) was set up. Another threat faced by Anheuser Busch is the fact that health campaigns against the dangers of alcohol and binge drinking may impact negatively on the sales of AnheuserBusch. Another threat faced by AnheuserBusch is the fact that fluctuations in commodity prices can increase the operational costs of AnheuserBusch especially bearing in mind the activities of commodity speculators. Another threat AnheuserBusch faces stems from economic cycles like the current recession , which has the potential of reducing AnheuserBusch's revenues.
3.2 PORTER'S FIVE FORCES ANALYSIS
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The Porter's five forces framework was developed by Michael Porter. This particular strategic framework is usually applied as a form of industry analysis. The five forces framework takes into consideration five threats facing an organization or an industry namely; threat of competitive rivalry, threat of new entrants, threat of buyer power, threat of supplier power and the threat of substitutes.
3.2.1 Threat of New Entrants (Low)
The threat of new entrants is low bearing in mind that producing beer products on the scale that AnheuserBusch does is not something that can be done by any business. Again, the fact that AnheuserBusch enjoys economies of scale makes it difficult for new business start-ups in the brewery industry. Again, the state of the art technology that is required to make quality beer products makes it difficult for new businesses to enter the brewery industries.
3.2.2 Threat of Substitutes (High)
The fact that different beer brands exist side by side with AnheuserBusch's beer brands makes the threat of substitutes high. Again, beer products are sold side by side with other alcoholic products like ciders and spirits; this also contributes to making the threat of substitutes high.
3.3.3 Threat of suppliers
The threat of supplier power is moderate. AnheuserBusch uses commodities like barley and wheat to make its beer products. These commodities are supplied by farmers around the world. A situation where suppliers or farmers collude to fix prices may increase the operational costs of AnheuserBusch. To deal with this particular threat, AnheuserBusch tends to have a good relationship with its suppliers; and this helps to keep prices stable.
3.3.4 Threat of Competitive Rivalry
The threat of competitive rivalry is high. This is so because AnheuserBusch faces intense competition from other global beer manufacturers like Guinness and Heineken, which have a considerable global market share. Again, rivals like Guinness and Heineken tend to have operations in foreign markets where AnheuserBusch in also present. Another variable that contributes to making competitive rivalry high is the fact that most of AnheuserBusch's rivals operate a similar corporate and business strategy. For instance, most major beer manufacturers occasionally employ joint venture as an entry strategy into some foreign markets, especially markets where political risk is high. This often leads to a situation where ambush marketing is prevalent in the brewery industry.
3.3.5 Threat of Buyers
The threat of buyers is high especially when taking into consideration the fact that consumers are faced with multiple alternative choices of alcoholic products. For example, in pubs and restaurants, AnheuserBusch's beer brands are sold side by side with other beer brands. Again, the availability of alcoholic substitutes like ciders and spirits increases choice for consumers.
4. MANAGING CULTURAL CHANGE
Managing cultural change is imperative for most organizations especially as organizations are expected to adapt to changes in the external environment. Before delving into giving details about what cultural change is all about, it is important to define what culture is all about. Hofstede (2001) defined culture as, "how people act and behave in the workplace. It is not how they think or what they believe, but how these beliefs are displayed in their behaviours". Hofstede (1991) noted that organizational culture is like the software or DNA of an organization. In this context, organizational culture deals with the characteristics of an organization and how issues are addressed within such an organization. Organizational culture is unique to specific organizations.
Change is the lifeblood of business and indeed the economy. In this context, change is like a strong force that drives a business. Martel (1986) noted that the forces of change are subtle and comprehensive as they affect organizations, jobs and the economy. An organization cannot operate without due consideration for these forces of change. On most occasions, change within organizations is often conducted in line with transformations in the external environment; for example, changes in the industry. An organization that fails to pay attention to change issues does so at its own peril. In fact a lack of consideration for change by an organization can lead to negative results like lack of growth, fall in profitability and lower efficiency. The prevalence of change in the current business environment is made evident by different variables. An example of such variables is the fact that employees are increasingly highly skilled and educated and tend not to be motivated by money but by a complex set of variables. When it comes to expressing how organizational culture can be changed, it is important to note that there are divergent views on the possibility of changing organizational culture; there are views both in favour of and against the possibility of managing or changing organizational culture. Whichever be the case, there is an overwhelming evidence to suggest that organizational culture can be changed. Sun (2008) noted that as long as there are variables like management interventions and strategic decision-making, there is the possibility of managing organizational culture. Cultural change is largely dependent on the behaviour change among employees within the organization. Martins & Terblanche (2003) noted that cultural change is all about bringing about desired behaviours in employees. In this context, managerial tools like decision-making, reward and polices can be used to influence behaviour within the organization. Culture change within an organization requires increased employee involvement. Increased employee involvement is to a large extent dependent on management and management styles. Sun (2008) noted that a humanistic approach to management is effective in increasing the commitment of employees towards change processes and mechanisms within the organization. The concept of culture is based on the principle of learnability and as such, effective learning and development programs within an organization helps in stimulating and facilitating change.
The survival of organizations in the current business environment is dependent on change management. Peters & Austin (1985) noted that effective change management in organizations helps to reduce uncertainty. In this regards, change management helps to prepare organizations for future challenges. As cited earlier, change management is a pervasive subject. It can be approached from different perspectives like the employee-side of change management, the process side of change management and the technological (IT) side of change management.
4.1 Change Management at AnheuserBusch
The approach to change management by AnheuserBusch is mainly innovation-oriented especially bearing in mind that the Alcoholic beverage industry is in its maturity stage in terms of its product life cycle. AnHeuserBusch employs different innovation strategies for its change management programs. One of the innovation strategies used by AnheuserBusch is 'renovation'. In the context of renovation, focus is placed by AnheuserBusch on strengthening existing product lines through innovative marketing campaigns or subtle formulation changes. In the context of renovation, innovation involves extension to existing products. Again, AnheuserBusch's divides its innovations into a front-end process. In terms of the front-end process, emphasis is placed on idea generation and idea qualification. It is important to note here that the front-end process of innovation is more flexible than the back-end process. Furthermore, the innovative nature of change management being applied by AnheuserBusch employs mixed line extensions to create beverage platforms.
4.2 Technological Aspect of Change Management
Technology can be defined as, "a better way of carrying out functions". There is no doubt as to the way in which technology has transformed the way we do things, particularly in the manner in which business is conducted by organizations. The computer and the internet are among landmark technologies that have both transformed personal life and business activities. The popularity and rapid global adoption of technology means that businesses have to adapt their activities and processes to technological processes. Organizations that fail to adapt their organizational processes to evolutions in technological advancements risk being left behind in the virtual and global economy. Burnes (1996) noted that information technology is increasingly playing a strategic role in the businesses interact with their customers and other businesses. Again, Galliers & Leidner (2003) noted that technological adoption by businesses can be a veritable source of competitive advantage.
4.2.1 Information technology and Change Management
As established earlier, organizational change is an issue that has been given increased by attention by organization in recent times. One of the reasons for this is that organizational change is increasingly seen by organizations as a medium for sustainability and also as a source of competitive advantage. Organization change tends to be required by organizations in response to changes in their external environment (see Figure 1). In this context, the external environment is always changing and as such, it is imperative for organizations to realign their corporate level and business level strategies to this constant change. Some of the main external variables which have an enormous influence on change within organizations are; political variables, economic variables, social variables and technological variables (information technology). Burnes (1996) noted that the future survival of all organizations is largely dependent on their ability to successfully and effectively manage change. Organizational change can occur in two main forms namely; transformational change and incremental change. Incremental change occurs when a firm makes minor changes to its technology, processes and structure. Transformational change, on the other hand, occurs when an organization conducts radical change programs. Transformational change usually involves institutional changes. Earlier on in this report, the importance of technology particularly information technology was highlighted as an important variable in the change management process within organizations.
This section of the report addresses the role information technology or information systems play in organizational change. Information systems are usually socio-technical mechanisms and as such, many of the frameworks adopted by the social sciences sphere in the area of change management usually borders on information systems (IS) management. In spite of the fact that information systems are widely recognised as an important aspect of change management, it is important to note that not all information systems implemented within organizations tend to be successful as was the case in 'boo.com'. In many circumstances, the failure of most IT systems implemented within certain organizations usually fails for non-technical reasons (Markus & Benjamin 1997). This failure can occur when organizations erroneous perceive information systems as a singular tool for bringing about organizational change. In this context, information systems only play a complementary role to the change manageemnt process and do not create change in an organization. This is why McKersie & Walton (1994) noted that, "effective implementation of IT is, at its core, a function of managing change". With regards to this particular observation, IT-enabled organizational change is needed to actively manage the changes.
Information Technology (IT)
Skills & Roles
Source: Scott-Morton (1991)
Figure 1: MIT 90s framework
Figure 1 shows that to effectively manage IT-enabled change within organizations, it is imperative to ensure that organizational choices, strategic choices and technology are properly aligned. In this context, IT can be used to transform an organization's strategy. In spite of this, it is important to note at this point that the advantages that ought to be derived from IT-enabled change are on some occasions not being realized by organizations because of biased spending and investment in information technology especially bearing in mind that IT-enabled change transverses major departments within an organizations. IT-enabled change differs from more generic forms of change management. In fact, IT-enabled change is usually based on emergent and contingent approaches (Macredie et al., 1997:12). In the context of the contingency approach, one of the models for effectively implementing IT-enabled change is the improvisational change model developed by Orlikowski & Hofman (1997). The improvisational change model operates based on two assumptions. The first assumption is that changes related to implementation of technology represent an ongoing process rather than an event with an end point after which a firm can return to an equilibrium state (Orlikowski & Hofman 1997). The second assumption is that organizational and technological change relating to the ongoing process cannot be predicted in advance (Orlikowski & Hofman 1997). Based on the improvisational change model, there are two main types of change that can occur namely; anticipated change and opportunity-based change (Macredie et al., 1997:9). Anticipated change, according to Macredie et al., (1997), is a change that is planned well ahead of time and happens as planned; for example, the implementation of e-mails which facilitate communication. Opportunity-based change is a form of change that is not initially planned but is purposely introduced during the ongoing change process in response to an unexpected opportunity; for example, the use of email infrastructure as a tool for spreading rumours within the organization. In this regards, the email tool becomes an informal tool when it ought to be an informal tool.
When it comes to the implementation of IT-based change within an organization, the mode of technology employed is very critical. Some organizations use open-ended technology while some prefer to use close-ended technology. In all, Orlikowski & Hofman (1997) noted that open-ended technology has an edge over closed-ended technology especially with regards to IT-based change management processes. The usefulness of open-ended technology lies in its adaptability. In the context of its adaptability, new applications and customisable features can be readily created on open-ended technologies. Again, Galliers & Baets (1998) noted that open-ended technologies are not inward-looking in their approach and applicability especially bearing in mind that they support the alignment of IT strategy to corporate strategy.
4.2.2 The role of information systems in organizational change
Information systems are instrumental to change within organizations. This is why Galliers & Baets (1998:248) noted that information technology can be perceived as an enabler and driver. For one, information technology, has over the years, transformed the manner in which work and processes are conducted within an organization. The use of Local Area Networks (LAN) within organizations has contributed to improving communication within organizations as employees are interconnected; the use of LAN helps to improve communication effectiveness and in the process, idle time and slack is drastically reduced. Furthermore, IT systems have contributed to speedy transmission of information, effective sharing of data and documents across different departments within organization. Again, Information systems aid in the effective implementation of strategic decisions taken by management within organizations. Information systems also aids and organization in proper interaction with its external environment. In the context of effective interaction with the external environment, open-ended technologies are very useful. In this respect, the adaptability of open-ended information systems tends to support internal and external communication processes. The usefulness of information systems in organizational transformation cannot be understated. In fact, in the current knowledge economy, information systems play a very critical role in the sustainability and survival of organizations.
4.2.3 The role of information systems (IS) at AnheuserBusch
Information technology plays a very important role in the organizational process of AnheuserBusch. One of such ways through which Information Systems are very important to AnheuserBusch is that it has helped to increase efficiencies in workplace services. The importance of workplace services is responsible for the outsourcing of workplace services by AnheuserBusch to IBM and BT. This outsourcing contract entails the following deliverables; fully integrated workplace solutions with laptops and PDAs-this has helped to improve workplace efficiency and also communication effectiveness within AnheuserBusch, and the creation of flexible IT systems (open-ended technologies) that enable upgrades to be done at minimal costs. In terms of outsourcing to BT, BT is responsible for managing network and voice services for AnheuserBusch. In this respect, BT is responsible for designing and managing AnheuserBusch's network infrastructure, i.e. inclusive of both its LAN and WAN. This has helped to increase sharing of information across different foreign markets where AnheuserBusch is present. Again, AnheuserBusch possesses business intelligence infrastructure that enables it to monitor trends in global environment with regards to its core business of beer production. Such business intelligence enables AnheuserBusch to monitor trends in the alcoholic and beverage industry across the world so that it can rapidly adapt its business strategy and operations to such changes in the external environment. In addition, the business intelligence infrastructure at AnheuserBusch is supported by data centre and database management infrastructure provided by IBM. In spite of the fact that such infrastructure may be expensive, one cannot help but note that such infrastructure enables AnheuserBusch make rapid and well-informed decisions that guarantee the sustainability of its business especially in the long term. Again, AnheuserBusch employs an integrative software which enables it to manage different aspects of its value chain while paying critical attention to the importance of accounting.
AnheuserBusch's corporate website (www.ab-inbev.com) has been praised for its user-friendly characteristic and its interactivity. The interactivity of AnheuserBusch's corporate website is evident in its effective navigation from page to page in such a manner that it gives the visitor a concise and broad description of AnheuserBusch's activities. In terms of e-commerce, Retailer collaboration through e-commerce initiatives is more complex in the beverage value chain. This is because unlike the traditional CPG chain which has full visibility to transactions with the retailer, the big four beverage suppliers are dependent on their independent distributors who transact with retailers. AnheuserBusch needs to possess similar level of visibility over their independent wholesalers as Proctor and Gamble has over its distribution centres. In this regards, 'Best-of-breed route accounting systems' possess certified integration back to the large beverage supplier firms. Through this integration, the large beverage suppliers are able to possess transaction visibility right through their distributed value chain. This collaboration allows product, pricing, and promotional information to flow from the supplier to the independent distributor. It also allows sales transactions to flow from the independent distributor back to the supplier so that the supplier can make available this information to the large (and demanding) retailers. Consequently, it is really the 'route accounting systems' which enable the large beverage supplier firm to provide retailers the e-commerce supply chain collaboration they require.
5. STRATEGIC POSITION OF ANHEUSERNBUSCH
In examining the strategic position of AnheuserBusch in relation to the market, the Ansoff matrix will be employed. The Ansoff matrix examined various aspects of the markets in which AnheuserBusch operates together with how it aims its products at different markets.
Existing products New products
-Stella Artois, Budweiser, Becks.
-Europe: Belgium, Russia, Germany, Spain, Romania, Finland, Sweden, United Kingdom
-Africa: Nigeria, Tanzania, Algeria & South Africa
-Brazil, Bolivia, Argentina, Paraguay, Peru, United States of America
Brahma, Bud Ice, Michelob Ultra, Harbin
China, India, Cameroun, Ghana, Kenya
Becks, Stella and Budweiser
Sedrin, Red Rock, Double deer, Harbin
Table 2: Ansoff Matrix for AnheuserBusch
5.1 Market Development
In terms of market development, AnheuserBusch has been operating in European countries, African countries and South American countries for some time (see Table 2). In these markets, AnheuserBusch has a solid market share and consumer base. In these markets, it sells its main beer brands which include; Stella Artois, Becks and Budweiser. Increased sales of these three main beer brands in its established markets have continued to increase except in 2009 when sales dropped a bit as a result of the economic recession. In spite of the economic recession, the global breweries industry has performed fairly compared to other sectors which have been hit hard by the economic recession.
5.2 Market Development
In spite of possessing a stable market share in its established markets, AnheuserBusch has also expanded into other foreign markets with its well known beer brands. Some of the new markets in which AnheuserBusch has expanded into include; China, India, Cameroun, Kenya and Ghana. An attractive market size and favourable economic conditions informed the decision of AnheuserBusch to expand into these markets. The main variables that was used by AnheuserBusch to consider entry into these markets include; close-knit markets (Nigeria (existing) and Ghana (new)), market size (China and India), efficient distribution channels (Nigeria can be used as hub for distribution in West Africa- to Ghana and Cameroun) and prospects as emerging economies (China and India).
5.3 Product Development
AnheuserBusch does not only sell its well known brands, like Stella Artois, Becks and Budweiser in its existing markets. It has also introduced some new and local brands into its existing markets. Some of these new products introduced into its new markets includes; Harbin, Michelob ultra, Bud Ice and Brahma. These products are increasingly gaining market share and popularity in its existing markets (see Table 2).
In terms of its diversification strategy, AnheuserBusch is exploring further markets in relatively new markets like China, India, Ghana, Kenya and Cameroun. Different variables are employed by AnheuserBusch when seeking new markets to expand into. Some of these variables include; close knit markets, status as emerging markets, economic conditions and market size. In terms of close-knit markets, AnheuserBusch uses Nigeria (an existing market) as a hub for exporting to close markets like Ghana and Cameroun. This represents a cheaper means of expansion. In terms of status as emerging markets, the Chinese and Indian markets are being explored by AnheruserBusch. In terms of market size, China and India also qualify.
6. AnheuserBusch: Information Systems strategy
The role of information systems in the change management process cannot be underestimated. When it comes to IT issues, the main challenge stems from how to effectively implement information systems in manner that it leads to lower inefficiencies. The increasing use of and implementation of IT systems within organizations is borne out of the need to support a decentralized management system within organizations especially in the light of the rapid pace of globalization. As organizations expand into foreign markets, so does the need to employ efficient information systems (IS) to enhance their operations. The information systems strategy within AnheuserBusch ought to be centred on effective flow of information both within the organization and external to the organization. The role of IT in the modern day business is both strategic and immense especially bearing in mind that information systems strategy is closely linked with other corporate-level strategies within an organization.
AnheuserBusch already possesses existing hardware and software to handle information flow both within and external to the organization. In spite of this, change can be implemented through the adaptation of existing information systems to new management information systems (MIS). Anheuser employs IT in the management of its operations both domestically and globally. While some of IT services are provided within AnheuserBusch, some other of its IT operations is outsourced. The importance of workplace services is responsible for the outsourcing of workplace services by AnheuserBusch to IBM and BT. This outsourcing contract entails the following deliverables; fully integrated workplace solutions with laptops and PDAs-this has helped to improve workplace efficiency and also communication effectiveness within AnheuserBusch, and the creation of flexible IT systems (open-ended technologies) that enable upgrades to be done at minimal costs. In terms of outsourcing to BT, BT is responsible for managing network and voice services for AnheuserBusch. In this respect, BT is responsible for designing and managing AnheuserBusch's network infrastructure, i.e. inclusive of both its LAN and WAN. This has helped to increase sharing of information across different foreign markets where AnheuserBusch is present. Again, AnheuserBusch possesses business intelligence infrastructure that enables it to monitor trends in global environment with regards to its core business of beer production. Again, AnheuserBusch outsources information systems for its logistics operations. Information systems have contributed immensely to the efficiency of AnheuserBusch's logistical operations globally. AnheuserBusch also uses business intelligence and data mining applications to monitor trends in the different markets in which it operates. This contributes to improving efficiencies especially with regards to prompt and targeted product delivery foreign markets in which it operates. It is also important to note that AnheuserBusch does not employ e-commerce applications for sales as most of its activities are wholesale activities which includes a network of distributors in different markets. In terms of e-commerce, AnheuserBusch uses e-commerce applications to manage its relationship with its network of distributors and producing units. The dedicated IT department within AnheuserBusch ought to be responsible for regular maintenance and updating of IT systems within organizations. The IT department is also responsible for ensuring that information systems strategy is aligned with corporate-level, i.e. deliverables from existing information systems (IS) within AnheuserBusch ought to enhance the achievement of organizational goals and objectives. Again, it is important to note that effectiveness of information systems is largely dependent on the involvement of employees within the organization especially with respect to facilitating communication within the organization.
Corporate strategic planOverview of information systems strategy for AnheuserBusch
Information security procedure
Service improvement projects
IT service continuity plan
Corporate governance & standards
Information systems projects
IT services business arrangement
Information systems strategy
Where do we want to be?
Where are we now?
How do we get to where we want to be?
Marketing & communications plan
Logistics & distribution plan
Research & Dev. strategy
Corporate information mechanisms
Figure 2: information systems strategy & plan for AnheuserBusch
Figure 2 is the detailed overview of information systems strategy within AnheuserBusch. In terms of operational IT management, the IT department is responsible for endorsing projects, overseeing processes and making operational decisions that oversee the daily management of IT service provisions. Such operational decisions include hardware maintenance and large-scale software development and implementation. Project management in the context of IS management will be conducted in the context of the Prince2 methodology; a methodology that supports change management especially from the IT perspective. In terms of IT security provisions for a large organization like AnheuserBusch, security implementation ought to be implemented in the context of international standards like the ISO 17999, especially bearing in mind the need for compliance with legal frameworks like the Data Protection Act of 1998.
7. FUTURE DIRECTIONS
The main vision of the information systems strategy is to deliver and provide information systems that make AnheuserBusch an interesting place to work whilst improving daily operational processes. Based on these observations, the following under-listed points have been developed as a future direction of the information systems strategy of AnheuserBusch:
A technical and network facility that has the capability to enhance demand on network activity and database activity. Such a facility should be able to support business survival whilst enhancing the sustainability of AnheuserBusch's corporate-level strategies.
An Information Technology/Information Systems facility that is adaptable to the changing needs of the external business environment. Such a facility will also enhance the efficiency of AnheuserBusch's employees.
An information system (IS) facility which enhances collaboration both within AnheuserBusch and in joint venture arrangements between AnheuserBusch and other organizations. This will ensure continuity of AnheuserBusch's strategy especially as the pace of globalization continues to increase at a rapid rate.
The implementation of information systems, especially from the change management perspective ought to be contextual. In this particular context, change management ought to be implemented in line with internal requirements and external (environmental) demands. Information systems ought to facilitate internal communication processes if it is to be effective in satisfying external demands. Information systems ought to be implemented across all aspects of an organization. In the case of AnheuserBusch, information systems must be used to facilitate logistical operations, sales operations, human resource management, and management of supplier relationships.