Sabmiller Is A Premier Brewer Commerce Essay

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SABMiller has a widespread demographic presence around the world that would make it a stable player in the industry. The strong roots of the brand at the local level is a positive sign of its strong presence in the global market. The management of the company knows that by focussing on the stable growth of profits, operational performance and reputation, a high level of stakeholders' satisfaction can be achieved. The philosophy of the company to collaborate the diverse skills set and managing both front and back office systems may lead it to the competitive advantage in the future (SABMiller, 2013b).

Vision:

The company is determined to be a premier producer in the global beer industry with strong relations with its all stakeholders.

Mission Statement

To strive for making the company as the first choice of both domestic and international brands in order to serve all associated customers.

Strategic Objectives

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The strategic objectives should be based on innovation, quality, marketability, customer-understanding and reliability.

Answer 3

Porter Five Forces and SABMiller:

Porter five forces model is the perfect model to analyse external factors which can affect the business operations and strategy of any company.

Threat of New Entrance:

SABMiller works in a highly competitive industry which prevents local and small-scale manufacturers in the market. The threat of new entrance is very limited to this industry. So, it can be extracted that the market is in the hands of few big market players. However, a few years ago, SABMiller experienced a price war in the US which could no longer be sustained. The main reason behind this strength is that major beer brands are associated with this company (Kollewe 2006).

Bargaining Power of the Suppliers:

Followed by AB InBev, SABMiller is the world's second largest brewer. So, it not only enjoys the economies of scales but also lowers the bargaining power of the suppliers because of its global leverage power (Smith, Jones 2010).

Bargaining Power of the Buyers:

There is no doubt that market or customer buying power affects the revenue of the business; however, SABMiller is a globally established company which has diversified its risk. So, in case, one country is under-performing or generating low sales, it covers its revenue by promoting sales in those countries which have the potential to generate more profit.

Substitutes:

The beer industry has loyal customers. Although, various established brands are associated with this company, customers rarely switch to the cheaper beers. So, switching to the other products is very low particularly in this industry.

Competitors:

SABMiller has established its market position in almost all developed countries. Therefore, the threat of existing rivals is very low (Zekaria 2012). However, the Company is expecting challenges while introducing business in emerging countries like India, China and other Asian and African countries.

Ansoff'ss Matrix and SABMiller:

Ansoff's Matrix evaluates the current business strategy in perspective of market and products. In other words, it shows how business is attacking into the market with its existing and new product.

Market Penetration:

SABMiller is already a market leader and has introduced various premium brands in all over the world (Smith, Jones 2010). Its main brands are: Castle, Lion Lager, Safari, Blue Moon and Golden Light etc. So, it is already performing like a market leader with its enriched product portfolios.

Market Development:

Its market has already expanded in all developed countries. It is one of the few old beer manufacturing companies and has loyal customers. However, it is extending its business to China, Vietnam and India to get those emerging markets to increase the sales. For instance, Snow Beer, a product by the joint venture of SABMiller and China Resources, has been sold more than 91.7m hectolitres in the China which has crossed the sales of the beer in Germany (Lucas 2012). That's shows the success of the company in the development of the new markets.

Product Development:

The company has launched a premium beer product line for the executive class to generate revenue from its existing customers. The company focuses on hotels and casinos to place its premium beer products.

Diversification:

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Asian emerging markets are the target of the SABMiller. It has already jumped in the markets of China, India, Vietnam and Singapore to increase the volume of sales. Its strategy is to introduce new products with the joint ventures of the existing market players of these countries. For instance, SABMiller and China Resources introduced a new product name Snow Beer in the China (Lucas 2012).

Boston's BCG Matrix and SABMiller:

This model is used to evaluate the business and product portfolio in perspective of market share and growth rate.

Stars:

Peroni Nastro, Miller Genuine Draft and Pilsner Urquel are in high demand and have high market share especially in Asian and Eastern and Latin American markets. SABMiller is investing a lot of money on these premium brands to get the maximum sales. For this, it is marketing its products in hotels, casinos and gambling points sweep away the market.

Cash Cows:

SABMiller has a high market share in the USA and South African markets. In fact, it has reached to the maturity point of the sales. Although in 2006 company faced the price war but this could not be longed for more than a few months (Kollewe 2006).

Question Marks:

Two of its confusing markets are Vietnam and African countries (excluding South Africa). Although the company is investing in these markets but products are unable to gain high market shares. It will take around three years to fully establish the business operations in these regions.

Dogs:

There is no doubt that the products of SABMiller are very supportive to get the market share but this is not applied all the time. The company is striving very hard to fully capture the emerging markets but it will take some times to fully adapt to the new business environment. The company is searching for distributors and suppliers to fully jump into these markets. All of these cannot be done without the joint ventures of the local companies. On the other side, low buying power of the customers is also a big hurdle to get the market share and growth of its products in these markets (McQuade, Johnson 2005).

Answer 4

Although all of the three business models are very important to evaluate the business, product and market position before taking any sensible strategic decision; however, I would suggest Porter five forces model for the company like SABMiller. The main reason to adopt this model is that the company is investing in emerging economics to start its business. In this scenario, it is very important to understand the market situation before investing money in new markets. Not only it helps to establish the business but also assist to cope with the existing market players.