SABmiller Strategy Case Study

3.1 Strategic position SABMillers one strategy is continuing to acquire other companies around the world and continuing to expand, especially in developing countries. As we all know, SABMiller and Molson Core, the two sides decided to merge operations in the United States and Puerto Rico. The two sides announced that it would form a joint venture. Johnson, Scholes & Whittington (2008) defines corporate strategy as sum of companies’ objectives and goals and its plans for pursuing those purposes. According to Andrews (1980) corporate strategy can define the company policies, its range of businesses, and its human and economic organization and its contributions to stakeholder. From there definitions it is clear that one should analysis SABMiller business environment, core competencies & capabilities and stakeholder expectation to identify SABMiller strategic position. SABMiller in current strategic position has provided us with a clear picture of the opportunities and challenges that the SABMiller operating domestic, worldwide and its growth come though entering developing market, acquiring businesses brands, and growing them it face in the business environment but stakeholder expectation, core competency and market the reality is the strategy not match to business environment which will create a big dilemma for SABMiller. Consolidation exam of that the reducing the risk that associated the more developed market like Africa, Europe and US will ensured as firm in base of possibility of emergent market might reducing the risk on vulnerable region. It would be feasible particularly given SABMiller’s competence that been responded by obtaining the business success in the risky market. Further more while it is undoubtedly possible to improve the company’s position in developed markets improvement need might quite marginal.

3.2 Table 1: Mission, Vision and Strategic Objective

Mission Statement:

Stability of reputation of the company

Leverage the local and global market

Increasing the number of demand

Job opportunity to the local and global environment

Leverage the new branding production.

Competitive advantage

Strategic Objectives:

Assessing Reach and development R&D of the brewery

Analyzing the demand of the customer

Reaching the stability of the economic

Considering Non-factor qualitative

Differentiation of the new product

Visions Statement:

Leverage the production and stability of the company reputations of the SABMiller.

Number one operational in the market

The mission and vision of the SABMiller Company will be leverage is there company will focus in certain area providing of the strategy objectives by reach and develop the production and merger to the other develop market and to be number one to the industry and help the stability of economic to the environment of the global and market place.

3.3 Strategic Options

Using the Porter’s Generic Strategic, Ansoff’s Matrix and BCG Matrix to help me evaluate and analyzed the following strategy option 1 product development, option 2 market developments and option 3 joint venture.

The fist strategic choice is product development to diversity the production of improvement and growth of the quality product.

For option 1 according to generic strategy the product development need to focus and diversify the differentiation product strategy which SABMiller has a unique product and might reach the target scope industry worldwide. Differentiation strategy like creating a new product like wine or liquor and sell it on the low cost of production that can effectively bust on the target scope of SABMiller. For option 1 according to ansoff matrix the product development and diversification will achieve the existing production and entering new market of the new product of the company with diversification. Product development not only in the brewery SABMiller has a lot of potential to diversify other product and continue to develop it but its must be depends to the demand of a customer. Diversification of the new product for a new market potential are more reliable to manipulate by SABMiller. For Option 1 according to BCG Matrix the question marks for SABMiller creating a new product to the new market it will be risk to the cost of production if the new product didn’t exist to the market pretty hard to consider and evaluate what customer wants and need.

The second strategic option is market development which is SABMiller has an opportunity to entering new market in any country that need to develop or re develop a production to increase higher profit and market share in every country.

For option 2 according to generic strategy the low cost of leadership will achieve by having the lowest prices of the product in the target market segment, or at least the lowest price to value ratio (price compared to what customers receive). Offering the lowest price while still achieving profitability and a high return on investment, the firm must be able to operate at a lower cost than its rivals of the market. Since the SABMiller operating entire of the country they have some disadvantage of lower customer loyalty, as price-sensitive customers will switch once a lower-priced substitute is available. A reputation of the SABMiller leader may also result in a reputation for low quality, which may make it difficult for a firm to rebrand itself or its products if it chooses to shift to a differentiation strategy in future. For the option 2 according to ansoff matrix is market development strategy must be focus on develop a cost leadership may have the disadvantage of lower customer loyalty, as price-sensitive customers will switch once a lower-priced substitute is available. A reputation as a cost leader may also result in a reputation for low quality, which may make it difficult for a firm to rebrand itself or its products if it chooses to shift to a differentiation strategy in future. For option 2 according to ansoff matrix the market development is need to focus and come out new product for the new market based on the case study the SABMiller existing product only a beer that they has a multi distribute to other county if they develop the new market they need to introduce new product. For option 2 according to BCG matrix the market development is start because if the market development will continue to develop in every market of the country the SABMiller will foresee to success.

The third strategic option is joint venture to associate other developed or developing country to leverage a good stability of the SABMiller market to other county.

For option 3 according to generic strategy the joint venture is differentiation not only in the product to the other association of the market every country has a different market joint venture will giving a knowledge for the local market and will giving to SABMiller new idea how to difference the product to distribution country. For option 3 according to ansoff matrix the joint venture creating a new product using there current existing market in worldwide the interrogate of changing market esp. thru technology will affect the connection of the associate people to the joint venture. For option 3 according to BCG matrix the joint venture is cash cow coz its still need to re engineer the product strategy and to re develop more joint venture to the other country but to joint venture to other country will cost higher volume of the money and massive of reaching for the company will join on SABMiller company.

3.4 Recommendation for SABMiller company are product development and differentiate there existing product and the new product considering to the other demand of other country and focus to the technology ever market will interrogated of the technology. Product development still consider the effectives of the new production so far based to the case study new beer products and transference of the beer products and brand between market. They need to be transferring brands across different market and across region for example selling different brand outside of southern African it could carry on doing well and it will expand using channel to introduce brands from across the world new market however this may not provide of the SABMiller company with the sort of growth that is now being expected of it and it may underestimate the value of loyalty across the world. Differentiate to the existing product and new production will help to increase the continue of the market growth of the SABMiller esp. across the region they need to evaluate the region market before they will entered to the new market region population of the region and analysing economic will help to cane out with the uniqueness new product but still need to invest higher capital. Joint venture to the local region will give a larger opportunity to be success but investing to the new region with new joint venture will be a area of critical long term growth, But may require a great deal patience but the SABMiller company must meet the expectation of the stakeholder and the other particularly intuitional investor across the region coz there following the insistence on the need for hard currency growth with the presence of the new countries opportunity for growth. Evaluating and analyzing will help to SABMiller to be secure there company reputation across the region and to the future market region.