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DAMELIN
MASTER OF
BUSINESS ADMINISTRATION
SUBJECT
MARKETING MANAGEMENT
SABMiller plc
NAME OF STUDENT
LOURENS DU PLESSIS
00383513
COHORT
FEBRUARY 2003
POSTAL ADDRESS
BOX 6992
WESTGATE
1734
TELEPHONE NUMBER
+27 14 760 4873
082 334 1030
E-MAIL ADDRESS
lourens. ... za
DATE DELIVERED
18 June 2003
WORD COUNT
2555
TABLE OF CONTENTS
EXECUTIVE SUMMARY 3
QUESTION 1 6
QUESTION 2 16
QUESTION 3 21
BIBLIOGRAPHY 24
APPENDIX 25
EXECUTIVE SUMMARY
SABMiller plc strives to increase its long-term shareholders value. ...
SABMiller has strong internal business processes with well-developed distribution systems, which are seen as critical in the beverage industry. A reason for concern at SABMiller should be its Miller division. ...
SABMiller is a major brewer in emerging markets, such as Africa, India, Eastern Europe and China. ...
SABMiller’s current strategies of growth and optimisation seem to be very successful. ...
QUESTION 1
Analyse the current strategic position of SABMiller. ...
To better understand the strategic position of SABMiller globally. ...
I have combined the “Balanced Business Scorecard” (BBS) with the SWOT analysis in order to group factors into the BBS dimensions, thus presenting strategic objectives aligned with Kaplan & Norton’s principles of managing performance in a business (See Annexure B)
Internal Strengths
SABMiller had had the customer in mind when developing its strengths over time. ...
SABMiller has strong internal business processes with well-developed distribution systems, which are seen as critical in the beverage industry. ...
The final dimension of the BBS, learning & growth, shows SABMIller to own strong Intellectual Capital. People are arguably the most important internal strength that SABMiller owns. ... SABMiller. ...
Internal Weaknesses
A reason for concern at SABMiller should be its Miller division. ... (BBS, Customer dimension)
The financial risk exists that high debt exposure could tarnish SABMiller’s future returns. ... (BBS, Finance)
Even though SABMiller has some of the best managerial skills available, it could run the risk of becoming complacent. ... (BBS, Learning & Growth)
Beer has a relatively short shelve life and SABMiller’s internal business processes are exposed to the risks of too high inventory and transport lead times. ... SABMiller. ... com
External Opportunities in the Microenvironment
SABMIller has an excellent business opportunity to grow its premium beer brands in the international markets in which it competes. ... (BBS, Customer)
Selling off non-core related business interest form part of SABMiller’s current strategy of returning its focus to its core competency of brewing beer. ... (BBS, Finance)
SABMiller has used Joint Ventures to expedite entry into new markets. ... SABMiller has excellent optimisation know-how that it obtained from its diverse portfolio. (BBS, Internal Business Processes)
External Threats in the Microenvironment
Strong rivals in the USA and other developed markets pose the largest competitive threat to SABMiller. ... SABMiller has paid a large premium for the acquisition of Miller from Phillip Morris. If Miller doesn’t regain market share and improve on its profitability in the short term, it could seriously damage SABMiller financially. ... If other players rally to compete in acquisition bids, SABMiller might pay too much or loose acquisition bids. ... (BBS, Customer)
SABMiller is a major brewer in emerging markets. ... (BBS, Financial)
Macro-environment analysis
The PEST model approach was used to analyse the macro-environment in which SABMiller operates. (Annexure B, explains the PEST model approach)
Political factors
SABMiller brew in the same countries/regions where they sell, this reduces risk to the group. ...
SABMiller hasn’t in the past disclosed the size and timing of donations made to the ANC in SA. ...
The proposed new Liquor Bill due to be implemented in South Africa, have seriously negative implications to SABMiller. The Bill will make it impossible for SABMiller to continue to own its distribution channel. ... Outsourcing will weaken SABMiller’s position in Africa and make it more vulnerable to new entrance in the SA market.
Economic factors
SABMiller is a major brewer in emerging markets, such as Africa, India, Eastern Europe and China. ... SABMiller have marketed Amstel for example as an upmarket product that would appeal to successful professional people, and Carling Black Label as the strong working class man’s beer. ... SABMiller has used these technologies well in the SA market. ...
Competitive advantage
SABMiller has many attributes that its uses for a competitive advantage. The most important of which are:
Ř Brand equity
Ř Financial strength
Ř Wide geographic reach
Ř Intellectual capital
Ř Operations efficiency
Ř Distribution systems
SABMIller use these elements as a “lever” to gain an advantage in Acquiring and “turning-a-round” brewers Internationally. ...
It is important to note that whilst SABMiller has large investment in the Beverage industry it has sharpened its focus on brewing beer and is seeking ways of getting out of other beverage industries such as soft drinks. ...
QUESTION 2
Evaluate the marketing strategy of SABMiller in context of the market characteristics of the South African and International markets. ... Porter’s generic strategies model evaluated the general marketing strategy of SABMiller. ...
But in SA where the market has become saturated with established SABMiller products, a new strategy must be pursued if the firm is to continue to grow.
Market Development
Strong proven brands, such as the premium international SABMiller brands, are ideal for targeting existing markets with new products. ...
SABMiller should use this strategy for its prominent brands in the regions where these products dominate. ...
SABMiller in SA has marketed Amstel Lager as a premium brand for years, but Heineken has indicated that it will not renew the licensing agreement and want to market Amstel in South Africa.
SABMiller has to find an alternative to fill the gap prior to loosing its Amstel licence. ... SABMiller should invest and develop this brand to increase its long term earning potential. ... SABMiller’ has attempted to market their Copper Crest brand in other African countries like Namibia with limited success4. ... za “Nambrew & SABMiller, the fight in on” 24 Nov 2002. ... Critically analyse this statement in relation to SABMiller’s multi-domestic/global marketing concept. ... A combination strategy of standardisation and adaptation has been follow by SABMiller internationally. ... Source: SABMiller. ... SABMiller could see this as an opportunity to market low alcohol beers. ...
SABMiller has the Miller brand in the USA, which is a strong regional brand that could rival Budweiser in polarity. ...
It is clear that a combination strategy of standardisation and adaptation is the most suitable strategy for SABMiller to follow internationally. ... sabmiller. ... SABMiller is a significant player in this market. High High
Financial
Financial strength SABMiller reported a turnover of 4. ... Market share provides SABMIller with economies of scale. High Med
London & Johannesburg stock exchange listings, to raise capital SABMiller is listed on the London (FTSE 100 index) and Johannesburg (JSE 40) stock exchanges. ... Norman Adami, MD of SABMiller in South Africa left for the US in May 2003. ... SABMiller sees distribution as a major competitive advantage. “We believe that there are real opportunities to increase sales in this (premium beer segment) growing segment through leveraging our distribution platforms around the world High Med
Strong core competency of brewing beer SABMiller has brewing capacity of producing 120 million hectolitres of beer per year. ... The successful turn a round of Miller is seen as pivotal to SABMiller’s success. ... The beer was seen as the working class man’s beer, when SABMiller decided to change this brands image to a modern light beer. ... SABMiller has large investments in other industries, such as Gaming and Hotels. ... Low Low
Financial
Risk of high debt exposure SABMiller’s financial gearing rose to 48. ... High Med
Less available capital due to rapid expansion and joint venture deals Acquisitions cost large amounts of capital which reduce the availability of capital for other projects High Med
Over paying for new acquisitions SABMiller could over-pay for new acquisition as rival bidders compete for market expansion. ... High High
Grow our brands in the international premium beer segment SABMiller has the ability to launch new products easily through its infrastructure that is currently in place.
Approximate Word count = 6447
Approximate Pages = 25.8
(250 words per page double spaced)
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