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Download Justin Read ANALYSIS OF THE GLOBAL BEER INDUSTRY AND COMPARISON OF COMPETITORS AB INBEV AND SABMILLER

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  • Slide 1
  • Justin Read ANALYSIS OF THE GLOBAL BEER INDUSTRY AND COMPARISON OF COMPETITORS AB INBEV AND SABMILLER
  • Slide 2
  • ROADMAP Overview of the Global Beer Industry and the Big Four PESTEL Analysis of the Global Beer Industry Industry Driving Forces Strategic Group Map of the Big Four Industry Key Success Factors Competitive Strength Assessment of the Big Four Five Forces Analysis of the International Beer Industry AB InBev Company Profile and Performance SABMiller Company Profile and Performance Recommendations for AB InBev and SABMiller
  • Slide 3
  • GLOBAL BEER INDUSTRY HAS BEEN GROWING STEADILY From 2009 to 2013 the Global Beer Industry has performed in the following ways: Average year on year revenue growth of 2.7% Average year on year volume growth of 2.1% In 2013 the total market revenue was approximately $514.5 billion Net revenue was approximately $177 billion EBIT was $35.2 billion Average profit margins are about 20% Global beer market projected to grow 3.4% from 2013 to 2018 (Global Beer Industry Profile)
  • Slide 4
  • Slide 5
  • Slide 6
  • (AllianceBernstein)
  • Slide 7
  • PESTEL FACTORS: POLITICAL FACTORS INDICATES MODERATE IMPACT ON BEER INDUSTRY (AllianceBernstein) (Global Beer Industry Profile)
  • Slide 8
  • PESTEL FACTORS: ECONOMIC FACTORS INDICATES REGIONAL IMPORTANCE FOR BEER INDUSTRY (AllianceBernstein) (Global Beer Industry Profile)
  • Slide 9
  • PESTEL FACTORS: SOCIOCULTURAL FACTORS ARE POSITIVE FOR THE BEER INDUSTRY (AllianceBernstein) (Global Beer Industry Profile)
  • Slide 10
  • PESTEL FACTORS: TECHNOLOGY AND ENVIRONMENTAL FACTORS ARE GLOBALLY SIMILAR (AllianceBernstein) (Global Beer Industry Profile)
  • Slide 11
  • PESTEL FACTORS: LEGAL FACTORS ARE SIMILAR IN AIM BUT DIFFER IN IMPACT BY REGION (AllianceBernstein) (Global Beer Industry Profile)
  • Slide 12
  • (AllianceBernstein)
  • Slide 13
  • INDUSTRY DRIVING FORCES INDICATE THE IMPORTANCE OF THE EMERGING MARKETS Change in Long-term Growth Rate US and European markets saturated, slowed overall growth Emerging markets beginning to accelerate in growth Increasing Globalization Opening of the emerging markets to the beer industry Marketing Innovation Shift towards engaging consumers digitally and more accurately Growing Preferences for Differentiated Products Ciders, occasion specific drinks, near beer, pre mixed drinks, fruit beer Consumers in all markets are open to non-traditional beer products (AllianceBernstein)
  • Slide 14
  • (Theheinekencompany.com) (SABMiller)(AB InBev) (Grundberg)
  • Slide 15
  • KEY SUCCESS FACTORS HIGHLIGHT IMPORTANCE OF EFFICIENCY AND COST REDUCTION Water and Energy Efficient Production Sustainable image, reduce input costs, promote water security Economies of Scale Mass-market segment, price based competition Largest segment of beer sold Changes in Cost and Efficiency Includes two previous factors, large part of competitive advantage in industry (AllianceBernstein)
  • Slide 16
  • KEY SUCCESS FACTORS HIGHLIGHT IMPORTANCE OF EFFICIENCY AND COST REDUCTION Strong Network of Wholesaler/Retailer Distributors 45% of beer sold to retailers - supermarkets, 33% to on trade - restaurants Breadth of Product Line Consumers demand a wide range of product and increasingly new products Well Known and Recognized Brand or Brand Portfolio Important to stand out in groups of random brands, customer loyalty (AllianceBernstein)
  • Slide 17
  • COMPETITIVE STRENGTH ASSESSMENT REVEALS AB INBEV AND SABMILLER LEAD THE PACK (SABMiller)(AB InBev)
  • Slide 18
  • COMPETITIVE STRENGTH ASSESSMENT REVEALS HEINEKEN IS A SOLID THIRD PLACE (Theheinekencompany.com)(Grundberg)
  • Slide 19
  • Threat of New Entrants -- Moderate + Increase threat of new entrants: readily accessible suppliers, retailer need to stock a wide range of beer, many underserved regions with high growth prospect, national breweries enter global market - Barriers to entry: Capital investment in brewing equipment, need for international supply chain, establishing distribution networks, government regulation, oligopolistic market, global brand recognition Threat of New Entrants -- Moderate + Increase threat of new entrants: readily accessible suppliers, retailer need to stock a wide range of beer, many underserved regions with high growth prospect, national breweries enter global market - Barriers to entry: Capital investment in brewing equipment, need for international supply chain, establishing distribution networks, government regulation, oligopolistic market, global brand recognition (Global Beer Industry Profile)
  • Slide 20
  • Threat of Substitutes Moderate to Strong + No switching costs for end consumers of beer and substitutes +/- Retailers like supermarkets need to stock a wide range of beer and substitutes, they arent likely to replace beer with substitutes. Threat is strong but consistent and limited +/- On trade retailers, like restaurants and bars, tend to heavily favor beer or one of its substitutes and arent likely to change Threat of Substitutes Moderate to Strong + No switching costs for end consumers of beer and substitutes +/- Retailers like supermarkets need to stock a wide range of beer and substitutes, they arent likely to replace beer with substitutes. Threat is strong but consistent and limited +/- On trade retailers, like restaurants and bars, tend to heavily favor beer or one of its substitutes and arent likely to change Threat of New Entrants -- Moderate + Increase threat of new entrants: readily accessible suppliers, retailer need to stock a wide range of beer, many underserved regions with high growth prospect, national breweries enter global market - Barriers to entry: Capital investment in brewing equipment, need for international supply chain, establishing distribution networks, government regulation, oligopolistic market, global brand recognition Threat of New Entrants -- Moderate + Increase threat of new entrants: readily accessible suppliers, retailer need to stock a wide range of beer, many underserved regions with high growth prospect, national breweries enter global market - Barriers to entry: Capital investment in brewing equipment, need for international supply chain, establishing distribution networks, government regulation, oligopolistic market, global brand recognition (Global Beer Industry Profile)
  • Slide 21
  • Bargaining Power of Suppliers Weak to Moderate + Breweries rely heavily on third party suppliers and have minimal vertical integration + Grain suppliers can serve other buyers in the alcohol industry, agriculture industry, or food industry - Hop growers operate on a smaller scale, reducing bargaining power - Low switching costs for breweries when moving between suppliers Bargaining Power of Suppliers Weak to Moderate + Breweries rely heavily on third party suppliers and have minimal vertical integration + Grain suppliers can serve other buyers in the alcohol industry, agriculture industry, or food industry - Hop growers operate on a smaller scale, reducing bargaining power - Low switching costs for breweries when moving between suppliers Threat of New Entrants -- Moderate + Increase threat of new entrants: readily accessible suppliers, retailer need to stock a wide range of beer, many underserved regions with high growth prospect, national breweries enter global market - Barriers to entry: Capital investment in brewing equipment, need for international supply chain, establishing distribution networks, government regulation, oligopolistic market, global brand recognition Threat of New Entrants -- Moderate + Increase threat of new entrants: readily accessible suppliers, retailer need to stock a wide range of beer, many underserved regions with high growth prospect, national breweries enter global market - Barriers to entry: Capital investment in brewing equipment, need for international supply chain, establishing distribution networks, government regulation, oligopolistic market, global brand recognition Threat of Substitutes Moderate to Strong + No switching costs for end consumers of beer and substitutes +/- Retailers like supermarkets need to stock a wide range of beer and substitutes, they arent likely to replace beer with substitutes. Threat is strong but consistent and limited +/- On trade retailers, like restaurants and bars, tend to heavily favor beer or one of its substitutes and arent likely to change Threat of Substitutes Moderate to Strong + No switching costs for end consumers of beer and substitutes +/- Retailers like supermarkets need to stock a wide range of beer and substitutes, they arent likely to replace beer with substitutes. Threat is strong but consistent and limited +/- On trade retailers, like restaurants and bars, tend to heavily favor beer or one of its substitutes and arent likely to change (Global Beer Industry Profile)
  • Slide 22
  • Bargaining Power of Buyers Moderate + Supermarkets represent almost half of all buyers, and are often consolidated + Small or non-existent switching costs for buyers + Producers sell only a small amount of their product, rely heavily on retailers. - Large buyers, like supermarkets, need to stock a wide range of beer - Many oligopolistic markets, with limited choices for buyers to switch to Bargaining Power of Buyers Moderate + Supermarkets represent almost half of all buyers, and are often consolidated + Small or non-existent switching costs for b

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