Introduction: SABMiller Worlds second largest beer brewing South African based company. Founded in 1886 in Johannesburg, South Africa. Worlds largest bottlers of Coca-Cola products. Having opertaions and distributing channels across six nations.

GROUP VALUES Our people are our enduring advantage. Accountability is clear and personal. We work and win in teams We understand and respect our customers and consumers Our reputation is indivisible

GROUP VISION To be the most admired company in the global beer industry

GROUP MISSION To own and nurture the local and international brands that are the first choice of the customer

Strategic position : SABMiller 1. PESTEL Analysis

Political Factor:Limited %age of alcohol in developing economies like India ; due to regulatory reform.

Technological Factor: The group is refining capabilities by new programme to establish common techniques and discipline for rolling out international premium brands in new markets.

Economical Factor:Maintained its price cutting despite of the price rise in energy and aluminum industry. Targeting to expand in developing economies. Due restricted volume and pricing in the Indian beer market the focus is on increasing capacity, quality and productivity.

Environmental Factor:Not available in the case.

Legal Factor: Licensing of shebeens helped them to operate more professionally by bringing the unofficial outlets into retail mainstream.

Social Factor:Maintained firm prices to protect brand equity from the local competitors. Facing competition from its substitute products like soft drinks, wine and spirits.

Strategic position : SABMiller 2. Porters five forces1. Threat of New Entry: Low

3. Bowman's Strategic ClockHigh Hybrid 3 PERCEIVED ADDED VALUE Differentiation 4 Focused 5 differentiation Increased price/ Standard value Low price 2 6 Increased price/ Low value 7 8 Low value/ standard price High

2. Power of Buyer: Low Even though the prices have marginally increased consumers still buy the brand as there is also a noticeable increase in the spending power of consumers. 3. Threat from Substitute: High (a) Rising soft drink sales. (b) Change in taste towards Wine and Spirits. 4. Power of Suppliers: No Information in the case. 5. Competitive Rivalry: Low (a) Improved sales, marketing and distribution operations. (b) Flexible production facility. (c) Maintains firm price in competition to its rivalry by protecting its brand equity.

1 Low price/ low added value Low Low PRICE

How? 1. SABMiller is into JV with casino, Hotels and gambling. 2. It is successfully entering into acquisition with international and local brand globally further by adding value and improving the quality. 3. Diversifying local brands in global market.

Strategic Focus : SABMiller As a conclusion:

Ansoff matrixExisting Product New

Existing

Market Penetration 99% of the local market is controlled by SABMiller.

Product Development SABMiller is into JV with Hotels, casino and gambling

Market

New

Market Development AcquisitionMiller America (2002). Grupo Empresarial Bavaria Latin America 2005

Diversification Expanding the premium segment in developing economy.

Core Competencies and Capabilities: SABMiller Following is presented by using resource based view:

ResourcesThreshold resources a) Capabilities are now refined through new programme to establish common techniques and discipline to roll out the premium brands in new markets.

CompetencesThreshold competencies a) Improved marketing and distribution techniques. b) Improved productivity c) Worlds second largest brewing corporation having developed their base global market.

Threshold capabilities

b) Experienced and well trained staff. c) SABMiller being listed on LSE; gives the access to world market providing it with financial resources and flexibility to pursue in the market. Unique resources (a) Wide range of brand portfolio. (b) Experience in management skills and operating practices.

Capabilities for competitive advantage

Core competences Explained on the basis of five criteria.

Core Competencies: SABMiller Value of strategic capabilities Rarity of strategic Inimitable capabilities strategic capabilitiesThey maintain brand loyalty by not diminishing the acquired local and international brands of other economy.

Non- Suitability Dynamic of Strategic Capabilities capabilitiesIncreased competitive environment from substitute products. Developing common techniques and programme to produce international premium brands in new markets.

Firm prices in competition to their rivalry and by providing premium drinks.

Future Strategy: SABMiller

Choice criteria: SABMiller a) Suitability

SABMiller should produce beer that can match the blend and the taste with the consumers of a particular economy. Benefits? Maintain brand loyalty. SABMiller should enter into JV with reputed hotels, gambling and casinos of the other developing nations. How? By having SABMiller exclusively ownedbars in the organization.

STRENGTHS a) Worlds second largest brewing company. b) Having a wide portfolio of international and local brands. OPPORTUNITIES a) Booming industry in developing nations. b) Strategic alliances

WEAKNESS a) High gearing ratio.

THREATS a) Slow growth in European destinations.

b) Acceptability (Returns, Stakeholder reaction and Risk)Although knowing that there is a high gearing ratio; the company can take this risk of expanding in these sources using its core competencies.

Benefits? Firstly, Increase in the portfolio ofbrands. Secondly, the earnings from that source can be used to provide a charity to minimize HIV in South Africa. Thirdly, Increased earnings in different currency.

c) Feasibility

(Financial capability and Resource deployment)

SABMiller can make use of there unique resources that will make it feasible for them to implement this strategy.