Challenges Of Becoming A Global Brewer Commerce Essay

The South African Breweries Limited ( SAB ) was founded in 1895 and today SABMiller holds 98 per centum portion of the beer market. Jones, Adam ( 2003 ) . In 1895 The South African Breweries Limited ( SAB ) is incorporated in London. SAB gain an ownership of Castle Brewery in Johannesburg, South Africa. In the same twelvemonth company got a listing on London stock exchange, a trade name new merchandise Castle Larger got launched from a new commissioned laager brewery holding capacity of 50,000 barrels per annum.

In 1897 SAB got a place in Johannesburg Stock Exchange, SAB was the first industrial company which got listed on the Johannesburg Stock Exchange and got foremost industrial portion.

In 1898 SAB started bring forthing Castle laager, which becomes a phenomenal success.

In 1911 SAB started importing seeds free of charges and reduced to purchase harvest at market monetary values which consequences in stimulation in local market.

In 1925 by purchasing a interest in the Schweppes Company, SAB diversifies into soft drinks.

In 1950 SAB moved head office from London to Johannesburg.

In 1956 SAB purchased Ohlsson ‘s Cape Breweries and Chandlers Union Breweries take, ensuing brotherhood of three largest South African brewing companies and SAB gained 90 per centum of the domestic market. .

In 1994 by deriving joint venture with China Resources Enterprise Limited, SAB accessed in the Chinese beer market.

In 1999 SAB reestablished central offices in London. SAB ‘s divestment plan reduces involvements in beer, soft drinks, vinos and liquors, and hotel and gambling.

In 2000 SAB gain an accessed in Indian market by geting Narang Breweries and purchased its first brewery works.

hypertext transfer protocol: // pageid=27 ( Accessed: 17/12/2009 )

Constitution OF SABMILLER:

In 2002 Company changes its name to SABMiller as SAB acquired figure two U.S beer shaper Miller Brewing Company for $ 3.48 billion in stock.

In 2003Company purchased 60 % stocks of Birra Peroni, Italy ‘s figure two beer maker. This was the first major investing SABMiller did in Western Europe.

In 2005 Company merge with a Grupo Empresarial Bavaria, South America ‘s 2nd largest beer maker

In 2008 SABMiller got control over Grolsch by acquisition and announced the building of a new drink works in Juba, Southern Sudan. hypertext transfer protocol: // pageid=27 ( Accessed: 18/12/2009 )


Harmonizing to many writers, Strategy plays an of import function in organisation for accomplishing nonsubjective and acquiring exposure in the corporate market, for illustration harmonizing to Andrews ( 1980 ) scheme can specify assorted factors of an organisation such as company policies, its scope of concern, its human and economic organisation and its part to stakeholder. Johnson and Scholes ( 1999 ) cited scheme as a range and way of an organisation over the long term period. To run into the proper demand of markets and to carry through stakeholder outlooks, organisazation must use proper constellation of resources within a flexible environment to derive advantage. Harmonizing to Grant ( 1995 ) corporate scheme trades with the ways in which a corporation manages a set of concern together.

By understanding the constructs of these writers and to place the Strategic place of SAB it is must to analyse factors like concern environment, nucleus competences, capablenesss and stakeholder outlook, and these factors will be analyze by utilizing PESTEL analysis and SWOT analysis.

SABMiller is a operating throughout the universe and its networking is globalized if we compare its place in twelvemonth 2007. It is holding a good developed and mature market in many states throughout the universe, such as South Africa ( Local market ) , Rest of Africa, Asia and Eastern Europe, USA and Western Europe, Latin America. Let us discourse different markets of SABMiller throughout the universe.

SABMiller is holding a well known and traditional market in South Africa. SABMiller monopolized different industries. Gross saless show that the growing potency is really low but net income factor is still at that place as clients are merchandising up to the sections. AIDS is a immense menace for the company in footings of handiness of work force and this will play a negative impact on the disposable income of the population which will impact SABMiller. The market in South Africa is under menace.

The market in Rest of Africa is extremely possible holding volatile political landscape. Business in Rest of Africa is explore and presence in Tanzania, Zambia, Mozambique, Angola and many on and still go on to turn, which is helped by clear cleavage scheme and by border distribution. These markets trade in soft currencies which is a really hazardous factor as seen in Botswana. By analysing these markets in SABMiller portfolio the hazard factor might lose assurance from stakeholders, as many nucleus competencies of SABMiller were developed in these markets.

Markets in Asia and Eastern Europe show different features like extremely fragments, increasing disposable income and Due to these features SABMiller gain an easy entree to come in into these markets. While perforating in Indian and Chinese market, SABMiller faced different jobs like ordinances and high competition but they are still researching and spread outing themselves in the markets like Vietnam.

The markets in Western Europe and USA are really different to the one time that SABMiller used to run, as these are extremely saturated and concentrated. Due to the perceptual experience made by stakeholders they traded excessively much utilizing soft currencies. Miller started losing market rapidly and SAB took an advantage over it and convey its ain public presentation evaluation System to supervise employee.

SABMiller perform really good in Latin American market. They were invariably making their best in Latin American market. SABMiller put great attempts to take over Grupo Empresarial Bavaria and they have done it.

PESTEL Analysis:


While covering with authorities a great political sensitiveness is needed.

SABMiller faced jobs in Regulation and Quality Torahs ( e.g. States like India and China ) for bring forthing beer in big measure and to derive economic system of graduated table.

Productivity got affected due to the political stableness in certain states like Botswana.


SABMiller got truly hurt because of devaluation of soft currencies.

Markets in India and China gave really low net income border.

A extremely lifting cost of energy and aluminium affects the profitableness.

Latin market of SABMiller increased from 25.2 to 52.1 % which make harder to acquire out money from the market.

Development of Fragmented market facilitate easer coup d’etat.


SABMiller got adversely affected by new tendencies like vinos and Liquors.

Life styles in emerging markets have changed and beer ingestion got increased due to the addition in the handiness of disposable income.

A annihilating consequence


Due to modern machinery, new wadding can be easy introduced as evidenced in Czech.

Easier to pull off the of all time broadening distribution web.

A fluctuation of beer got introduced in to the market.


SABMiller ‘s profitableness adversely got affected due to weather status in Latin American market in 2006.


Due to the local jurisprudence, coup d’etat efforts may bring forth jobs.

SWOT Analysis:


Very strong in local market.

Excellent portfolio and a big trade name.

High operational productiveness.

Different accomplishments to win in developing markets.

Economy graduated table is really high due to big market portions in some markets.

Strong distribution channels and planetary networking.


Inclination of acquisitions.

Dependability over the Soft currency.

Expertise limited to the brewing industry merely.

Government acts as a key participant, as chief market are in extremely volatile countries like Africa and Asia.


Strongly growing of emerging markets.

It is easy for SABMiller to purchase in to a market with the aid of extremely disconnected developing grade


AIDS job in South Africa.

Constantly lifting cost of energy and aluminum affects the SABMiller profitableness.

Strong competition in states India and China.

SABMiller got affected adversely due to the new tendencies like vinos and liquors.


A current strategic place of SABMiller ‘s has provided information about chances and challenges which it face in its concern environment but it does non fit with interest holder outlooks, nucleus competencies and market world because of which a quandary got generated for SABMiller.

To acquire proper scheme execution in future for SABMiller a tool Ansoff Matrix is used. There are different picks available to SABMiller.


By keeping houses in the developing market this scheme will concentrate on cut downing market hazard like Western Europe, USA and Africa. This does non give any importance to competencies developed by the company by originating hazardous moves. As the company is extremely efficient it is easy executable. But the chief issue is acceptance of this scheme as interest holders would non be truly happy with this pick.


This is really flexible and aggressive scheme where by company can react by developing new merchandises to the market. Premium beer section is quickly turning, as company will acquire a good merchandise chance. For most parts, this scheme will be a usual concern scheme and will construct on what company has been making throughout the twelvemonth. But the growing of future is balance without any guarantee as clients ( Drinkers ) can be ferociously loyal to their existing trade name. Stake holders will certainly accept this scheme as it is surely executable.

Market Development:

A new market section is called as market development. SABMiller is holding an first-class repute in the brewing industry and by utilizing this scheme SABMiller can easy tap out its rivals. African market is holding a high potency for enlargement of SABMiller. But little factors like AIDS, political instability and soft currencies are worrying the stakeholders if SABMiller decided to spread out in Africa. This scheme will give extremely profitable in markets like Asia, Eastern Europe and Latin America, as Miller addition success in Russian market by utilizing this scheme. The job which may happen will be of stakeholder ‘s outlook and which wholly depends on market status.

Joint Ventures:

This is the scheme which will be utile for the SABMiller in USA and Western European market. A joint venture with a major western beer maker can convey to the tabular array what SABMiller lacks ( Penetration into competitory and concentrated market ) . But the job is of hazard factor. As it is really hazardous concern, opening up the developing markets to high profile rival.


It is the least attractive scheme which SABMiller can utilize as an option. SABMiller is one of those companies which are holding a true portfolio direction. The execution of synergism portfolio logic will be interested to see as it can work in favour of SABMiller by adding concern to its portfolio which gives compliment and support to its core brewery concern.


MARKET Penetration:

Introduction of SABMiller ‘s premium trade names in the USA and Western European market.

Market Development:

Global enlargement, peculiarly in developed and saturated market.

New breweries in states like Indian, Chinese and Vietnam.

Development in boundary line distribution channels in Africa.


Rapid growing of premium section offers merchandise development chance to SABMiller.


SABMiller is already holding true portfolio of hotels, chancing centres and a lucifer mill.


From the past history SABMiller has shown a nucleus competence in developing schemes and environmental scanning. The failure of penetrating in the concentrated market and to support its market from emerging rivals must be a ambitious undertaking for SABMiller. In future SABMiller have to confront tough competition from its challengers. The key to SABMiller ‘s success will be a proper execution of scheme and its trade name portfolio.


Hi there, would you like to get such a paper? How about receiving a customized one? Check it out