South African Breweries Case Study

 

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Analyze the sources of Competitive advantages for South AfricanBreweries (SAB) in South Africa.

FIRST-MOVER-ADVANTAGE

Founded in South Africa as early as 1880

’s

, they had the advantage of being one of the firstcompanies on the African continent (South Africa) to enter into the beer industry. It is knownthat first or early industry movers are more likely to succeed and continue to succeed in anindustry because of 

Being able to establish and build brand loyalty

Acquire and tie up the available distribution networks

Develop relationships with customers

Develop scale economies

Develop and tie up the supply chain

Establish firm relationships with legislators.

ECONOMIES OF SCALE

With a presence in more than 21 countries in Africa & Asia, SAB use their scale to generatemaximum value and competitive advantage.

It is the fourth largest brewer in the world (40mil hectoliters) and the largest brewer inAfrica (30mil hectoliters).

Accounts for over 50% of beer consumed in Africa.

SAB does the production & distribution of its main competitor, Guinness.

Does distribution of Heineken (third largest brewer in the world) in Africa.Being brewers & distributors gives them an competitive edge in the market place.

WELL-ESTABLISHED DISTRIBUTION NETWORK

SAB currently distributes its range of products through a highly developed network of distribution centers, comprising of SAB depots, contracted distributors and franchiseddistribution centers.

Simple & well designed distribution network to cater to the Traditional retailers.

Complex & Personalized network to cater to large number (approx ½ million) of informalretailers.

INDUSTRY FORESIGHT

An important component of the success of SAB has been its ability to forecast and predict whatit will need to do to remain successful. SAB has been well ahead of the industry in developingand commercializing new technologies

Operational Excellence in production, Packaging & Distribution.

Case Study on South African Breweries Ltd (Sab) Essay

3853 WordsJun 16th, 201116 Pages

Contents

Company Background 2 Challenge for the Company 3 Policy/ Strategy 3 Paradoxes and debates around strategy 4 Mintzbergs’ Theory 4 Strategy theory of Wittington 6 Planning procedure and strategic decision making 7 Adding Of Value 8 Keeping Balance In Globally and Locally 9 Considering Global Market 9 The Global Expansion Challenges for SABMiller 10 Conclusion 11 References 12

Company Background

South African Breweries Ltd (SAB) is one of the major global brewers. It is the supplementary of a South African company SABMiller plc. Now it has more than 200 brands brewing interest and circulation in 75 countries worldwide. SAB has the leading position to produce and distribute both alcoholic and…show more content…

SAB had to go on with the existing CEO as head of SABMiller and later on the sacked him. Altria holds 23 percent shares of SABMiller. According to some experts debates SAB has spent too much for acquiring Miller. Again SABMiller is also facing difficulties to keep up in the competition with the competitors in US market. In addition to this in America the Beer market is in downward trend as the Americans are continuously and increasingly turning to wine than beer. This has adverse impact on SABMiller’s profit margin. Another market dominant competitor Anheuser-Busch (AH) upgraded its profit margin to 17.3% by raising its production where Millers and Coors has (9.3%) and (8.9%) respectively. Then to compete with AH SABMiller and Coors went as a joint venture which has very positive impact on their business.

Policy/ Strategy

The long term direction and scope of a company which are aimed to achieve advantage for the organisation using its configuration or resources in a challenging surrounding is described strategy. In other sense strategy is –
-The place where the business aimed to reach in time span.
-The market where the business will compete and activities of the competitive market
-The process of doing better in this competition
-Required ability or resources
-How to get up with the external and internal environmental factors
-The values and expectation of the stakeholders

According to Henry Mintzberg

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