...SABMiller case study 2009. SIAMAK MOULAEIFAR 20207133 Introduction: SABMiller (SAB) plc is the second largest brewers in the world with brewing interests or distribution agreements in over 75 countries across six continents. The group’s brands include premium international beers such as Miller Genuine Draft, Peroni Nastro Azzurro and Pilsner Urquell, as well as an exceptional range of market leading local brands also SABMiller is one of the world’s largest bottlers of Coca-Cola products. (The SAB Miller, 2009) Exhibit below provides a summary scope of SABMiller operation today. (Below figures refer to year ended 31 March 2009) Source: www.sabmiller.com The purpose of this report is to discuss the strategic position of SABMiller in 2009 (SWOT analysis), the SABMiller acquisition strategy in particular the acquisition of Miller in 2002 along with issues rose in acquisition. It will also set out to recommend a strategic development plan for future. The strategic position of SABMiller in 2009 Understanding the strategic position is concerned with identifying the impact on strategy of the external environment, an organisation’s strategic capability (resource and competent) and the expectations and influence of stakeholders. (Johnson & schools & Whittington, 2008) The strategic position that SABMiller has chosen to follow is to continue to protect and further develop its operations, whilst investing for growth in its international beer business, several...
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...SABMilier Aidan McQuade South African Breweries grew on the basis of its strength in developing markets, first in Africa and then in other parts of the world. Following pressure from investors to acquire a brewery in a developed market it acquired Miller in 2002 to become SABMiller and the second largest brewer by volume in the world. This case study explains the business's development. It shows how the strategy has changed with time and circumstances and provides the opportunity to consider its future at both the corporate and competitive strategy levels. ••• Introduction In 2007 SABMiller, the renamed South African Breweries following its acquisition of the American brewer Miller in 2002, had become the second largest brewer by volume in the world. It still vied with Anheuser- Busch. its principal competitor; having dropped back to third place in 2005 it reclaimed the number two position following its conclusion of a US$7.8bn (~6.2bn) deal to take over Grupo Empresarial Bavaira, South America's second largest brewer. In the 2006 annual report SABMiller outlined four strategic priorities upon which its success depended: 'Creating a balanced and attractive global spread of businesses .... Developing strong relevant brand portfolios in the relevant market .... Constantly raising the performance of the local businesses . . . . Leveraging our global scale.' This statement of strategy may be seen as a synthesis of the learning the company has developed...
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...Erasmus RSM MFM: Mergers & Acquisitions ‘SABMiller Acquisition of Royal Grolsch NV’ Dou Wednesday, July 01, 2009 S. Mongeau Mergers & Acquisitions Analysis: SAB Miller Plc. Acquisition of Royal Grolsch NV Author: Scott Allen Mongeau Erasmus Rotterdam School of Business Candidate - 2009 Masters in Financial Management scott@biomatica.com Supervisor: Hans Haanappel, PhD Erasmus University Rotterdam, Department of Finance Assistant Professor - Faculty of Economics hans_haanappel@planet.nl I. MANAGEMENT SUMMARY SABMiller plc (www.sabmiller.com), publicly listed on the London Stock Exchange (LSE:SAB) and Johannesburg Stock Exchange (JSE:SAB), and available via the US OTC market (OTC:SBMRF), is a global brewing and bottling group. Founded in South Africa in 1895, SABMiller today is an international enterprise with a market value of £21 billion, producing a range of premium beers, including six numbering amongst the top 50 brands in the world: Pilsner Urquell, Peroni, Miller Genuine Draft, Miler Lite, Castle and Grolsch. The Grolsch brand, previously purveyed by 392-year-old Royal Grolsch NV, was the target of a notable acquisition in the brewery industry in November of 2007, with SABMiller paying a premium €816 million ($1.2bn; £583m), an 84% premium over Grolsch’s then share price. A premium price for a premium band, the acquisition of Grolsch added a northern European product to SABMiller’s portfolio and expanded its native and foreign market share. Riding a wave...
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...Q3. Derek Jones, Marketing Director of SABMiller India said, “With the changing lifestyle and rise in disposable income of consumers, more and more people are looking for innovative products in every segment including beers. We see a huge opportunity in India as it is no more a taboo to consume beer, consumption is on the rise and young consumers are open to experimentation today. We aim to bring the authentic Indian flavor and character to the world of beer. Seeing the vast opportunity, Saab Miller India launched a flavoured beer, named “Indus Pride”. It is the first to be brewed with spices to pair it with Indian gourmet cuisine. It is made from the finest hops complemented with authentic spices to form a burst of Indian flavor. Initially Indus Pride had four variants: Citrusy Coriander, Citrusy Cardamom, Spicy Fennel and Fiery Cinnamon. “Indus Pride captures a truly Indian taste profile and represents the Indian specialty beer segment. It taps into the sensorial experiences of the consumers and is a perfect pairing with Indian gourmet cuisine. We are confident of an encouraging response from the consumers,” Jones added. SABMiller India, the second largest brewer in the country and the Indian arm of the world’s second largest brewer SABMiller PLC entered the Indian market in the year 2000 by acquiring Narang breweries and has since acquired several breweries and brands. The most notable being its acquisition, in June 2001, of Mysore Breweries (with its Knock Out brand) and...
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...TFI MDX15 C 05 TFI MDX15 C 05 Enero, 2015 Enero, 2015 SAB MILLER MEXICO Un Gigante emprendedor SAB MILLER MEXICO Un Gigante emprendedor Expansión de SAB Miller en México ante un entorno de una Industria con un monopolio regional; ¿es para el grupo un mercado atractivo? Cuál debería de ser la Estrategia para los siguientes años? 1. Introducción En Enero del 2015 SAMiller México se encontraba prácticamente a un par de meses de cerrar su año fiscal F15*, con un record de ventas casi llegando al máximo de sus volúmenes históricos alcanzado en el 2008, se veía un futuro retador para el siguiente año y era un momento trascendental para la Compañía. A pesar de que en el 2013 la CFC (Comisión Federal de Competencia) había dado un fallo en contra de las prácticas monopólicas y prohibición de exclusividades, más de un año después la Industria Cervecera en México seguía en un entorno dominado por 2 grandes jugadores Anheuser-Busch InBev (Grupo Modelo) y Heineken (Cervecería Cuauhtemoc-Moctezuma) ante un Mercado cerrado dominado regionalmente por ambos productores y con un entorno de acceso limitado para nuevos competidores en la Industria; a pesar de que el crecimiento en marcas Premium así como en Importadas y Artesanales había sido muy por arriba del crecimiento promedio del mercado, la participación de este segmento no llegaba a más del 5% en volumen y cada vez existían más competidores jugando en esta categoría con una gran diversidad de marcas y presentaciones...
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...Acquisition of Peroni and distribution proposal South African Breweries (SABMiller), established in 1895, is one of the largest brewers in the world. It has over 200 brands of beer and operates in over 55 countries. Originally, the Company’s business operations were limited almost entirely in southern Africa where it established itself as a dominant position in the market. However, by 1990 SAB began investing in European markets.1 With growing recognition, SAB joined the London Stock Exchange in 1999 where it was able to raise money for acquisitions. Their first major acquisition was that of the Miller Brewing Company in North America in 2002. They bought Miller from the Altria Group for $3.4 Billion and changed their name from SAB to SABMiller.2 In 2003, SABMiller decided to further their expansion by acquiring the Italian brewer Birra Peroni. SABMiller bought 60% of the Italian brewer, which cost $280 million. At the time of the transaction, Graham Mackey, SABMiller’s CEO, explained to the press that they decided to buy Peroni because, “Italy is the only Western European country besides Spain where beer consumption is increasing” 3. He said SABMiller expected sales of Peroni, which had 25.2% of the Italian beer market, to increase. However, many analysts believed the price paid for Peroni was too high, which was 12.6 times Peroni’s operating cash flow. The deal also put SABMiller into another competitive market with their rival, Anheuser-Busch. This deal was the company’s...
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...Grolsch Analysis In November of 2007, SAB Miller purchased Royal Grolsch N.V. to develop their premium beer product line. Grolsch has two main brand families: Grolsch premium Lager and Amsterdam. The takeover gives SAB Miller the ability to attack the premium beer market with an established and standardized brand that has grown globally (21st largest global brand in 2007) with a differentiated taste and packaging strategy. In this analysis, I will evaluate the reasons for Grolsch’s global expansion, their ability to adapt their pricing, distribution, advertising, and distribution to global demand and their strategy to evaluate the potential of entering new markets with MABA (Market Attractiveness, Business Assessment framework). I will also suggest a strategy moving forward under SAB Miller’s command. Reasons for Global Expansion One reason Grolsch went global was to reduce the company's reliance on local and national markets. In the 1960s-70s, the domestic market in the Netherlands began to shrink as Heineken and Amstel merged and took ownership of 50% of the Dutch market and 70% of exports. In addition, according to Exhibit 13, total consumption in the Netherlands decreased from 2000 (13.23 Million Hls) to 2005 (12.75 million Hls). In 2007, Grolsch’s home market of the Netherlands accounted for only half of its total volume and 65% of its revenue. Grolsch only owned 13% of the volume in the Netherlands alongside Bavaria (17%), Heineken/Amstel (46%), and Interbrew (14%)...
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...TO: South African Breweries Ltd. Board Members FROM: BiMPSY Business Solutions DATE: August 21, 2011 RE: Assessment of Norman Adami’s Leadership at Miller Brewing _____________________________________________________________________________ Dear Board Members, The BiMPSY Business Solution group, the board of directors for Miller Brewing Company, has recently seen a major cultural change under the leadership of Norman Adami. The following report is an assessment of his leadership at Miller and how that change has affected our company. Adami’s aggressive tactics have rattled our main competitor Anhesuer-Busch (AB). By 2005, AB’s operating income had decreased by 22% with a corresponding loss of 1.8% in sales volume. Miller was also able to gain $10 billion to $12 billion market capitalization from AB.4 Adami has instilled the belief in his employees that the United States’ second largest brewer, Miller Brewing Company, can capture enough market share from its main competitor, Anhesuer-Busch, and possibly overtake it as the number one brewer in North America. We look forward to your questions and comments at the upcoming global board meeting. Best Regards, BiMPSY gives permission for this assignment to be viewed by other students in the MBA cohort. Norman Adami not only changed the climate at Miller Brewing, but in 2003 when he became the President and CEO, he did something even more radical – he “fundamentally changed the direction of the company”5 by changing its...
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...There are more than 2000 brewers in the world, but three of them control 78% of the beer market. Anheuser-Busch controls approximately 45%, Miller Brewing maintains a 23% share, and Adolph Coors controls 10%. Anheuser-Busch's twelve breweries produce more than sixty varieties of beers in a number of families with operations around the world and distribution to over 60 countries. A few of these families are Budweiser, Michelob, Busch, Natural, Bacardi, and Grolsch. Miller Brewing produces more than 130 million barrels of beer annually and has operations in 40 countries with hundreds of brands. In July 2002, South African Breweries purchased Miller Brewing Company, forming one of the largest brewers in the world, called SABMiller plc. Brands range from Miller, Milwaukee's Best, Leinenkugel's, Peroni, Sparks, and Fosters. Adolph Coors produced 42.1 million barrels in 2006 through 12 breweries and more than 40 brands distributed to over 30 countries. Brand names include Coors Light, Milson Canadian, Coors, Killian's Irish Red, Keystone, Blue Moon, and Zima. Beer is distributed through a system called the "three-tier" distribution system. The three-tier system was established by the 21st Amendment to the Constitution and state and federal governments in the wake of the repeal of Prohibition as a means of checks and balances at each tier level. The first tier consists of brewers and importers, followed by wholesalers, and lastly with the retailers. The brewers and importers manufacture...
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...Miller Brewing Co. In 2003, the Miller Brewing Company was in trouble. At the root of the company’s issues was a stagnant organizational culture. Organizational Culture is defined as “the set of shared, taken-for-granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments (Kreitner 62)”. Miller was not a priority to its former owner Philip Morris, and a number of marketing failures made matters worse. In 1994, the company accounted for 23% of the industry share and by the time Mr. Adami arrived, the share was down to 17% (Carter). The company was in decline and the focus was to manage the decline. Norman Adami was hired and immediately changed the culture of the company, bringing about a new sense of urgency as well as a more aggressive campaign mentality. Along with his style of leadership, Mr. Adami was persistent in recruiting experienced executives to surround him with an elite team. In result, the company has a higher level of morale and sales growth since 2004. Norman Adami recognized that the complacent nature of Miller was in a state of terminal decline and identified the need for a cultural overhaul. He led the cultural change with an incentive-based approach, removing the apathetic leaders and replacing them with self-motivated and competent leaders. Mr. Adami’s aggressive and innovative character encouraged his employees to achieve higher results, which improved the marketing...
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...'Seinfeld In The Workplace' By, Manpreet Chadha 1. What are the ethical dilemmas involved in this case? According to me, the ethical dilemmas are whether it is sexual harassment when employees are sitting around talking and making jokes ? Till what extent are these jokes or comfort level allowed? Can discussing a racy Seinfeld episode be grounds for firing ? When exactly does a sexual reference or discussion encounter rise to the level of a hostile work environment? That hinges on whether a reasonable person would find the conversation offensive [and pervasive]. Talking About Sex; 'Where do you draw the line in the office?', the ethical dilemma is between the tension between a popular culture that encourages talk about sex and a workplace mentality that seeks to restrict it. 2. Do you think Mackenzie’s conduct was sexual harassment? What about the previous allegations of harassment? Should Miller have taken action then to prevent the so-called “Seinfeld episode”? Sexual harassment indeed is a a serious issue, in my opinion there is still no widely agreed upon definition of the concept. In this case I am confused if it was sexual harassment, as Mackenzie's intentions haven't been mentioned explicitly in the case. Nevertheless, he should have been more wary at choosing carefully who he shares his remarks, jokes, with and should have avoided sexually explicit discussions, comments...
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...The popularity and interest in teamwork has been rapidly increasing as a key element of many organisations since the 1980s, and is believed to make work more productive, creative and satisfying today more than ever (Procter and Mueller, 2000). Teamwork is vital for sharing information and can benefit organisations and individuals significantly (King and Lawley, 2013). This essay will discuss three benefits of teamwork to an organisation and two benefits of teamwork to an individual, along with some examples. One of the main benefits of teamwork in an organisation is better quality outcomes. This involves better quality decision making and problem solving (King and Lawley, 2013). For example, when organisations aim to achieve certain goals, teams are allocated to carry out specific projects. Through coordination, members can divide the workload into different roles and tasks to address the problem. Each member then brings different information and ideas to the team, which through collaboration, inspires new ideas resulting in different approaches and accurate solutions to the problem at hand (King and Lawley, 2013). Supporting this is a case study on the Miller Brewing Company, which states that the company’s success as one of the most profitable breweries is due to its teamwork. A section of the study states “clearly defined responsibilities for each individual and the optimal coordination of all work processes within a team” (TA Cook Consultants, no date, p2). Another benefit...
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...CASE STUDY ANALYSIS March 21st 2014 CASE STUDY SABMiller CASE STUDY ANALYSIS CASE STUDY – SABMiller SABMiller SABMiller is a multinational brewing and beverage company, older than the state of South Africa, where it originated. It is the world's second-largest brewer (after AB InBev). Brands: Fosters, Grolsch, Miller Brewing Company, Peroni Nastro Azzurro, Pilsner Urquell… Global Presence: It has operations in 75 countries across Africa, Asia, Australia, Europe, North America and South America. SABMiller now faces an important decision. Where to go from here? CASE STUDY ANALYSIS CASE STUDY – SABMiller Porter’s 5 Forces – Beer Industry Substitutes Very high - there are a lot of options in the market for alcoholic beverages such as: -Cider -Wine Supplier Power Low -“The Group was already large enough to use purchasing power to force down ingredient prices” - They own most of the supply chain (they buy breweries) Rivalry among competitors Intensive - Industry that keeps consolidating - ABInbev -Heineken Customers bargaining power Low Customers don’t interfere with the price-making Threat of Potential new entrants Medium to Low - Anyone can start a brewery but it is difficult to become main player - Cost advantage - Lot of capital needed - Reputation CASE STUDY ANALYSIS CASE STUDY – SABMiller SWOT Strengths Background/ History Heritage Global presence Firm's Reputation & Stability Capacity to overcome struggle Industry Knowledge Cost...
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...MGMT 205 International Business 2015/2016 Term 1 Cover Page - Case Discussion Note Name: Duarte Maria Loureiro José de Mello NRIC: G150899X Group (i.e. G1 or G2): G1 Case: Israeli Wines in China: Reaching for New Heights | Below Standard | Meets Standard | Exceeds Standard | Point Range | 0-4 | 5-7 | 8-10 | Relevance | Does not identify the relevant facts from the case or incorrectly identifies facts | Correctly identifies relevant facts from the case | Correctly identifies most key important facts from the case. Able to explain why some facts are more important than others | | | | | Theoretical framework | Identifies the wrong theories or framework or just randomly look at the case | Identifies the right theoretical tools to address the question | Identifies the right theoretical tools and explains the significance towards analysis of the case | | | | | Application of theories | Applies theories incorrectly | Applies the theory correctly and attempts to link to some facts presented in the case | Applies the theory correctly and provides a full, logical and concise explanation of how it links to facts presented in the case | | | | | Quality of discussion | Provides only conclusions and outcomes, without specifying arguments | Provides a complete and reasonably balanced response with some arguments in addition to conclusions and outcomes | Provides a comprehensive and balanced response, with full, logical & concise arguments in...
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...Question 1 3 PEST analysis 3 Porter’s 5 forces 5 Question 2 6 Michael Porter's Generic Competitive Strategies 6 Threshold Resources 7 Core Resources 7 Question 3 8 Ansoff Matrix 8 Market penetration 9 Product development and Market development 9 Organic development 10 Question 4 10 Johnson and Scholes framework of Suitability, Feasibility and Acceptability 11 SABMiller’s strategic priorities: 11 Constraint of acquisitions 13 Reference 14 Question 1 Using information exclusively from the European Brewing Industry and SABMiller cases as supplied and appropriate models from the course analyse the external environment in which SABMiller operated in 2010. After conducted a series of cross broader mergers and acquisitions SABMiller successfully become the second largest brewer by volume in the world. SABMiller is now operating worldwide: Latin America, Europe, North America, Africa, Asia, and South Africa. Nevertheless, the environmental condition and potential of growth vary between each region (Blee and Whittington, 2010). European brewing industry was one of the world’s major beer consumption regions. Recent years, the market has come into mature stage of the industry life cycle and demand is now decreasing (Euromonitor, 2010). PEST analysis and Porter five forces model are the appropriate methods to evaluate external environment on European Brewing Industry (Johnson, 2002). PEST analysis ...
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