Strategic Position For The Future Of Sabmiller Commerce Essay

Strategic Position For The Future Of Sabmiller Commerce EssayIn the brewery industry, SABMiller, which has been operating across six continents, is now one of the worlds leading brewers. Regarding of the business environment, the company has go forthed from a ontogeny pastoral, South Africa, and has successfully entered into both developed and developing markets through acquisitions and marijuana cig atomic number 18tte enter. According to the financial report for the last five years, the company has been doing quite well (SABMiller, 2012).For the strategic capabilities, the solids resources and competences are taken into account. Firstly, in 1950, the firm was able to move its headquarters from London to Johannesburg in order to expand its business in Southern Africa due to the restriction of trading between the country and the international businesses. Secondly, the firm is able to raise capital through its listing on the London stock exchange. Thirdly, the firm has entered i nto the global market by acquiring some major brands such as Dreher from Hungary, Miller from USA and forming a joint venture in China. Then, the company also has made other acquisitions, joint ventures and brewery investments in other countries in recent years. However, acquisition may not be applied for SABMiller any more than in the future because of fewer larger transformational deals and begin prospects of high financial of returns. About the management structure of the firm, it practices decentralization as topical anaesthetic managers understand deeper about the local businesses (Johnson, Whittington and Scholes, 2011).3.2 The new vision logical argument, mission statement and the strategic objectivesVisionThe best in the world in providing the most various choices for beer drinkersMissionIncrease fruit portfoliosFind more business partners translate the most comfortable working environmentStrategic objectivesIncrease profit to 15 % annuallyIncrease the sale of amplitude beersForming more joint ventures with local brandsUpgrade the latest technology in administration and manufacturing.As age goes by, SABMiller has been growing larger enormously through acquisitions and joint ventures, and it has almost earned more profit from these business deals. Therefore, a new vision statement for the firm is to be the best in the world in providing the most various choices for beer drinkers.In order to support the vision, SABMillers mission is to increase more product portfolios for the consumers. The firm will find more business partners to grow bigger and bigger in the brewery industry. The firm will provide the most comfortable working environment that employees will be most satisfied and efficient by providing the most advanced- technical conditions.Those missions must be carried out in specific strategic objectives. First of all, the firms aim is to increase its profit by 15 % annually. Secondly, It needs to increase more types of beer, especially inter national premium beers to meet the rising demand in emerging markets. Thirdly, it also needs to find out more opportunities for growth with its brisk product portfolios through joint ventures in local brands. Finally, the firm needs to upgrade the latest technology in administration as well as manufacturing, so the employees will feel more convenient and put more effort in their work.3.3 Three alternative possible strategic preferences for SABMillerThe first strategic pickaxe recommended for the firm would be the product emergence, which deliver new products into the existing markets. In terms of Generic strategies, this strategy should commission on differentiation by building more premium types of beer. The reason is that the beer consumption is growing in these emerging markets, and the people here are earning more (Simon, 2012) therefore, they are willing to pass more for their drink as well. Another reason is that consumers nowadays still prefer high quality beer during t he economic crisis (Nadine and Simon, 2012). Although this strategy will fall into caput marks in the Bostons BCG matrix as these premium beers are totally new products, they are more likely to turn into stars as the market dole out is growing, and the consumers will pay more as well. Product development is also a strategy belongs to the Ansoff matrix, so SABMiller needs to add more new premium beers to its brand portfolios in the existing markets such as in China, Latin the States and South Africa, which are also emerging markets.The second strategic option would be the market development, which the firm will penetrate into new markets with the existing products. Even though the target markets here are Africa and Asia, which SABMiller has already entered, it jakes rattling bring more brands from North America, Latin America and Europe to these countries due to the lack of its brand portfolios in these two regions. This is also a cost-focus strategy, based on the Generic strateg ies, for the firm as the costs of labor and raw materials in African and Asian countries such as China and Vietnam are cheaper, so it is an emolument for the company to cut costs in manufacturing. In terms of the BCG matrix, this option also fall into a question mark as local brands from Europe, for instance, are new in Africa and Asia. However, there will be a high chance to become a star within a short time as consumption is rising up in these regions. Market development is another strategy belongs to the Ansoff matrix as the firms current products portfolios from North America, Latin America and Europe are totally new for consumers in African and Asian countries.The last option, which SABMiller is capable of doing and actually has succeeded before, is joint venture. Based on the case, the firm can consider entering into a joint venture with Dos Equis Brewer Fomento Economico Mexicano (FEMSA) from Mexico, or EFES Breweries International from Turkey. According to Generic strategy, this can be known as a cost-focus strategy for SABMiller because these two brands are currently doing alright in rising markets like Latin America, Africa and Asia therefore, SABMiller is able to have a good start as it is also operating businesses prosperously in these markets. In the BCG matrix, both SABMiller and these two brands are having high market share and growth in those emergent markets with their current product portfolios therefore, if joint venture takes place, there will be no doubt that SABMillers market share and growth will boost up continuously. In terms of Ansoff matrix, this strategic option actually help SABMiller increase its market share in its current markets, Latin America, Africa and Asia with the current and combined product portfolios of both the firm itself and it partners (Johnson, Whittington and Scholes, 2011).Lower costDifferentiationBroad targetCost leadershipDifferentiationNarrow target32Cost focus1Differentiation focusCompetitive advantageCompe titive scopeTable 1 Porters Generic strategiesMarket shareHighLowHigh3Stars21Question marks bullion cowsDogsMarket growthLowTable 2 BCG matrixProducts / servicesExistingNewExisting3Market penetration1New products servicesNew2Market developmentConglomerate diversificationMarketsTable 3 Ansoff matrixStrategic options1 Product development2 Market development3 Joint venture3.4 The most recommended strategic options for SABMillerOut of the above three strategic options, join venture would be a great move recommended for SABMiller. In fact, the firm has succeeded in forming joint ventures with others firm, so it clearly shows that the company is capable of doing such kind of thing. Furthermore, the two considerable firms for forming joint ventures, FEMSA and EFES, are doing quite well in Latin America, Africa and Asia, where SABMiller is also having a good taste with its business, so it will be an advantage for SABMiller as it can achieve more growth, reduce competitors in these markets. In addition, forming joint ventures also helps SABMiller to expand its product portfolios into other current markets. To sum up, forming a joint venture can be seen as a safer option as the current product portfolios are star products with high market share, while the other two option might be a teeny-weeny bit riskier as the products and the markets are new and unpredictable to measure successes.