SAB MILLER

SAB Miller

SAB Miller

Question 1: Critically evaluate the current strategic priorities (as at the end of the case study 2006 and 2009) of SAB Miller and consider the role of the corporate parent in value creation.

Ans. Referring to the strategic priorities of SAB Miller On an organic basis SAB Miller have consolidated company position as the largest brewer by volume. However, profitability remains low with price increases offset by higher distribution costs, and by investments in marketing and in new breweries. The businesses in Africa continues to grow and we see plenty of opportunity to further strengthen our brand portfolios, in-trade investments and execution, and improve efficiency in the relatively undeveloped African markets. Business strategy of SAB Miller (also known as competitive strategy) is concerned with how SAB should compete within a particular market. The distinction may be summarized as follows: corporate strategy is concerned with where a firm competes; business strategy is concerned with how a firm competes.

The key underlying concepts for analyzing these different dimensions - economies of scope in resources and capabilities, transaction costs, and costs of corporate complexity - are common to all three. Although the capitalist economy is frequently referred to as a “market economy,” in fact, it comprises two forms of economic organization. One is the market mechanism, where individuals and firms make independent decisions that are guided and coordinated by market prices. The other is the administrative mechanism of firms, where decisions over production, supply, and the purchases of inputs are made by managers and imposed through hierarchies.

Approaches to Deal

Strategies towards vertical integration have been subject to shifting fashions. For most of the 20th century, the prevailing wisdom was that vertical integration was generally beneficial because it allowed superior coordination and security. During the past 20 years there has been a profound change of opinion and the emphasis has shifted to the benefits of outsourcing in terms of flexibility and the ability to develop specialized capabilities in particular activities.

Consistent Behavior

Moreover, it has been noted that most of the coordination benefits associated with vertical integration can be achieved through interfirm collaboration. However, as in other areas of management, fashion is fickle. In the media sector, vertical integration between content and distribution has become viewed as a critic SAB Miller chose strategy to create wealth and higher employment, also result in increased consumer expenditure. Company was greatly helped by the quality of people and strong culture of performance management. Employees at every level are empowered and accountable, with clearly-defined goals.

In stretching our people, company also support them with world class training and development.

Communication activities

The other strategy selection of company in South Africa that increase market share in the total South Africa liquor market by making beer the alcoholic drink of the first choice for more people primarily through better channel segmentation distribution and promotions. Looking forward, the recent economic momentum in South Africa is expected to continue and will drive strong consumer spending and provide a solid platform for the ...