Analysis of Sabmiller

ANALYSIS OF SABMiller’s DIVERSIFICATION AND COMPETITIVE STRATEGIES
INTRODUCTION
SABMiller PLC is a global giant in the brewery industry and has a track record of innovation and growth. Being one of the world’s biggest brands, SABMiller has adopted a unique style to ensure competitive advantage and remain at the forefront of the brewing world.
Key to its developing and maintenance of relevance are its values and strategic priorities
Values include:
Recognition of people being an enduring advantage
Emphasis on accountability
Teamwork
Respect for consumers and customers
Indivisibility of reputation
Strategic priorities include:
• Creating a balanced and attractive global spread of businesses
• Developing strong, relevant brand portfolios that win in the local market
• Constantly raising the profitability of local businesses, sustainably
• Leveraging skills and global scale
Dynamic leadership and overall culture has been a driving force towards success in overall terms.
DIVERSIFICATION STRATEGIES
According to Ansoff’s model, a Strategic Business Unit or Product can be promoted by one of four main categories, based on market share and the product itself. These include;
MARKET PENETRATION
MARKET DEVELOPMENT
PRODUCT DEVELOPMENT
DIVERSIFICATION
Diversification can further be broken down into two categories,
CONCENTRIC DIVERSIFICATION: this involves diversifying into related industries such as suppliers, customers. This is known as VERTICAL INTEGRATION. It can also involve acquisition of or mergers with competitors with the same industry. This is known as HORIZONTAL INTEGRATION.
CONGLOMERATE DIVERSIFICATION: This is diversification into non-related industries, i.e. in this case, non brewing industries.
In looking at SABMiller, we are specifically interested in diversification into related industries and hence focus will be on CONCENTRIC DIVERSIFICATION.
In discussing related diversification, a model which will be of relevance would be the product lifecycle model, which