Environmental Forces Affecting Anheuser-Busch
ENVIRONMENTAL ANALYSIS
Introduction
This paper will address trends and forces that are affecting Anheuser-Busch and will more than likely continuously affect the company. This paper will also assess the company’s market and address the organization’s strengths, weaknesses, opportunities, and potential threats. Finally, the paper will present three long-term objectives then restate the mission and vision statement.
Refine the analysis of the forces and trends Strategic adaptability is crucial for any company trying to survive in today’s economy. Companies must examine the market looking for opportunities to grow and improve the business in a changing environment. Webster’s dictionary defines adapting as adjusting …show more content…
or becoming adjusted to a specific use or situation (Webster’s, 1996). “The most prominent factor in the remote environment is often the reciprocal relationship between business and the ecology†(Pearce & Robinson, 2004). Numerous businesses today are “going green†due to concern about the environment; however, while other companies are “going green,†Anheuser-Busch has been practicing this philosophy since the 1800’s when one of A-B’s founders, Adolphus Busch, began recycling leftover grain for cattle feed. A-B has adapted in several ways from recycling more than 27 billion cans annually, becoming a national leader in wildlife rescue and habitat conservation, to striving to conserve water and energy through the Bio-Energy Recovery Systems (BERS) technology, which is a process that reclaims nutrient-rich leftover water to create renewable energy that provides fuel for the breweries (Anheuser-Busch, 2008). To continue the efforts of environmental stewardship and adapting in today’s efforts of “going green,†A-B implemented an Electronics Recycling Initiative at the Sea World in San Diego that has recycled over 240,000 pounds of recyclable electronics that not only aided in protecting the environment but also helped support the restoration and protection of native habitats for migratory species (Anheuser-Busch, 2008). “Many of the world’s largest corporations are realizing that business activities must no longer ignore environmental concerns†(Pearce & Robinson, 2004).
Macroeconomic Forecast During the fluctuation of the economy, the demand for beer has yet to waver. Today the economy is in the worst condition ever yet the future forecast for Anheuser-Busch (A-B) in the beer industry looks remarkable. Consumer spending varies based on disposable income. When the disposable income decreases, consumers do not spend as much on nonessential items and when disposable income increases, consumers are more apt to spend more. Regardless of how much disposable income consumers have, consumers tend to find the necessary resources to use to purchase beer. Consumer spending is not the only variable with future forecasting; demographics are vital to the equation. Young adults are considered to be the largest consumers of alcoholic beverages. A-B should take advantage of the increased population overseas by focusing on global demographics to increase continuous growth. The consumption of alcoholic beverages and energy drinks is steadily growing creating potential for growth for A-B.
Social and Cultural “Environment presents firms with opportunities, threats, and constraints, but rarely does a single firm exert any meaningful reciprocal influence†(Pearce & Robinson, 2004). A-B believes in giving back to the community and has numerous benefits and outreach programs proving the company’s social and culture efforts. For more than a century, A-B has extended a helping hand to the needy by donating to community organizations worldwide and touching innumerable individual lives. Over the past 10 years, A-B has contributed in excess of “$370 million to charitable organizations, including those that support education, health care, the arts, cultural enrichment, social services and environmental conservation†(Anheuser-Busch, 2008). One of the biggest initiatives this year that A-B has introduced is a “Street Smart†program that focuses on underage drinking, driving under the influence, using illegal drugs, or driving without the use of a seatbelt. A-B has partnered with I-95 Corridor Coalition and the Florida Department of Transportation to encourage students who resides in states along I-95 to be “Street Smart.†This program will allow students attending high school in states from Florida to Maine along I-95 to experience real-life drama by fire fighters and paramedics as they work to save lives of students who made poor decisions of underage drinking, driving under the influence, using illegal drugs, or driving without the use of a seatbelt (Anheuser-Busch, 2008). Although this program is focused mainly on students residing in states along I-95, A-B also promotes responsible drinking overall which focuses on preventing underage drinking and drunk driving across the country.
Political
“The direction and stability of political factors are a major consideration for managers on formulating company strategy. Political factors define the legal and regulatory parameters within which firms must operate†(Pearce & Robinson, 2004). Some political factors have constraints that may diminish the possible earnings of the company while some political factors are intended to benefit and protect the company. The constraints can consist of fair trade decisions, antitrust laws, pricing policies, and minimum wage legislation all which are geared at protecting stakeholders (Pearce & Robinson, 2004). The federal government uses the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to pressure the beer industry through the numerous ATF Rulings for alcohol. Some of the rulings are Labeling and Advertising of Malt Beverages, Importation of Alcoholic Beverages, Labels on Imported Alcoholic Beverages, Imported Bulk Beer, “Ice Beer,†Direct Shipment Sales of Alcohol Beverages to name a few. Anheuser-Busch uses political factors to assist the company in preventing insider trading. Insider trading can affect the market value of the company’s securities or the possibility of a potential investor to purchase, sell, or retain the company securities. For example, insider trading information that could be considered detrimental is knowledge of a company’s change in expectant earnings, change in pricing plans, possibly acquisitions and mergers, disputes between suppliers and customers to name a few (Anheuser-Busch, 2008). For example, when InBev purchased A-B, if employees had prior information of a change in pricing plans, dividend rates or a change in expected corporate earnings, this would have been considered insider training and would have affected the sale between InBev and A-B. Occasionally Anheuser-Busch employees are privileged to proprietary and confidential information regarding acquisitions and mergers along with financial information that is crucial to the company. Since some employees are aware of this critical information, any attempt to benefit from the use of this information is illegal if the documents have not been relinquished to the public. When an individual purchases or sells Anheuser-Busch securities with the knowledge of inside information that has not been disclosed to the public, this is considered insider trading. Rule 10b-5 of the Securities and Exchange Act of 1934 prohibits trading in company stock before the information is made public (Anheuser-Busch, 2008). Therefore, A-B implemented Insider Trading of Securities Policy to prevent employees from using the information for self purposes or sharing the information with others. By implementing this policy, A-B employees are aware of the consequences and legalities for the misuse of the material information. Among the political and legal factors associated with A-B, are the Political Action Committees (PAC’s) that although not affiliated with the government, are influential in having the government pass legislation. Stricter liquor and beer laws, an increase in the current drinking age, and an increase in penalties for drinking and driving are a major focus for groups such as: Students Against Drunk Driving (SADD), Mothers Against Drunk Driving (MADD), and various other state alliances who are against the use of underage drinking.
Technological
In order “to avoid obsolescence and promote innovation, a firm must be aware of the technological changes that might influence its industry†(Pearce & Robinson, 2004). This is imperative that companies identify existing technological advances and recognize possible future advances that may influence the company’s products and services especially with technology evolving regularly in today’s society. A-B uses technology to maintain accurate inventory of all the products. Maintaining accurate inventory allows A-B to ensure availability of products to the retailers for purchase. Technology changes frequently, therefore, A-B must adapt to the ever-changing forces and trends of technology. “Creative technological adaptations can suggest possibilities for new products, for improvements in existing products, or in manufacturing and marketing techniques†(Pearce & Robinson, 2008). Implementing the A-B mobility program, which is a software program that allows an employee to input and transmit customer inventory and orders to the company’s warehouse, ensures better accuracy of inventory and orders for next day delivery. Once the data is loaded and transmitted to the warehouse, warehouse personnel receive this information and can begin preloading the necessary product for delivery to the retailer. By introducing a training strategy, the company will ensure that the employees are equipped with all the necessary information to be proficient at using the program. Using this A-B mobility program allows employees to perform a more efficient and productive job, which overall pleases the customer. The A-B mobility program also allows sales employees to view past inventory history, the total cost of new inventory to be delivered, and any current promotions. Having this information at the salesperson’s fingertips provides excellent customer service. Innovative technological adaptations can lead to potential for new products, for enhancements in current products, or in developing and advertising methods. Anheuser-Busch continues to conduct technological forecasting in order to protect and improve the profitability of the company in the beer industry. Anheuser-Busch understands that in order to continue to be the number one beer company, the company has to predict precisely the future technological capabilities and the impact that the capabilities will have on the future growth of the company then implement the strategy.
Demographic
The consumption of beer is primarily determined by consumer demographics. In order for A-B to remain a superior beer company, A-B must provide the product to various demographics. For example, A-B must focus specific marketing towards young adults, diverse cultures and ethnicity, different genders, and social, economic, and lifestyle differences. Since such an extensive group of consumers exists, A-B should shy away from a standard approach of marketing due to the difficulty of reaching all intended targets. In order to target properly the various clienteles, A-B should survey the different groups to determine the likes and dislikes so that current and potential consumers are satisfied.
Competitive Analysis A-B is currently doing well in the beer industry. Known as the “King of Beers,†A-B continues to display why the company remains the top leader in the beer industry. Through continuous innovation and technology, introduction of new products, the focus on brand image and aggressive and assertive marketing, A-B has been able to sustain many downfalls in the ever changing market. Due to competitive pricing, customer service and new products, A-B has been able to maintain sales and gain tremendous strides ahead of the competition, SABMiller Brewing. Unlike retail where pricing is determined by the name on the label or the name on the department store, the frontline beer pricing is the same for all retailers across the board whether the company is a large store such as Sam’s or Wal-Mart or a small independent neighborhood store. A few exceptions exist when frontline pricing on certain products is lower or higher than competition. Those exceptions include: monthly promotions where A-B will have bottles on sale and Miller Brewing will have cans on sale or vice versa or the distribution of special packages released to the market for different occasions. Another exception is during yearly price increases when competition will not raise the price on a certain package during increase period. A-B then decides whether to match that price or combat the price with another package that will be more profitable for the company to reduce. However, due to A-B’s survival instinct, the company has been able to sustain these reductions to match competition because the company has been able to be productive in maximizing the dollars in other areas such as imports through InBev, energy brands such as Monster and Losts and now water to add to the portfolio. In addition, once the retailer receives frontline pricing, the pricing to the consumer is based on each individual retailer and not by the beer industry. Both companies seek to have competitive pricing among similar product, but although the product is similar, A-B’s brands stand alone and are produced with the best ingredients to provide a quality taste in a quality product. Once again A-B displays why the company is position as the leader in the beer industry and why the company continues to set itself apart from all the rest.
Assessment of Market Currently A-B is in good standing in the beer industry and with the recent merger with InBev, an import company operating out of Belgium, places A-B in a league of its own. This business merger makes A-B the number one beer company in the global market and is an example of A-B continuing to meet the company’s mission goals. The organization’s mission statement is “to be the number one beer company nationally by enriching and entertaining an increasing global audience while delivering superior returns to the shareholders†(Anheuser-Busch, 2008). The market structure for the beer industry falls into an oligopoly market structure. Oligopoly consists of a few firms being present in the industry, each having a major element of the market. These firms produce a homogeneous or differentiated product that dominates the market. “Firms thus situated engage in strategic behavior and are mutually interdependent†(McConnell, C. & Brue, S., 2004). The behavior of A-B directly influences, and is influenced by, the actions of A-B’s competition SABMiller. A-B and SABMiller must consider the reactions of each company in terms of pricing, advertising, and product development decisions (McConnell, C. & Brue, S., 2004). A-B has substantially increased its market share making Budweiser and Bud Light, the nations two top brands, account for practically half the beer sold in the U.S. The downfall of regional competitors is partially accredited to A-B’s success but is also attributed to A-B’s strategic ability. A-B continues to build state-of-the-art breweries, produce effective advertising campaigns, and form compelling relationships with regional distributors. Although SABMiller continues to create competition, several opportunities and issues exist that will be addressed through the strategic planning process. Opportunities that exist range from new products and market expansion to unrivaled distribution channels to issues ranging from high gas prices to increases in federal excise taxes.
SWOT Analysis Anheuser-Busch, the “King of Beers†and the leader in the beer industry, possesses a wealth of strengths. A-B is dominating sales and brand image, is financially sound, and creates a positive work environment. A-B’s sales are steadily increasing due to the company’s innovative marketing strategies that build up brand image which improves consumer knowledge and approval of the products and services. A-B’s investments are not limited to the beer industry; the company also owns amusement parks. A-B’s financial stability is evident by the extremely low debt and by immense leveraging capabilities. To remain the leading company in the beer industry, A-B must maintain the current positive work environment by continuing to hire and retain a robust management team with substantial experience. By maintaining such a management team with a positive work environment, A-B will remain an excellent company fostering positive management and employee relations. Along with strengths comes weaknesses and in order for any organization to improve stature in its industry, the organization must recognize the weaknesses then resolve them. A-B must examine the company’s weaknesses of competitive price strategy and market overflow of brands then address and resolve them. A-B’s bottom-line is severely affected when the company is forced to respond to discounted competitive pricing strategies. When competition reduces pricing, A-B volume is affected because the company is forced to discount its prices to match competition. Due to the constant changing of market trends, A-B has continued to reach all demographic regions and diverse group of drinkers by attempting to satisfy the vast range of drinkers needs. As other products enter the market, this creates competition for current placements causing market shares to fluctuate due to the large amount of availability of products to select from. A-B has significant opportunities for growth in the beer industry. Since InBev acquired A-B, the strategy is “expand Budweiser into Europe, Asia and Latin America†(Herald Tribune, 2008). Introducing Budweiser globally is key, however, “Anheuser-Busch InBev unrivaled distribution channels in the world's five largest beer markets: China, the United States, Russia, Brazil and Germany†is an opportunity that will lead to maximum growth for A-B (Herald Tribune, 2008). As A-B continues to move forward and expand the company’s portfolio, new opportunities are presented. A-B has currently branched out into the nonalcoholic market. The joint venture with Hansen Natural, which is a major producer of the energy drink Monster which has shown significant profit and growth, has once again proven why A-B is currently the leader in the beer industry. A-B is highly regarded as superior competition within the beer industry yet the company is not excluded from external threats. With today’s economy in the current poor state, high gas prices are a threat that dictates how often deliveries are made to customers. As gas prices began to increase, select customers who received twice a week deliveries were reduced to once a week deliveries, delivery routes where changed, delivery drivers went from a five day work week to a four day work week in an attempt to save gas. Another threat affecting A-B is the abrupt increases in federal excise taxes on alcoholic beverages which A-B assumes the responsibility of paying and does not pass on those additional charges to the customer.
Long-term Objectives “To achieve long-term prosperity, strategic planners commonly establish long-term objectives in seven areas: profitability, productivity, competitive position, employee development, employee relations, technological leadership, and public responsibility†(Pearce & Robinson, 2004). A-B should attempt to penetrate a diverse market while maintaining the loyalty of the current market. Secondly, the company should always search for methods to improve the products and service to maintain longevity in the industry. Lastly, another approach to maintaining longevity is to remain competitive by funding marketing programs that will attract customers globally.
Mission and Vision Statement
Anheuser-Busch’s mission is to be the number one beer company nationally by enriching and entertaining an increasing global audience while delivering superior returns to the shareholders. A-B’s vision is through all our products, services, and relationships, we will add to life’s enjoyment and the company’s values are quality in everything we do; exceeding customer expectations; trust, respect and integrity in all of our relationships; continuous improvement, innovation and embracing change; teamwork and open, honest communication; each employee’s responsibility for contributing to the company’s success; creating a safe, productive and rewarding work environment; building a high-performance, diverse workforce; promoting the responsible consumption of our products; and preserving and protecting the environment and supporting communities where we do business (Anheuser-Busch, 2008). In order for organizations to maintain longevity within an industry, the company must implement new strategies. Even though A-B reigns in the beer industry, the company continues to look for new areas to further enhance the business such as diversity; therefore, A-B created a Diversity Employee Resource Group (ERG) to improve the overall work environment and provide a better understanding of what the customer prefers in order to satisfy the customer’s needs. The ERG’s vision is to be recognized as a LEADER in diversity by our employees and external stakeholders†and the mission statement is to “drive business results through our commitment to diversity and foster a culture of inclusion demonstrated by: who we hire, retain, and develop; who we create our products for; and who we support through charitable contributions, business purchases and alliances (Anheuser-Busch, 2008).
Conclusion
In order to grow substantially as a company, a thorough environmental analysis needs to be completed. An environmental analysis was conducted for Anheuser-Busch in order to provide the company with a better understanding of the relationship between macroeconomics factors and organizational variables. As a result of the analysis, A-B needs to understand that in order to maintain a competitive advantage over competition, the company needs to adapt to the changing environment by increasing the creative marketing strategy, introducing new products, and expanding the business globally. By adapting to the changing environment, A-B is able to project long-term objective goals that will keep the company aggressive and diverse in a fluctuating market.
References
Anheuser-Busch.
(2008). Retrieved September 26, 2008 from http://www.anheuser-busch.com/ethics/docs/securities_insider.htm
Anheuser-Busch. (2008). Retrieved September 26, 2008 from http://www.anheuser-busch.com/abweb2/pressarticle.aspx?guid=14D63A5D-D77E-4941-B01F-A1692DE69135
Anheuser-Busch. (2008). Retrieved September 30, 2008 from http://www.anheuser-busch.com/Environment/Environment.html
Anheuser-Busch. (2008). Retrieved October 4, 2008 from http://www.anheuser-busch.com/Press/Backstoppers_040108.html
Anheuser-Busch. (2008). Retrieved October 4, 2008 from http://www.beerresponsible.com/
Anheuser-Busch. (2008). Retrieved September 20, 2008 from http://www.anheuser-busch.com/Diversity/Diversity-Vision.html
McConnell, C. & Brue, S. (2004). Microeconomics: Principles, Problems, and Policies. New York: The McGraw-Hill Companies.
Dictionary. (2008). Retrieved September 30, 2008 from http://dictionary.reference.com/browse/ecology
Hearld Tribune. (2008) Retrieved October 6, 2008 from http://www.iht.com/articles/2008/07/14/business/BEER.php
Pearce, J., & Robinson, R. (2004). Strategic Management. New York: The McGraw-Hill Companies.
Webster. (1996). Webster’s II new riverside dictionary, revised edition. New York: Houghton Mifflin
Company
Introduction
This paper will address trends and forces that are affecting Anheuser-Busch and will more than likely continuously affect the company. This paper will also assess the company’s market and address the organization’s strengths, weaknesses, opportunities, and potential threats. Finally, the paper will present three long-term objectives then restate the mission and vision statement.
Refine the analysis of the forces and trends Strategic adaptability is crucial for any company trying to survive in today’s economy. Companies must examine the market looking for opportunities to grow and improve the business in a changing environment. Webster’s dictionary defines adapting as adjusting …show more content…
or becoming adjusted to a specific use or situation (Webster’s, 1996). “The most prominent factor in the remote environment is often the reciprocal relationship between business and the ecology†(Pearce & Robinson, 2004). Numerous businesses today are “going green†due to concern about the environment; however, while other companies are “going green,†Anheuser-Busch has been practicing this philosophy since the 1800’s when one of A-B’s founders, Adolphus Busch, began recycling leftover grain for cattle feed. A-B has adapted in several ways from recycling more than 27 billion cans annually, becoming a national leader in wildlife rescue and habitat conservation, to striving to conserve water and energy through the Bio-Energy Recovery Systems (BERS) technology, which is a process that reclaims nutrient-rich leftover water to create renewable energy that provides fuel for the breweries (Anheuser-Busch, 2008). To continue the efforts of environmental stewardship and adapting in today’s efforts of “going green,†A-B implemented an Electronics Recycling Initiative at the Sea World in San Diego that has recycled over 240,000 pounds of recyclable electronics that not only aided in protecting the environment but also helped support the restoration and protection of native habitats for migratory species (Anheuser-Busch, 2008). “Many of the world’s largest corporations are realizing that business activities must no longer ignore environmental concerns†(Pearce & Robinson, 2004).
Macroeconomic Forecast During the fluctuation of the economy, the demand for beer has yet to waver. Today the economy is in the worst condition ever yet the future forecast for Anheuser-Busch (A-B) in the beer industry looks remarkable. Consumer spending varies based on disposable income. When the disposable income decreases, consumers do not spend as much on nonessential items and when disposable income increases, consumers are more apt to spend more. Regardless of how much disposable income consumers have, consumers tend to find the necessary resources to use to purchase beer. Consumer spending is not the only variable with future forecasting; demographics are vital to the equation. Young adults are considered to be the largest consumers of alcoholic beverages. A-B should take advantage of the increased population overseas by focusing on global demographics to increase continuous growth. The consumption of alcoholic beverages and energy drinks is steadily growing creating potential for growth for A-B.
Social and Cultural “Environment presents firms with opportunities, threats, and constraints, but rarely does a single firm exert any meaningful reciprocal influence†(Pearce & Robinson, 2004). A-B believes in giving back to the community and has numerous benefits and outreach programs proving the company’s social and culture efforts. For more than a century, A-B has extended a helping hand to the needy by donating to community organizations worldwide and touching innumerable individual lives. Over the past 10 years, A-B has contributed in excess of “$370 million to charitable organizations, including those that support education, health care, the arts, cultural enrichment, social services and environmental conservation†(Anheuser-Busch, 2008). One of the biggest initiatives this year that A-B has introduced is a “Street Smart†program that focuses on underage drinking, driving under the influence, using illegal drugs, or driving without the use of a seatbelt. A-B has partnered with I-95 Corridor Coalition and the Florida Department of Transportation to encourage students who resides in states along I-95 to be “Street Smart.†This program will allow students attending high school in states from Florida to Maine along I-95 to experience real-life drama by fire fighters and paramedics as they work to save lives of students who made poor decisions of underage drinking, driving under the influence, using illegal drugs, or driving without the use of a seatbelt (Anheuser-Busch, 2008). Although this program is focused mainly on students residing in states along I-95, A-B also promotes responsible drinking overall which focuses on preventing underage drinking and drunk driving across the country.
Political
“The direction and stability of political factors are a major consideration for managers on formulating company strategy. Political factors define the legal and regulatory parameters within which firms must operate†(Pearce & Robinson, 2004). Some political factors have constraints that may diminish the possible earnings of the company while some political factors are intended to benefit and protect the company. The constraints can consist of fair trade decisions, antitrust laws, pricing policies, and minimum wage legislation all which are geared at protecting stakeholders (Pearce & Robinson, 2004). The federal government uses the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to pressure the beer industry through the numerous ATF Rulings for alcohol. Some of the rulings are Labeling and Advertising of Malt Beverages, Importation of Alcoholic Beverages, Labels on Imported Alcoholic Beverages, Imported Bulk Beer, “Ice Beer,†Direct Shipment Sales of Alcohol Beverages to name a few. Anheuser-Busch uses political factors to assist the company in preventing insider trading. Insider trading can affect the market value of the company’s securities or the possibility of a potential investor to purchase, sell, or retain the company securities. For example, insider trading information that could be considered detrimental is knowledge of a company’s change in expectant earnings, change in pricing plans, possibly acquisitions and mergers, disputes between suppliers and customers to name a few (Anheuser-Busch, 2008). For example, when InBev purchased A-B, if employees had prior information of a change in pricing plans, dividend rates or a change in expected corporate earnings, this would have been considered insider training and would have affected the sale between InBev and A-B. Occasionally Anheuser-Busch employees are privileged to proprietary and confidential information regarding acquisitions and mergers along with financial information that is crucial to the company. Since some employees are aware of this critical information, any attempt to benefit from the use of this information is illegal if the documents have not been relinquished to the public. When an individual purchases or sells Anheuser-Busch securities with the knowledge of inside information that has not been disclosed to the public, this is considered insider trading. Rule 10b-5 of the Securities and Exchange Act of 1934 prohibits trading in company stock before the information is made public (Anheuser-Busch, 2008). Therefore, A-B implemented Insider Trading of Securities Policy to prevent employees from using the information for self purposes or sharing the information with others. By implementing this policy, A-B employees are aware of the consequences and legalities for the misuse of the material information. Among the political and legal factors associated with A-B, are the Political Action Committees (PAC’s) that although not affiliated with the government, are influential in having the government pass legislation. Stricter liquor and beer laws, an increase in the current drinking age, and an increase in penalties for drinking and driving are a major focus for groups such as: Students Against Drunk Driving (SADD), Mothers Against Drunk Driving (MADD), and various other state alliances who are against the use of underage drinking.
Technological
In order “to avoid obsolescence and promote innovation, a firm must be aware of the technological changes that might influence its industry†(Pearce & Robinson, 2004). This is imperative that companies identify existing technological advances and recognize possible future advances that may influence the company’s products and services especially with technology evolving regularly in today’s society. A-B uses technology to maintain accurate inventory of all the products. Maintaining accurate inventory allows A-B to ensure availability of products to the retailers for purchase. Technology changes frequently, therefore, A-B must adapt to the ever-changing forces and trends of technology. “Creative technological adaptations can suggest possibilities for new products, for improvements in existing products, or in manufacturing and marketing techniques†(Pearce & Robinson, 2008). Implementing the A-B mobility program, which is a software program that allows an employee to input and transmit customer inventory and orders to the company’s warehouse, ensures better accuracy of inventory and orders for next day delivery. Once the data is loaded and transmitted to the warehouse, warehouse personnel receive this information and can begin preloading the necessary product for delivery to the retailer. By introducing a training strategy, the company will ensure that the employees are equipped with all the necessary information to be proficient at using the program. Using this A-B mobility program allows employees to perform a more efficient and productive job, which overall pleases the customer. The A-B mobility program also allows sales employees to view past inventory history, the total cost of new inventory to be delivered, and any current promotions. Having this information at the salesperson’s fingertips provides excellent customer service. Innovative technological adaptations can lead to potential for new products, for enhancements in current products, or in developing and advertising methods. Anheuser-Busch continues to conduct technological forecasting in order to protect and improve the profitability of the company in the beer industry. Anheuser-Busch understands that in order to continue to be the number one beer company, the company has to predict precisely the future technological capabilities and the impact that the capabilities will have on the future growth of the company then implement the strategy.
Demographic
The consumption of beer is primarily determined by consumer demographics. In order for A-B to remain a superior beer company, A-B must provide the product to various demographics. For example, A-B must focus specific marketing towards young adults, diverse cultures and ethnicity, different genders, and social, economic, and lifestyle differences. Since such an extensive group of consumers exists, A-B should shy away from a standard approach of marketing due to the difficulty of reaching all intended targets. In order to target properly the various clienteles, A-B should survey the different groups to determine the likes and dislikes so that current and potential consumers are satisfied.
Competitive Analysis A-B is currently doing well in the beer industry. Known as the “King of Beers,†A-B continues to display why the company remains the top leader in the beer industry. Through continuous innovation and technology, introduction of new products, the focus on brand image and aggressive and assertive marketing, A-B has been able to sustain many downfalls in the ever changing market. Due to competitive pricing, customer service and new products, A-B has been able to maintain sales and gain tremendous strides ahead of the competition, SABMiller Brewing. Unlike retail where pricing is determined by the name on the label or the name on the department store, the frontline beer pricing is the same for all retailers across the board whether the company is a large store such as Sam’s or Wal-Mart or a small independent neighborhood store. A few exceptions exist when frontline pricing on certain products is lower or higher than competition. Those exceptions include: monthly promotions where A-B will have bottles on sale and Miller Brewing will have cans on sale or vice versa or the distribution of special packages released to the market for different occasions. Another exception is during yearly price increases when competition will not raise the price on a certain package during increase period. A-B then decides whether to match that price or combat the price with another package that will be more profitable for the company to reduce. However, due to A-B’s survival instinct, the company has been able to sustain these reductions to match competition because the company has been able to be productive in maximizing the dollars in other areas such as imports through InBev, energy brands such as Monster and Losts and now water to add to the portfolio. In addition, once the retailer receives frontline pricing, the pricing to the consumer is based on each individual retailer and not by the beer industry. Both companies seek to have competitive pricing among similar product, but although the product is similar, A-B’s brands stand alone and are produced with the best ingredients to provide a quality taste in a quality product. Once again A-B displays why the company is position as the leader in the beer industry and why the company continues to set itself apart from all the rest.
Assessment of Market Currently A-B is in good standing in the beer industry and with the recent merger with InBev, an import company operating out of Belgium, places A-B in a league of its own. This business merger makes A-B the number one beer company in the global market and is an example of A-B continuing to meet the company’s mission goals. The organization’s mission statement is “to be the number one beer company nationally by enriching and entertaining an increasing global audience while delivering superior returns to the shareholders†(Anheuser-Busch, 2008). The market structure for the beer industry falls into an oligopoly market structure. Oligopoly consists of a few firms being present in the industry, each having a major element of the market. These firms produce a homogeneous or differentiated product that dominates the market. “Firms thus situated engage in strategic behavior and are mutually interdependent†(McConnell, C. & Brue, S., 2004). The behavior of A-B directly influences, and is influenced by, the actions of A-B’s competition SABMiller. A-B and SABMiller must consider the reactions of each company in terms of pricing, advertising, and product development decisions (McConnell, C. & Brue, S., 2004). A-B has substantially increased its market share making Budweiser and Bud Light, the nations two top brands, account for practically half the beer sold in the U.S. The downfall of regional competitors is partially accredited to A-B’s success but is also attributed to A-B’s strategic ability. A-B continues to build state-of-the-art breweries, produce effective advertising campaigns, and form compelling relationships with regional distributors. Although SABMiller continues to create competition, several opportunities and issues exist that will be addressed through the strategic planning process. Opportunities that exist range from new products and market expansion to unrivaled distribution channels to issues ranging from high gas prices to increases in federal excise taxes.
SWOT Analysis Anheuser-Busch, the “King of Beers†and the leader in the beer industry, possesses a wealth of strengths. A-B is dominating sales and brand image, is financially sound, and creates a positive work environment. A-B’s sales are steadily increasing due to the company’s innovative marketing strategies that build up brand image which improves consumer knowledge and approval of the products and services. A-B’s investments are not limited to the beer industry; the company also owns amusement parks. A-B’s financial stability is evident by the extremely low debt and by immense leveraging capabilities. To remain the leading company in the beer industry, A-B must maintain the current positive work environment by continuing to hire and retain a robust management team with substantial experience. By maintaining such a management team with a positive work environment, A-B will remain an excellent company fostering positive management and employee relations. Along with strengths comes weaknesses and in order for any organization to improve stature in its industry, the organization must recognize the weaknesses then resolve them. A-B must examine the company’s weaknesses of competitive price strategy and market overflow of brands then address and resolve them. A-B’s bottom-line is severely affected when the company is forced to respond to discounted competitive pricing strategies. When competition reduces pricing, A-B volume is affected because the company is forced to discount its prices to match competition. Due to the constant changing of market trends, A-B has continued to reach all demographic regions and diverse group of drinkers by attempting to satisfy the vast range of drinkers needs. As other products enter the market, this creates competition for current placements causing market shares to fluctuate due to the large amount of availability of products to select from. A-B has significant opportunities for growth in the beer industry. Since InBev acquired A-B, the strategy is “expand Budweiser into Europe, Asia and Latin America†(Herald Tribune, 2008). Introducing Budweiser globally is key, however, “Anheuser-Busch InBev unrivaled distribution channels in the world's five largest beer markets: China, the United States, Russia, Brazil and Germany†is an opportunity that will lead to maximum growth for A-B (Herald Tribune, 2008). As A-B continues to move forward and expand the company’s portfolio, new opportunities are presented. A-B has currently branched out into the nonalcoholic market. The joint venture with Hansen Natural, which is a major producer of the energy drink Monster which has shown significant profit and growth, has once again proven why A-B is currently the leader in the beer industry. A-B is highly regarded as superior competition within the beer industry yet the company is not excluded from external threats. With today’s economy in the current poor state, high gas prices are a threat that dictates how often deliveries are made to customers. As gas prices began to increase, select customers who received twice a week deliveries were reduced to once a week deliveries, delivery routes where changed, delivery drivers went from a five day work week to a four day work week in an attempt to save gas. Another threat affecting A-B is the abrupt increases in federal excise taxes on alcoholic beverages which A-B assumes the responsibility of paying and does not pass on those additional charges to the customer.
Long-term Objectives “To achieve long-term prosperity, strategic planners commonly establish long-term objectives in seven areas: profitability, productivity, competitive position, employee development, employee relations, technological leadership, and public responsibility†(Pearce & Robinson, 2004). A-B should attempt to penetrate a diverse market while maintaining the loyalty of the current market. Secondly, the company should always search for methods to improve the products and service to maintain longevity in the industry. Lastly, another approach to maintaining longevity is to remain competitive by funding marketing programs that will attract customers globally.
Mission and Vision Statement
Anheuser-Busch’s mission is to be the number one beer company nationally by enriching and entertaining an increasing global audience while delivering superior returns to the shareholders. A-B’s vision is through all our products, services, and relationships, we will add to life’s enjoyment and the company’s values are quality in everything we do; exceeding customer expectations; trust, respect and integrity in all of our relationships; continuous improvement, innovation and embracing change; teamwork and open, honest communication; each employee’s responsibility for contributing to the company’s success; creating a safe, productive and rewarding work environment; building a high-performance, diverse workforce; promoting the responsible consumption of our products; and preserving and protecting the environment and supporting communities where we do business (Anheuser-Busch, 2008). In order for organizations to maintain longevity within an industry, the company must implement new strategies. Even though A-B reigns in the beer industry, the company continues to look for new areas to further enhance the business such as diversity; therefore, A-B created a Diversity Employee Resource Group (ERG) to improve the overall work environment and provide a better understanding of what the customer prefers in order to satisfy the customer’s needs. The ERG’s vision is to be recognized as a LEADER in diversity by our employees and external stakeholders†and the mission statement is to “drive business results through our commitment to diversity and foster a culture of inclusion demonstrated by: who we hire, retain, and develop; who we create our products for; and who we support through charitable contributions, business purchases and alliances (Anheuser-Busch, 2008).
Conclusion
In order to grow substantially as a company, a thorough environmental analysis needs to be completed. An environmental analysis was conducted for Anheuser-Busch in order to provide the company with a better understanding of the relationship between macroeconomics factors and organizational variables. As a result of the analysis, A-B needs to understand that in order to maintain a competitive advantage over competition, the company needs to adapt to the changing environment by increasing the creative marketing strategy, introducing new products, and expanding the business globally. By adapting to the changing environment, A-B is able to project long-term objective goals that will keep the company aggressive and diverse in a fluctuating market.
References
Anheuser-Busch.
(2008). Retrieved September 26, 2008 from http://www.anheuser-busch.com/ethics/docs/securities_insider.htm
Anheuser-Busch. (2008). Retrieved September 26, 2008 from http://www.anheuser-busch.com/abweb2/pressarticle.aspx?guid=14D63A5D-D77E-4941-B01F-A1692DE69135
Anheuser-Busch. (2008). Retrieved September 30, 2008 from http://www.anheuser-busch.com/Environment/Environment.html
Anheuser-Busch. (2008). Retrieved October 4, 2008 from http://www.anheuser-busch.com/Press/Backstoppers_040108.html
Anheuser-Busch. (2008). Retrieved October 4, 2008 from http://www.beerresponsible.com/
Anheuser-Busch. (2008). Retrieved September 20, 2008 from http://www.anheuser-busch.com/Diversity/Diversity-Vision.html
McConnell, C. & Brue, S. (2004). Microeconomics: Principles, Problems, and Policies. New York: The McGraw-Hill Companies.
Dictionary. (2008). Retrieved September 30, 2008 from http://dictionary.reference.com/browse/ecology
Hearld Tribune. (2008) Retrieved October 6, 2008 from http://www.iht.com/articles/2008/07/14/business/BEER.php
Pearce, J., & Robinson, R. (2004). Strategic Management. New York: The McGraw-Hill Companies.
Webster. (1996). Webster’s II new riverside dictionary, revised edition. New York: Houghton Mifflin
Company