Sabmiller

RECENT SUCCESSFUL AND FAILED CASES IN GLOBAL STRATEGIC MANAGEMENT
Professor: RODOLFO RIVAS

18th June 2012 Sérgio Beito, 53077

Index
Executive Summary 3

Question 1

4

Question 2

6

Question 3

8

Question 4

9

Appendixes

13

References

16

2

Executive Summary
In the year 2000 SAB Company, which had already moved their headquarters from South Africa to the UK, was placed 5th in world brewing production (around 3.5%). Ten years later and after several acquisitions and the MillerCoors LLC joint venture (USA) they were able to reach 2nd with almost 14% of world beer production. SABMiller focuses on two main financial drivers for driving success: (1) maintaining or improving margins, and (2) growth of revenues at a faster pace than competitors. They have grown their presence throughout the whole world in a multinational strategy for their global operation strategy. In terms of geographic businesses, if we exclude the more mature markets (North America and Europe), it can be observed that revenues have increased over the past years in the emerging markets - Latin America, and Africa and Asia. The market penetration strategy that SABMiller has pursued, consolidating several positions in important markets by buying out competitors gaining market power and overall efficiencies, has sustained their growth since they internationalized their company. 94% of their lager volumes come from markets where they have no. 1 and no. 2 positions.

3

Question 1)

SABMiller’s financial performance in 2011 was very strong and

quite impressive given the world economic conditions, which lead to an increase of 13 US cents (19%) in dividends over the prior year. Each of their geographical business markets improved its financial performance and delivered higher EBITA than the previous year:  Latin America produced EBITA growth of 17% (sales volumes remained level with prior year)      In Europe EBITA increased by 2% (volumes fell by

References: 1) Lassila, Aaron, (2006). Industry Analysis: Adolph Coors in the Brewing Industry, Strategic Management, 2-3. 2) SABMiller’s Annual Report 2009 3) SABMiller’s Annual Report 2010 4) SABMiller’s Annual Report 2011 5) SABMiller’s Who we are and what we do Report 6) SABMiller’s Company Snapshot Report 2011 7) Heineken Annual Report 2011 8) AB InBev Annual Report 2011 9) Rivas, Rodolfo (2012). Recent Successful and Failed Cases in Global Strategic Management MscBA Class Notes. 10) Daniels, J. D., Radebaugh, L. E. and Sullivan. International Business: Environment and Operations, Pearson, Prentice Hall, 12th edition, 2009. 11) Johnson, M. & Johnson, G., (2005). Case Teaching Notes, Pearson Education Limited, 349-354. 12) Johnson, G., Scholes, K. & Whittington, R. Exploring Corporate Strategy, Prentice Hall, 8th edition, 2008. 13) Cooper, Ben. Brewers look to premium brands to alleviate recessionary woes. Just-drink, 11 June 2012. 14) Sell foam like soap: To maintain profit growth, brewers will need keen marketing. The Economist, May 5 2011. 15) Mongeau, S. & Haanappel, Hans, (2009). Mergers and Acquisitions Analysis: SABMiller Plc. Acquisition of Royal Grolsch NV. Rotterdam School of Management. 16) Website research: SABMiller, AB Inbev, and Heineken. 16