South African Breweries
Case 21
South African Breweries
Executive Summary
South African Breweries (SAB) one of the biggest global producer of beer which is facing several problems such as:
SAB has operated in many countries with instable currencies which makes company looking for other alternatives of sufficient capital.
Whether is better to enter emerging markets or developed markets.
SAB stays on intersection which leads to many local brands in one direction and one global brand in other direction.
Stay alone with implementing more effective information technologies or merge with other serious global competitor.
SAB can implement several alternatives which can solve those issues and lead to higher profitability such as:
Preferring emerging markets instead of developed markets because of higher potential of increase in profitability.
Establishing one global brand but with keeping local brand productions with its local names but only as variety kinds of one main international brand name.
Changing existing accountings in countries with instable currencies where SAB operates to accountings based on harder currencies such as Euro, British pound, or American dollar.
Merge with other international competitor which plays major role in different areas of the world and be better off. Moreover, there is a potential to cooperate or make consolidation with other competitor and invest into untouched areas such as Muslim countries.
In spite of the fact that there are many strengths which SAB poses, there are some weaknesses too which SAB should deal with. On of the major weaknesses is a weak currency by which SAB operates in Africa. Because SAB covers almost 98%of the whole market in the beer industry and all contracts, accounts payable and receivable or any earnings are in South African Rand which is instable currency. Moreover, according to many statistics, most of the customers in South Africa who drink a beer have HIV or AIDS. In other
South African Breweries
Executive Summary
South African Breweries (SAB) one of the biggest global producer of beer which is facing several problems such as:
SAB has operated in many countries with instable currencies which makes company looking for other alternatives of sufficient capital.
Whether is better to enter emerging markets or developed markets.
SAB stays on intersection which leads to many local brands in one direction and one global brand in other direction.
Stay alone with implementing more effective information technologies or merge with other serious global competitor.
SAB can implement several alternatives which can solve those issues and lead to higher profitability such as:
Preferring emerging markets instead of developed markets because of higher potential of increase in profitability.
Establishing one global brand but with keeping local brand productions with its local names but only as variety kinds of one main international brand name.
Changing existing accountings in countries with instable currencies where SAB operates to accountings based on harder currencies such as Euro, British pound, or American dollar.
Merge with other international competitor which plays major role in different areas of the world and be better off. Moreover, there is a potential to cooperate or make consolidation with other competitor and invest into untouched areas such as Muslim countries.
In spite of the fact that there are many strengths which SAB poses, there are some weaknesses too which SAB should deal with. On of the major weaknesses is a weak currency by which SAB operates in Africa. Because SAB covers almost 98%of the whole market in the beer industry and all contracts, accounts payable and receivable or any earnings are in South African Rand which is instable currency. Moreover, according to many statistics, most of the customers in South Africa who drink a beer have HIV or AIDS. In other
References: Heineken targets Muslim markets. (2003, July 4). Retrieved July 27, 2007, from http://news.bbc.co.uk/1/ hi/ business/ 3046456.stm NEWS ANALYSIS: Interbrew refuses to rule out future bid for SAB. (2001, November 29). Retrieved July 27, 2007, from http://findarticles.com/p/ articles /mi_qn4158/is_20011129/ai_n14425662 Philip Morris Companies Inc. Announces Agreement to Merge Miller Brewing Company Into South African Breweries plc.(2007). Retrieved July 26, 2007, from http://www.altria.com/ media/02_00_NewsDetail.asp?reqid = 3011 02 The South African Breweries, plc. (2007). Retrieved July 27, 2007, from http://www.ilo.org/public/english/ employment/skills/workplace/case/ case7.htm