Business Analysis: Porter's Five Forces Of The Brewing Industry

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Register to read the introduction… Due to the modern consciousness of healthy living; low calorie beers and non alcoholic beverages are increasing in volume; this doesn't affect SABMiller as much compared to other brewers as the company it self produces alternative products to beer such as the low calorie versions; SABMiller has also recently entered wine and soft drinks market in Africa as I'm predicting more of this similar strategic activity will occur in other markets. From the PESTEL; Porters 5 forces and the Competition Analysis; I am concluding that SABMiller operates in developing as well as matured markets. These markets include very "challenging" aspects which in the past has limited the threat of new entrants. These markets include very tough competition; as rivalry in the Brewing Industry is increasingly high. These markets tend to have a fragmented brewing industry and it is essential to have extensive capital and knowledge to setup a brewing enterprise. In developed and more matured markets the industry is consolidated and dominated by a few, larger players. As such, these large companies, like SABMiller tend to own multiple brands with different market positions. In this market, it is much easier for competitors to launch rival products that compete directly on price and thus eroding market share. After analysing the company's competition; SABMiller has and still is experiencing this problem; For …show more content…
8th Edition; Case Study: SABMiller; McQuade, 2006). Mapping out the early days in South Africa, SABMiller's strategy was flexible and responsive to the market. SABMiller acquired local brewing businesses to enable them to grow and overcome certain business restrictions through acquisition. SABMiller also expanded their portfolio to include wine, matches and the Sun City casino resort. When the political regime and the regulatory environment lifted, SABMiller developed three megabreweries in South Africa. By being at ease in these types of challenging environments it enables SABMiller to aggressively grow and capture market share when arguably other firms would be paralysed by fear. Instead, SABMiller are able to scan their external environment and turn threats into opportunities. In doing so, providing a distinct set of capabilities, which is very difficult to imitate. The tough African roots have given SABMiller the confidence and self belief to come up with solutions during tough conditions in developing markets. The company is also very experienced in dealing with very sensitive governments and local communities. These efforts also show that they are very flexible. SAB used its expert management skills learnt from Africa, to turnaround Millers' fortunes. Traditional SAB system of employee performance rating was used in Miller. These efforts earned them the name turnaround specialists. The parenting style of SABMiller adds value to the breweries. In the new

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