SWOT ANAYLYS on SABMILLER The brewing industry has been consolidating to secure brands and national positions

SWOT ANAYLYS on SABMILLER
The brewing industry has been consolidating to secure brands and national positions. International brewers have also been investing for further growth, particularly in new and developing markets such as China, Latin America and Russia. Industry consolidation would raise the intensity of competition, which could lead to a loss of market share.
A.STRENGHTS
The company has a presence in more than 60 countries across six continents. SABMiller operates through five geographic regions including; North America, Latin America, Europe, South Africa and Africa and Asia. SABMiller operates in North America through its subsidiary, Miller Brewing Company (Miller), which is the second largest brewer in the US. The company’s operation in Latin America consists of six countries including Colombia, El Salvador, Ecuador, Honduras,Similarly, its brewing operations in Europe primarily consist of eight countries including the Czech Republic, Hungary, Italy, Poland, Romania, Russia and Slovakia.
In Asia and Africa, the company operates in around 31 African countries and other Asian countries including China, IndiaThe global scale helps SABMiller, to develop its brands on a global level and provides a valuable platform for distributing and selling its international premium brands Miller Genuine Draft and Pilsner Urquell. It also helps the company to develop regional brands such as Kozel in Europe and Eagle in Africa. In addition, with 200 brands, it is possible for individual businesses to select particular beers from company’s global portfolio and introduce them in their own markets as Miller is doing with a number of Latin American brands. The global scale allows SABMiller to share brand innovation. Redd’s, for example, originated in South Africa, moved to Poland, where it benefited from further innovation, and is now doing well in Russia.
A global scale enhances the brand value of the company and helps it to offer customized products to its customers across the globe.
In the other hand, SAB Miller was established more than 100 years. A long time history would help SAB miller get more operating experience of company, customer was easily to identify SAB Miller brand name and company was obtained a lot benefit from customers that was a loyal with company in a long time.
The company has an excellent record of generating cash. Cash generated from operations increased by 226.5% in 2003 compared with prior year to reach $543 million. Net cash inflow from operating activities, before working capital movement (EBITDA), rose to $1568 million in 2003 compared with $975 million in 2002. Strong cash flow would help the company to pursue its expansion plans.
Company also focus to operational efficiency and work hard on strengthening SAB regional brands and market positions, pursuing acquisitive growth only where SABMiller can see the potential to add real value for shareholders. To strengthen marketing focus and coordinate the drive behind company international premium brands, companies have created a new role of group marketing director
B.WEAKNESS
Beside of strength that SABMiller obtained in 2004, there was also some weakness that was challenges for company.
The SABMiller was difficult within management skill, with global operation in many countries and many geographic segments; company was difficult to manage effective ways for each culture and region. Managing a large organisation that spans regions and continents, against the backdrop of industry competitiveness, poses many information challenges. Global brewing giant, SABMiller is no exception to the problems created by ensuring accurate and timely data transfer between offices, operations, and employeesOn top of this there are fears, rejected by the company, that new competition laws in South Africa could force it to sell assets, and over the continuing weakness of SABMiller’s central American markets.
C.OPPORTUNNITY
With strategy position was presented by case in 2004, SABMiller was able to direct of many opportunities for company strategy.
The first opportunity that SABMiller could be matching to achieve growth within individual countries or geographic regions, where company can build strategy positions synergies achieve economies of scale.
Following the case, SABMiller strategy tended to seek value adding opportunities to enhance company position as global brewer.
Moreover, SAB miller belief that economic development, converging customer taste and lowering of trade barriers would achieve further consolidation of the beer market.
The most important trend to have shaped the global brewing business over the last decade is the volume growth, which has primarily come from emerging markets. SABMiller has strong presence in these emerging markets and can increase its revenue from these growing markets.
D.TREAT
The prices of key materials used in the production and packaging of beer including barley and aluminum is increasing.
“According to HSBC and ING Barings, by 2001 beer volumes in South Africa were declining at annualized rate of about 4 percent and there were few signs that growth in the rest of Africa was holding up. There were also concerns that costs of raw materials would rise.” In North America, “reflects the impact of the volume decline, as well as negative brand, pack and geographic mix, increase cost of raw materials and greater energy costs, partly offset by higher selling prices.”Increasing raw material prices would increase the operating costs of the company and adversely affect its margins if it is unable to pass on such cost increases to consumers.
The brewing industry has been consolidating to secure brands and national positions. International brewers have been investing for further growth. Further consolidation is expected as companies seek to broaden their global footprints in order to chase enhanced growth from emerging markets. Industry consolidation would raise the intensity of competition, which could lead to a loss of market share of the company.