SABMiller is an international company with its main interest the brewing of beer. To understand SABMiller's strategic position is to consider their strengths and weaknesses against what is happening in the environment (Robson, 1997, p. 29). Annexure A reflects the prioritisation of the basic process of strategic analysis.
1.2. External factors affecting SABMiller
Annexure B contains a P.E.S.T analysis for SABMiller but since environmental factors are country specific it is most effective when performed for all countries of interest.
1.2.1. Political Analysis
Governments across the world take extreme measures to regulate alcohol because it affects the consumer's mind. The Miller deal exposed SABMiller to one of the highest regulated industries in the world. Re-establishing consumer loyalty towards the Miller brand will be made difficult by factors such as nationalism.
1.2.2. Economical Analysis
Figure 1.1 indicates that the acquisition of Miller ensured a greater balance between a cash-generative mature market and the cash-consuming developing markets. However, negative impact of brand, pack and geographic mix, increased cost of raw materials and greater energy costs make business in the USA difficult'. (SABMiller, 2003, p. 8)
1.2.3. Social Analysis
SABMiller assess their alcohol issues policy regularly to ensure responsible advertising, packaging, promotions and that the underage is not targeted.
They recognise their social responsibility towards HIV/Aids and provides support and training that focuses on the prevention of the disease.
1.2.4. Technological analysis
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...when the suppliers are able to force up prices or reduce the quality of the inputs they supply. SABMiller makes it difficult for any other brewery to establish itself in the South African market due to the strong bargaining position it has when buying its ingredients. Owing to the volumes it purchases, it can ensure that suppliers of ingredients, such as hops, look after SABMiller's interest first before supplying to other companies'. (Du Plessis et al, 2001, p. 44)
The combination of emerging market growth potential and the earning of hard currencies through Miller made SABMiller one of the most diverse players in the industry but its lack of experience and the loss of focus might be risky on the long run. SABMiller's strategy of growing through acquisitions put them in a position where the threat of hostile takeover is now highly unlikely.
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