Table of Contents
Abstract
The company is a Belgian-Brazilian brewery that specializes in the distribution of alcoholic beverage across the globe. The headquarters of the company has its location in Leuven, Belgium. AB InBev was found in 1852 in St. Louis Missouri. Eberhard Anheuser engraves the story of the company with the purchase of a brewery as a part owner who eventually bought the whole business. The acquisition of different organizations plays a critical role in the development and success of AB InBev. The mission statement of ABInBev includes becoming the best company regarding brewery capabilities, enrich customers with the best feeling of beer, and provide investors with a lucrative return on their investments (Morschett, Schramm-Klein & Zentes, 2015). The vision statement of the corporation includes its efforts in becoming a people-centered organization that respects clients and fulfill their beer requirements. SWOT analysis depicts the dynamics that influence the corporates functionality.
Notable strength includes the established infrastructure attributed to the age of the organization, ownership of the vertical supply chain of their products and its capability of acquisition of strategic companies (Garavaglia & Swinnen, 2017). The weakness communicates the failures of the company, for example, old and poor communication, financial issues due to acquisitions, and distribution strategies. Opportunities include the purchase of SABMiller. Threats entail antitrust laws and regulations that limit the expansion of the organization.
Strategic management with SWOT analysis on AB InBev
Anheuser-Busch InBev SA/NV represents the largest brewing and beverage company in the globe with an operating income of approximately 17.15 billion dollars. The company is a Belgian-Brazilian brewery that specializes in the distribution of alcoholic beverage across the globe. The headquarters of the company has its location in Leuven, Belgium. The growth of the company has occurred on a consistent line as it global expansion has included significant mergers. The business tactics used by the management of the institution have enabled the company step into the global brewery market as a market leader (Straus, 2016). The recent acquisition of SABMiller in 2016, AB InBev cemented its position as the world largest breweries with complete dominance of the market in every culture and social spheres. SABMiller was the world second largest brewery; therefore, its acquisition guaranteed its crown. The purchase opened the company into new market notably the ones that were held by SABMiller. Since the acquisition, the income surged realizing 56.44 billion dollars revenue more compared to 45.5 billion dollars achieved in 2016 before the completion of the merger. Strategic planning of the business of the company states that they are working towards a 28 percent dominance of the global beverage market.
AB InBev was found in 1852 in St. Louis Missouri. Eberhard Anheuser engraves the story of the company with the purchase of a brewery as a part owner who eventually bought the whole business. He became partners with the son-in-law Adolphus Busch (Collin, Hill & Smith, 2015). The duo changed the name of the company to reflect the joint venture calling it Anheuser-Busch a name maintained to date. The company adopted innovative technologies of the time to make the manufacturing process of beer unique and efficient as well. The adoption of the pasteurization depicted a game changer for the company as it fosters continued improvements, as the duo was open to changes. The use of refrigeration in the storage of beer acted as an addition of value to the product a service widely offered in the modern society. For the maintenance the quality of the product, the company brought into application the use of refrigerated rail vehicles for the transportation and distribution of the products (Yi, Kang & Jun 2016). Diversification of Anheuser-Busch as a brewery company enabled the business to survive the century, maintain its grip on the market share, and foster massive expansion as well. It is evident due to the regulations that put many brewery industries out of business after its enactment in 1920.
The history of the success and progress of the company centers on their ability to adopt new ideologies, flexibility in the implementation and consumer-centered services. The process of expansive growth has its basis in the ability to acquire a strategic business that thrust the brand and the product of the company to greater heights. In 2004, Anheuser-Busch merged with the infamous Interbrew (Katou & Budhwar, 2014), a company that had great include as far as brewery was a concern. The market share for was utter domination in North America, Europe, and Russia. The name ABInBev creation happened when the company merged with InBev. The phenomenon gave the company the status of the most critical brewery in the global with its headquarters in Leuven, Belgium. The rate of acquisition of other institutions by ABInBev has surged with the 2013 purchase of Mexican Grupo Modelo brewery and the South Korean Oriental brewery in 2014. The 2016 merger ensured that the position of the company as a global brewery force was unshakable. An inquisition into the strengths, weakness, opportunities, and threats of the Anheuser-Busch InBev depict the dynamics that influence features that drive the functionality of the business.
Value chain analysis
Value of a corporation is a convolution of the mission and vision of the organization with the values and activities that aim to achieve the stipulated principles. ABInBev maintains a strict observation of the traditions that propelled the company to success. The employee environment is based on transparency and accountability in the activities run in the organization. The value is a figment of the dynamics that positively influence the organization. ABInBev is keen on the environment and the holistic sustainability of the operations of the organization (Da Silva, 2016). The value chain involves the use of raw materials, goods produced and the channels used in the distribution. ABInBev has numerous projects and programs that seek to increase the sustainability of the business in respect to the environment and the working conditions of its employees.
The mission statement of ABInBev includes becoming the best company regarding brewery capabilities, enrich customers with the best feeling of beer, and provide investors with a lucrative return on their investments. The mission guides the corporation in the production of quality and safe products that respect the feedback of the customers. Its mission includes the achievement of a better universe through environmental conservation and improving the lives of people. The vision statement of the corporation consists of its efforts in becoming a people-centered organization that respects clients and fulfill their beer requirements. Beer is one of the standard alcoholic beverages in the globe, and the company seeks to influence the process of change through the provision of quality, safe and environmentally friendly products.
SWOT analysis of Anheuser-Busch InBev
The study of the strengths, weakness, opportunities, and threats formulates a matrix widely used to evaluate a business dimension by determining the multispectral influences of the operations of the business. SWOT analysis of ABInBev provides the mechanisms that facilitate the smooth running of the business through a close recognizant of the elements that influence the nature of the business form the external and internal components. SWOT analysis of an institution like ABInBev summaries the functionality of the institution and divide the intricate paradigms involved in the management of the organization into apparent ideologies. The advantages and disadvantages of the elements of SWOT analysis is the portrayal of a precise system of operations of an organization.
Strength
ABInBev has a well-established infrastructure that facilitates the production of its products in an environment that ensures quality and safety. Well-established infrastructure means that the company does not have to play within the restrictions of other upcoming institutions notably when it comes to developing infrastructure. It is because the expense of building such facilities has been eroded by the fact that they have existed other years. The beer brewery industry across the globe represents one of the most competitive industries in the global, and a little edge of the over other industrial players gives ABInBev a commanding advantage. The establishment of production facilities through the construction of facilities that obey the standards set forth by the regulatory boards of the globe has become an expensive endeavor thereby putting many businesses across the globe out of business.
Veridical integration of the supply change is a system that enables the producer of a particular product to have the ownership of the supply networks and facilities involved in the process. The ownership of the vertical chain of supply is a shrewd strategy in business as if gives the producers the complete control over the distribution process of their products thereby giving them the autonomy to make effective product decisions without the influence of variables that might impact the transactions like having different suppliers. ABInBev as a transnational institution has master the art of putting the dynamics of business orders its gripping. The cony=troll of the supply chain of products as the beer is a prudent way of maintaining the quality of the product straight from the production process to the consumer.
The contemporary world has seen an increase in the production of different beer brands that represent a mixture of genuine products and counterfeited. The owner of the vertical supply chain is a strategy used by old companies like Coca-Cola Company as they have already established facilities and networks to enable them to make such moves. Supply chain represents one of the critical business elements in the current business market (Rehm et al., 2016). The ownership of such facilities gives companies an astronomical advantage over other competitors, and new industries as the formulation of such facilities take ages. The complete ownership of the supply chain improves the value of the product for example beer as the legitimacy of the product becomes assured. The opportunity to change to the new technology and improvement of the products as per the requests of the consumers becomes easy.
We can do it today.
Supply chain ownership is an outlandish idea that has enabled ABInBev to stay ahead of the competition through the maximization of its resources as they have made the process of distribution affordable as the system falls under their control. The control of the vertical supply chain gives the company the mechanism to control counterfeit products and recall products that are considered defective swiftly. The efficacy of owning the supply chain is the increase in the level of management success of the distribution channels and the production process. Suppliers are the main people who understand the needs of the client through their direct contact. Ownership of such a component in the business world gives ABInBev the ability to conduct regular market surveys that have proved to be useful in the as per the accuracy of the data collected. Such is an essential element in business as it gives ABInBev the opportunity to create intimate relationships with the consumers of their products globally.
The acquisition power of ABInBev communicates the ultimate strength of the company. The dynamics of acquisition depicts an intimate story that elaborates the apparent procedure that ABInBev has put into the application to become the world largest producer, distributor, and seller of brewery products. The inception of the company was with it right the first acquisition process of the entity. The progress of the institution has important ties to the strategic planning and implementation of acquisition processes. The acquisition provides ABInBev with the opportunity to critically analyze the strengths of other institutions in the market, pitch their offer and buy out or merger with such institution to great an enormous entity committed to the production and supply of quality products to the consumers (Jonckheere, 2018). The acquisition represents shrewd planning and survival mechanisms that have enabled the company to outlive some of its peer companies. Existence for over a century as a strong global force in its respects calls for an excellent foundation in the fundamentals of an institution’s management and leadership mechanics.
ABInBev has acquired and developed the assets they own through century-long acquisition process that provide the institution with the opportunity to build on the infrastructure they have purchased. The acquisition of Interbrew in 2004 provided the company with the ability to conduct expensive projects in the markets that were held by former institutions. The European market was given access to the company because of the merger (Toro-Gonzalez, 2017). The 2008 acquisition of propelled the productivity capabilities of the institution to greater height by giving the institution the opportunity to improve on the facilities acquired and increased their production capabilities. The acquisition is a complicated procedure that requires years of expert study on the prospective institutions to be acquired and a transparent review of the books and files used in the management process. The acquisition of the strategic companies acts as the lifeline in the expansion process of the institution as a global brewery dominant force.
Acquisition reduces the intricacies involved in the venturing of a company’s product in a different market share. The procedure provides a smooth transition through the gradual introduction of a product and winning the hearts of people progressive and seductively. Mergers give competitors the opportunity to put aside their differences and dive into the market with the intention of maximizing the revenue that the industry can offer. The acquisition of 2008 gave ABInBev global status and recognition as the world largest producer and distributor of beer (Van de Kauter, Breesch & Hoste, 2015). The acquisition was an inception global rein in the industry, and the 2016 acquisition of SABMiller acted as a game changer for the whole industry. To be correct, ABInBev is the most massive beer company in the globe, SABMiller represents the second largest company in the world in the same industry. The merger was a work of fiction and a business deal of the century.
Acquisition of SABMiller was a significant power play that ensured the complete dominance of the global market with a project control of 28 percent of the market share when the partnership maximizes on their advantages. SABMiller as the world second largest had complete dominance of the African beer market with its great distribution of Pilsner. Exploration of the African market represents the next frontiers in respect to business and the continents moment for development is gaining thrust. The strength of such an acquisition portrays the continent as a major player in the influence and consumption of goods like beer. The purchase has a spin-off effective on strengths like established faculties and ownership of supply chain (Vrellas & Tsiotras, 2015). Acquisition of SABMiller provides the company with the access to the facilities around established in the Africa continent thereby planting its market dominance in Africa. Access to a robust vertical supply chain will play to the advantages of the institution as a global force and an apparent distributor of its infamous products and brands in the continent of Africa. Globalization has opened the opportunities in the continent give room for companies like ABInBev to take center stage in the management of the factors of production in the region.
Weakness
With great global dominance and product, penetration entails significant monetary need and utilization in the process. The ambitious activities centered on the acquisition of companies recent SABMiller has put a strain on the finances of the company. Financial analysts and business strategist argument that despite the significance of rapid global expansion corporations like ABInBev are accumulating tremendous amounts of debts in their wake (Luiz, Stringfellow & Jefthas, 2017). The situation might be a hell Mary for the banks, but the consequences of the fallout of the financial market might be devastating for the whole world. The surge in the degree of debt of ABInBev leaves the management of the institution with the dilemma of not letting the elements of debt control the institution. ABInBev used too much capital to acquire SABMiller, and the phenomenon has left the corporation with massive deficits.
The company used for than 105 billion dollars to acquired SABMiller leaving the companies accounts in astounding debts to the banks and financial institutions involved in the process. The value paid to purchase the company was way beyond the annual revenue of the institution. Though the total corporate valuation of assets can handle the muscle of the acquisition, the strain of the process has proved consequential to the overall management of the company (Frake, 2016). The acquisition claims to have had a positive effect on the overall sales and promotion of the business in markets with the Africa continent. The claims are considered book gains while the staffs of the corporation suffer from reducing bonuses and essential allowances as a strategic debt management strategy (Maani Hessari & Petticrew, 2017). The detrimental effect of the debt reduction strategy translates to the bruising of the human resources that could make the workforce morale. Human resource represents the primary component of any corporate success, and the maintenance of the environment for effective performance is paramount.
Communication is a significant challenge in the midst of the financial issues involved with the company. The transmission of the various changes in the employee’s finances has been utterly ineffective. The situation of poor communication strategies exaggerates the challenges of human resources management regarding the drive of the staff and the output of the products (Bumblauskas, 2017). The drastic changes happening in the organization do not receipt well with the institution as the poor communication limits the communication of the most relevant aspects of the organization. Weakness in the communication presents a big as the relationship between employees and the organization becomes tainted with mistrust.
Weakness in SWOT analysis depicts the organization goes through from the production process, the channels used for the delivery of the products to the consumers and the feedback obtained on the nature of the products of the consumer. ABInBev is a global power as far as a beverage is concerned. The management systems of the company are vast, and the effective control of the dynamics that influence the efficacy of the elements in coordination is often challenging. Control of the most valuable resources stretching from the human resources and the coordination of the monetary value and assets is challenging for the corporation (Roberts, 2014). ABInBev constant acquisition excursions increased the difficulties in the management with each instance of such a process. The recent acquisition of SABMiller put a significant stretch in the leadership of the organization, as it has become a huge global corporation.
The distribution of ABInBev represents one of the effective ways of distribution of products judging from the financial report on the profits made. Technological advancement in the distribution of such products renders the current channels used redundantly. The company is becoming less receptive to new ideologies. The trait is one of the profound elements that have put many global organizations out of business (Esser & Jernigan, 2018). Weakness in the reaction to the trends in any aspect of the business of a corporation affects the delivery of such services at a tremendous. Reacting notably in the current business spectrum is an essential element for any realization of success in any business regardless of its market share. Penetrating new markets likes Africa after the acquisition of SABMiller requires all hands on creating a resolution of the organizational challenges to avoid the chances of failure in the wake of profound investment.
Opportunities
Opportunity is an example of an external environment that affects the functionality of a business to a significant degree. Chances are on occasion out of the control of a business. In the case of ABInBev, the creation of opportunities has been their greatest characteristics for success. The acquisition of SABMiller acted as a strategic penetration of the African market for the company. Africa represents one of the fastest growing regions of the world will some countries achieve a growth rate of more than 10 percent (Colquitt & Dowsett, 2017). The positioning of the company as a global choice in matters beer gives it the opportunity to venture into a market that has no current dominant products. The opportunities in the African market are profound as the continent represents a multifaceted society. In this effect, the array of products offered by the company would the diverse market needs.
Opportunities in Africa are immense considering the cultural significance of beer and other alcoholic beverages to the majority of the communities in the continent. Application of the most advanced technologies in the production plants in the continent will act as a strategy towards the implementation of the most advanced technologies that reduced the work input in the production process (Richardson, Marsh & Graefe-Anderson, 2017). Retooling facilities are a great swoop for the traditional mechanisms involved in the distribution of goods. The established infrastructure that acts as the strength of the company can be used to foster the transition processes into capable technologies that will improve the output at the same time being cost effective.
Alcohol business is a massive investment option especially when you are the most significant producer and distributor across the globe for years. ABInBev with the muscle of their facilities and resources can efficiently implement a venture into other lines of the beverage business, for example, soft drinks. Venturing into African market entails the implementation of numerous details close to the hearts of many people of the continent (Bier et al., 2018). The continent is of conservative nature with many communities strong on their cultural backgrounds. Therefore, the creation of a product that resonates with people who do not drink alcoholic beverage will act as a game changer.
Threats
With the success of any business entails numerous challenges and threats to the resources of the business. Anti-trust laws in the United States and Europe has stringent measure and regulations when it comes to dealing with big corporations like ABInBev. Having control of more than 50 percent of the alcoholic market is the United States is a scary thing to the authorities as matters of monopoly start to arise (Morris, 2016). Prevention of anti-trust laws represents some of the most critical elements that need to be considered in the daily operations of organizations like ABInBev. ABInBev has on continuous basis run into the jaws of the justice system concerning the anti-trust laws.
Suppliers of the corporation have raised some issues concerning the productivity of some of the products of the organization. They claim that the corporation is overproducing some product that other (Vaheesan, 2014). The situation is acceptable as per the market dynamics of people and their preference for some products than others. Overproduction to the extreme degree is a threat to the long-term sustainability of the customers’ preference and adventure in the choosing from variety. Reduced demand for the older products indicates the need for diversification of the products to cater for the younger generation (Thornton & Hawkins, 2017). The threats to the preference of the products that established the corporation to the globe cause tremors to the management as consumer satisfaction communicates one of their strategic procedure for the growth of the company.
ABInBev regulations that manage the production of the numerous products under their belt inflict harm to the smaller brands notably from the companies they acquire. Such regulations affect the perception of people to the corporation and negative reputation, as a result, might be damming even to the great products. Satisfaction of the needs of customers is relevant if such new markets might want to try other new products from the same institution (Horton, 2016). Lawsuits levels against the operations of the company have a detrimental effect on the decision-making process of the institution. Such lawsuits impact on the flexibility of the institution causing it to bleed as it spends a lot of resources trying to vindicate from such entanglement.
Conclusion
The inquisition into the SWOT analysis of ABInBev has provided significant information on the state of the organization. The study depicts the strength of ABInBev in its facilities, acquisition power, and quality of the products they provide. The strengths focus on what makes the organization unique and the drivers of success are reinforced in the value chain analysis. The corporate history depicted the direct application of the strengths of the organization throughout the existence of the institution. The weaknesses detail the loopholes that disadvantage the organization. The weakness points out the inability of the organization to adapt to the modern technologies applied in the distribution of resources. Adoption of technology especially since the internet age has proved to be a relevant business strategy in the rapid development of a business.
Opportunities indicate some of the possible chances that the organization can implement to improve the operation of the institution and the revenues generated. The constant merger conducted by the business increases the opportunities for the corporation if well utilized. The probability of success increase in folds if the opportunity is seized at the right moment. Africa presents an opportunity for the expansion of the products of ABInBev. Threats to the success of ABInBev include the regulations concocted by different organizations. The anti-trust laws in the United States stand as a formidable threat to the reputation and ultimately the success of ABInBev. The information relayed above depicts the journey of an organization that has transcended time to become a global player in Brewery Company. The value chain of an organization depicts the mission and vision of an organization and the activities involved in the achievement of the stipulated goals.
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