Sabmiller

SABMilier

Aidan McQuade

South African Breweries grew on the basis of its strength in developing markets, first in Africa and then in other parts of the world. Following pressure from investors to acquire a brewery in a developed market it acquired Miller in 2002 to become SABMiller and the second largest brewer by volume in the world. This case study explains the business's development. It shows how the strategy has changed with time and circumstances and provides the opportunity to consider its future at both the corporate and competitive strategy levels.

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Introduction

In 2007 SABMiller, the renamed South African Breweries following its acquisition of the American brewer Miller in 2002, had become the second largest brewer by volume in the world. It still vied with Anheuser- Busch. its principal competitor; having dropped back to third place in 2005 it reclaimed the number two position following its conclusion of a US$7.8bn (~6.2bn) deal to take over Grupo Empresarial Bavaira, South America's second largest brewer. In the 2006 annual report SABMiller outlined four strategic priorities upon which its success depended: 'Creating a balanced and attractive global spread of businesses .... Developing strong relevant brand portfolios in the relevant market .... Constantly raising the performance of the local businesses . . . . Leveraging our global scale.' This statement of strategy may be seen as a synthesis of the learning the company has developed over its history, first weathering the political crises of twentieth-century South African history, then building its operations in emerging and mature markets, where its

expertise as .a turnaround specialist'l was further consolidated.

Background

As a company SABMiller is older than the state of South Africa itself and has faced the challenge of doing business amidst the upheaval that country experienced during the twentieth century. The most significant feature of this was the institution of the...