Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry
An unprecedented bidding war for the Chinese fourth-largest beer maker, Haerbin Brewery, broke out between the world top two breweries--Anheuser-Busch and SABMiller. Presents the different strategies these companies adopted to enter Chinese market. Anheuser-Busch entered the Chinese market with its nearly fully owned subsidiary and promoted its own brand, Budweiser, whereas SABMiller knocked through the market with its joint venture with CRE. Its expansion in China came mostly through mergers--it did not introduce into the market its own world-famous brand. Anheuser-Busch, on the other hand, went down the acquisition road, first with Tsingtao and then with the Haerbin brewery.
Swot Analysis of "Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry" written by Zhigang Tao, Li Dongya includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Busch Anheuser facing as an external strategic factors. Some of the topics covered in Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry case study are - Strategic Management Strategies, Growth strategy, Joint ventures, Market research, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry casestudy better are - – supply chains are disrupted by pandemic , increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies,
geopolitical disruptions, increasing energy prices, etc
Introduction to SWOT Analysis of Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Busch Anheuser, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Busch Anheuser operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry can be done for the following purposes –
1. Strategic planning using facts provided in Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry case study
2. Improving business portfolio management of Busch Anheuser
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Busch Anheuser
Strengths Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Busch Anheuser in Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry Harvard Business Review case study are -
Successful track record of launching new products
– Busch Anheuser has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Busch Anheuser has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Highly skilled collaborators
– Busch Anheuser has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Busch Anheuser is one of the most innovative firm in sector. Manager in Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Busch Anheuser are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to lead change in Strategy & Execution field
– Busch Anheuser is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Busch Anheuser in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Busch Anheuser has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Low bargaining power of suppliers
– Suppliers of Busch Anheuser in the sector have low bargaining power. Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Busch Anheuser to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Strategy & Execution industry
– Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry firm has clearly differentiated products in the market place. This has enabled Busch Anheuser to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Busch Anheuser to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Busch Anheuser in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Busch Anheuser digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Busch Anheuser has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Analytics focus
– Busch Anheuser is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Zhigang Tao, Li Dongya can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management
– Busch Anheuser is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry are -
Need for greater diversity
– Busch Anheuser has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Busch Anheuser 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Busch Anheuser has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry, it seems that the employees of Busch Anheuser don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Increasing silos among functional specialists
– The organizational structure of Busch Anheuser is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Busch Anheuser needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Busch Anheuser to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Capital Spending Reduction
– Even during the low interest decade, Busch Anheuser has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High bargaining power of channel partners
– Because of the regulatory requirements, Zhigang Tao, Li Dongya suggests that, Busch Anheuser is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry, in the dynamic environment Busch Anheuser has struggled to respond to the nimble upstart competition. Busch Anheuser has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry, is just above the industry average. Busch Anheuser needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Products dominated business model
– Even though Busch Anheuser has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry should strive to include more intangible value offerings along with its core products and services.
Opportunities Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry are -
Using analytics as competitive advantage
– Busch Anheuser has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Busch Anheuser to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Busch Anheuser in the consumer business. Now Busch Anheuser can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Busch Anheuser to increase its market reach. Busch Anheuser will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Busch Anheuser to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Busch Anheuser to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Busch Anheuser is facing challenges because of the dominance of functional experts in the organization. Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Busch Anheuser can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Busch Anheuser can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Busch Anheuser can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Busch Anheuser in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Busch Anheuser can use these opportunities to build new business models that can help the communities that Busch Anheuser operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Busch Anheuser can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Busch Anheuser can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Busch Anheuser can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Busch Anheuser can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Threats Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry are -
High dependence on third party suppliers
– Busch Anheuser high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Busch Anheuser.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Busch Anheuser in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Consumer confidence and its impact on Busch Anheuser demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Busch Anheuser has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Busch Anheuser needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry, Busch Anheuser may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Busch Anheuser in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Busch Anheuser needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Busch Anheuser can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Busch Anheuser can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry .
Environmental challenges
– Busch Anheuser needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Busch Anheuser can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing wage structure of Busch Anheuser
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Busch Anheuser.
Weighted SWOT Analysis of Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Anheuser-Busch Versus SABMiller: Bidding War in China's Beer Industry is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Busch Anheuser needs to make to build a sustainable competitive advantage.