Anheuser-Busch and the U.S. Brewing Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Anheuser-Busch and the U.S. Brewing Industry
Presents an analytical report on the company's competitive position and on the industry structure in 1991. Used to show how a company can generate value through steady, incremental investment over a long period in a business model tailored to the industry context. Also illustrates the challenges of market leadership.
Swot Analysis of "Anheuser-Busch and the U.S. Brewing Industry" written by Anita M. McGahan 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 and the U.S. Brewing Industry case study are - Strategic Management Strategies, Organizational structure and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Anheuser-Busch and the U.S. Brewing Industry casestudy better are - – central banks are concerned over increasing inflation, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings,
cloud computing is disrupting traditional business models, technology disruption, etc
Introduction to SWOT Analysis of Anheuser-Busch and the U.S. Brewing Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Anheuser-Busch and the U.S. Brewing 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 and the U.S. Brewing Industry can be done for the following purposes –
1. Strategic planning using facts provided in Anheuser-Busch and the U.S. Brewing 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 and the U.S. Brewing Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Busch Anheuser in Anheuser-Busch and the U.S. Brewing Industry Harvard Business Review case study are -
Organizational Resilience of Busch Anheuser
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Busch Anheuser does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Operational resilience
– The operational resilience strategy in the Anheuser-Busch and the U.S. Brewing Industry Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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 and the U.S. Brewing Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Busch Anheuser is present in almost all the verticals within the industry. This has provided firm in Anheuser-Busch and the U.S. Brewing Industry case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
Training and development
– Busch Anheuser has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Anheuser-Busch and the U.S. Brewing Industry Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Effective Research and Development (R&D)
– Busch Anheuser has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Anheuser-Busch and the U.S. Brewing Industry - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Busch Anheuser is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Busch Anheuser is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Anheuser-Busch and the U.S. Brewing Industry Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Low bargaining power of suppliers
– Suppliers of Busch Anheuser in the sector have low bargaining power. Anheuser-Busch and the U.S. Brewing 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 and the U.S. Brewing 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.
Weaknesses Anheuser-Busch and the U.S. Brewing Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Anheuser-Busch and the U.S. Brewing Industry are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Anheuser-Busch and the U.S. Brewing 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.
Lack of clear differentiation of Busch Anheuser products
– To increase the profitability and margins on the products, Busch Anheuser needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Anheuser-Busch and the U.S. Brewing 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.
Aligning sales with marketing
– It come across in the case study Anheuser-Busch and the U.S. Brewing Industry that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Anheuser-Busch and the U.S. Brewing Industry can leverage the sales team experience to cultivate customer relationships as Busch Anheuser is planning to shift buying processes online.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Busch Anheuser supply chain. Even after few cautionary changes mentioned in the HBR case study - Anheuser-Busch and the U.S. Brewing Industry, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Busch Anheuser vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Anita M. McGahan 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 and the U.S. Brewing 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.
Slow to strategic competitive environment developments
– As Anheuser-Busch and the U.S. Brewing Industry HBR case study mentions - Busch Anheuser takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Anheuser-Busch and the U.S. Brewing Industry HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Busch Anheuser has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Busch Anheuser needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities Anheuser-Busch and the U.S. Brewing 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 and the U.S. Brewing Industry are -
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.
Leveraging digital technologies
– Busch Anheuser can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
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.
Loyalty marketing
– Busch Anheuser has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Busch Anheuser to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Low interest rates
– Even though inflation is raising its head in most developed economies, Busch Anheuser can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Building a culture of innovation
– managers at Busch Anheuser can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
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.
Creating value in data economy
– The success of analytics program of Busch Anheuser has opened avenues for new revenue streams for the organization in the industry. This can help Busch Anheuser to build a more holistic ecosystem as suggested in the Anheuser-Busch and the U.S. Brewing Industry case study. Busch Anheuser can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Busch Anheuser to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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 and the U.S. Brewing 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.
Threats Anheuser-Busch and the U.S. Brewing 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 and the U.S. Brewing Industry are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Busch Anheuser with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Busch Anheuser is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Busch Anheuser needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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.
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Busch Anheuser will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
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 and the U.S. Brewing Industry .
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.
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.
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 and the U.S. Brewing 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 .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of Anheuser-Busch and the U.S. Brewing 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 and the U.S. Brewing 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 and the U.S. Brewing 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 and the U.S. Brewing 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 and the U.S. Brewing 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.