BIG BEER: INBEV VS. ANHEUSER BUSCH SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of BIG BEER: INBEV VS. ANHEUSER BUSCH
This merger case puts face to face a team of negotiators representing InBev and another representing Anheuser Busch (AB). These teams have to negotiate on a potential acquisition of AB. Therefore, this case is much broader than just an exercise in valuation or finance. Learning objectives: This case will challenge participants on negotiation techniques, strategic analysis, working with a team, working "against" a team, present a deal in public and many other things.
Swot Analysis of "BIG BEER: INBEV VS. ANHEUSER BUSCH" written by Nuno Fernandes, Patricia Santos 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 BIG BEER: INBEV VS. ANHEUSER BUSCH case study are - Strategic Management Strategies, Marketing, Mergers & acquisitions and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the BIG BEER: INBEV VS. ANHEUSER BUSCH casestudy better are - – increasing energy prices, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%,
challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of BIG BEER: INBEV VS. ANHEUSER BUSCH
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in BIG BEER: INBEV VS. ANHEUSER BUSCH 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 BIG BEER: INBEV VS. ANHEUSER BUSCH can be done for the following purposes –
1. Strategic planning using facts provided in BIG BEER: INBEV VS. ANHEUSER BUSCH case study
2. Improving business portfolio management of Busch Anheuser
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Busch Anheuser
Strengths BIG BEER: INBEV VS. ANHEUSER BUSCH | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Busch Anheuser in BIG BEER: INBEV VS. ANHEUSER BUSCH Harvard Business Review case study are -
High brand equity
– Busch Anheuser has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Busch Anheuser to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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 BIG BEER: INBEV VS. ANHEUSER BUSCH - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Leadership & Managing People 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.
Ability to recruit top talent
– Busch Anheuser is one of the leading recruiters in the industry. Managers in the BIG BEER: INBEV VS. ANHEUSER BUSCH are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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 BIG BEER: INBEV VS. ANHEUSER BUSCH Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Leadership & Managing People 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 BIG BEER: INBEV VS. ANHEUSER BUSCH 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.
Low bargaining power of suppliers
– Suppliers of Busch Anheuser in the sector have low bargaining power. BIG BEER: INBEV VS. ANHEUSER BUSCH 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.
Operational resilience
– The operational resilience strategy in the BIG BEER: INBEV VS. ANHEUSER BUSCH 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.
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 Nuno Fernandes, Patricia Santos 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 BIG BEER: INBEV VS. ANHEUSER BUSCH | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BIG BEER: INBEV VS. ANHEUSER BUSCH are -
High cash cycle compare to competitors
Busch Anheuser has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 Leadership & Managing People 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.
Slow decision making process
– As mentioned earlier in the report, Busch Anheuser has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Busch Anheuser even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
Aligning sales with marketing
– It come across in the case study BIG BEER: INBEV VS. ANHEUSER BUSCH 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 BIG BEER: INBEV VS. ANHEUSER BUSCH can leverage the sales team experience to cultivate customer relationships as Busch Anheuser is planning to shift buying processes online.
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.
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 - BIG BEER: INBEV VS. ANHEUSER BUSCH should strive to include more intangible value offerings along with its core products and services.
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 - BIG BEER: INBEV VS. ANHEUSER BUSCH, 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.
No frontier risks strategy
– After analyzing the HBR case study BIG BEER: INBEV VS. ANHEUSER BUSCH, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study BIG BEER: INBEV VS. ANHEUSER BUSCH, 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Nuno Fernandes, Patricia Santos 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.
Opportunities BIG BEER: INBEV VS. ANHEUSER BUSCH | 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 BIG BEER: INBEV VS. ANHEUSER BUSCH are -
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.
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.
Manufacturing automation
– Busch Anheuser can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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.
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.
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 Leadership & Managing People segment.
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.
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.
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 BIG BEER: INBEV VS. ANHEUSER BUSCH case study. Busch Anheuser can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Leadership & Managing People segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People 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.
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 BIG BEER: INBEV VS. ANHEUSER BUSCH - 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 BIG BEER: INBEV VS. ANHEUSER BUSCH External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study BIG BEER: INBEV VS. ANHEUSER BUSCH 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 Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Leadership & Managing People industry. The Leadership & Managing People 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.
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.
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.
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.
Easy access to finance
– Easy access to finance in Leadership & Managing People 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.
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 Leadership & Managing People industry regulations.
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.
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 BIG BEER: INBEV VS. ANHEUSER BUSCH .
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.
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 Leadership & Managing People sector and impact the bottomline of the organization.
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 Leadership & Managing People industry. This will help it in building a better workplace.
Weighted SWOT Analysis of BIG BEER: INBEV VS. ANHEUSER BUSCH 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 BIG BEER: INBEV VS. ANHEUSER BUSCH 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 BIG BEER: INBEV VS. ANHEUSER BUSCH 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 BIG BEER: INBEV VS. ANHEUSER BUSCH 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 BIG BEER: INBEV VS. ANHEUSER BUSCH 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.
