SWOT Analysis / TOWS Matrix for Anheuser Busch Inbev (Italy)
Based on various researches at Oak Spring University , Anheuser Busch Inbev is operating in a macro-environment that has been destablized by – geopolitical disruptions, increasing commodity prices, there is backlash against globalization, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy,
central banks are concerned over increasing inflation, wage bills are increasing, etc
Introduction to SWOT Analysis of Anheuser Busch Inbev
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Anheuser Busch Inbev can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Anheuser Busch Inbev, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Anheuser Busch Inbev 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 Inbev can be done for the following purposes –
1. Strategic planning of Anheuser Busch Inbev
2. Improving business portfolio management of Anheuser Busch Inbev
3. Assessing feasibility of the new initiative in Italy
4. Making a Beverages (Alcoholic) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Anheuser Busch Inbev
Strengths of Anheuser Busch Inbev | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Anheuser Busch Inbev are -
Ability to lead change in Beverages (Alcoholic)
– Anheuser Busch Inbev is one of the leading players in the Beverages (Alcoholic) industry in Italy. Over the years it has not only transformed the business landscape in the Beverages (Alcoholic) industry in Italy but also across the existing markets. The ability to lead change has enabled Anheuser Busch Inbev in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Anheuser Busch Inbev has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Beverages (Alcoholic) industry. Secondly the value chain collaborators of Anheuser Busch Inbev have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Anheuser Busch Inbev has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Anheuser Busch Inbev staying ahead in the Beverages (Alcoholic) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Anheuser Busch Inbev 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.
Superior customer experience
– The customer experience strategy of Anheuser Busch Inbev in Beverages (Alcoholic) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Anheuser Busch Inbev has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Anheuser Busch Inbev 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.
Sustainable margins compare to other players in Beverages (Alcoholic) industry
– Anheuser Busch Inbev has clearly differentiated products in the market place. This has enabled Anheuser Busch Inbev to fetch slight price premium compare to the competitors in the Beverages (Alcoholic) industry. The sustainable margins have also helped Anheuser Busch Inbev to invest into research and development (R&D) and innovation.
Digital Transformation in Beverages (Alcoholic) industry
- digital transformation varies from industry to industry. For Anheuser Busch Inbev digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Anheuser Busch Inbev 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.
High brand equity
– Anheuser Busch Inbev has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Anheuser Busch Inbev to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Anheuser Busch Inbev 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 Anheuser Busch Inbev is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Anheuser Busch Inbev emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Anheuser Busch Inbev 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.
Organizational Resilience of Anheuser Busch Inbev
– The covid-19 pandemic has put organizational resilience at the centre of everthing Anheuser Busch Inbev does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Anheuser Busch Inbev | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Anheuser Busch Inbev are -
High bargaining power of channel partners in Beverages (Alcoholic) industry
– because of the regulatory requirements in Italy, Anheuser Busch Inbev 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 Beverages (Alcoholic) industry.
Need for greater diversity
– Anheuser Busch Inbev 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.
Lack of clear differentiation of Anheuser Busch Inbev products
– To increase the profitability and margins on the products, Anheuser Busch Inbev needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Anheuser Busch Inbev 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 Beverages (Alcoholic) industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative at Anheuser Busch Inbev, in the dynamic environment of Beverages (Alcoholic) industry it has struggled to respond to the nimble upstart competition. Anheuser Busch Inbev has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Anheuser Busch Inbev has some of the most successful models in the Beverages (Alcoholic) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Anheuser Busch Inbev 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 Anheuser Busch Inbev supply chain. Even after few cautionary changes, Anheuser Busch Inbev is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Anheuser Busch Inbev vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Italy, Anheuser Busch Inbev needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ less understanding of Anheuser Busch Inbev strategy
– From the outside it seems that the employees of Anheuser Busch Inbev 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.
Skills based hiring in Beverages (Alcoholic) industry
– The stress on hiring functional specialists at Anheuser Busch Inbev 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Anheuser Busch Inbev is slow explore the new channels of communication. These new channels of communication can help Anheuser Busch Inbev to provide better information regarding Beverages (Alcoholic) products and services. It can also build an online community to further reach out to potential customers.
Anheuser Busch Inbev Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Anheuser Busch Inbev are -
Using analytics as competitive advantage
– Anheuser Busch Inbev has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Beverages (Alcoholic) sector. This continuous investment in analytics has enabled Anheuser Busch Inbev to build a competitive advantage using analytics. The analytics driven competitive advantage can help Anheuser Busch Inbev to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Anheuser Busch Inbev to increase its market reach. Anheuser Busch Inbev 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.
Manufacturing automation
– Anheuser Busch Inbev can use the latest technology developments to improve its manufacturing and designing process in Beverages (Alcoholic) sector. 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.
Building a culture of innovation
– managers at Anheuser Busch Inbev 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 Beverages (Alcoholic) industry.
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 Anheuser Busch Inbev 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.
Leveraging digital technologies
– Anheuser Busch Inbev 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.
Developing new processes and practices
– Anheuser Busch Inbev can develop new processes and procedures in Beverages (Alcoholic) 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Beverages (Alcoholic) industry, but it has also influenced the consumer preferences. Anheuser Busch Inbev 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, Anheuser Busch Inbev 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 Anheuser Busch Inbev to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Anheuser Busch Inbev 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Anheuser Busch Inbev can use these opportunities to build new business models that can help the communities that Anheuser Busch Inbev operates in. Secondly it can use opportunities from government spending in Beverages (Alcoholic) sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Anheuser Busch Inbev 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 Anheuser Busch Inbev to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Anheuser Busch Inbev has opened avenues for new revenue streams for the organization in Beverages (Alcoholic) industry. This can help Anheuser Busch Inbev to build a more holistic ecosystem for Anheuser Busch Inbev products in the Beverages (Alcoholic) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Anheuser Busch Inbev External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Anheuser Busch Inbev are -
Shortening product life cycle
– it is one of the major threat that Anheuser Busch Inbev is facing in Beverages (Alcoholic) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Environmental challenges
– Anheuser Busch Inbev 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. Anheuser Busch Inbev can take advantage of this fund but it will also bring new competitors in the Beverages (Alcoholic) industry.
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 Anheuser Busch Inbev in the Beverages (Alcoholic) sector and impact the bottomline of the organization.
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.
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 Anheuser Busch Inbev.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Anheuser Busch Inbev may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Beverages (Alcoholic) sector.
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. Anheuser Busch Inbev needs to understand the core reasons impacting the Beverages (Alcoholic) industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Anheuser Busch Inbev in Beverages (Alcoholic) industry. The Beverages (Alcoholic) 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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Anheuser Busch Inbev business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Anheuser Busch Inbev
– 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 Anheuser Busch Inbev.
High dependence on third party suppliers
– Anheuser Busch Inbev 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.
Easy access to finance
– Easy access to finance in Beverages (Alcoholic) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Anheuser Busch Inbev can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Anheuser Busch Inbev Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Anheuser Busch Inbev 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 Anheuser Busch Inbev 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 Anheuser Busch Inbev 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 Inbev 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 Anheuser Busch Inbev needs to make to build a sustainable competitive advantage.