Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Report 1: Strategy Formulation David Arraya, Kevin Gardner, Trenton Jackson, Brad Orr Anheuser-Busch ◦ Beer Budweiser Busch Michelob Natural Light ◦ Non-Alcoholic Beer ◦ Energy Drinks ◦ Specialty Malt Beverages ◦ Domestic beer, International beer, packaging, and entertainment markets ◦ Largest brewery in the U.S. (48.8% of beer sales) ◦ 4th largest brewery in the world The Chinese Beer Industry ◦ Dominant Firm’s Tsingtao China Resource Enterprises Beijing Yanjing Group ◦ Key’s to Success Gaining vast market share Establishing presence with brand name and low prices VISION • Through all over our products, services and relationships, we will add to life’s enjoyment MISSION • Be the world’s beer company • Enrich and entertain a global audience • Deliver superior returns to our shareholders External Environment ◦ Economic Huge population Low per capita beer consumption Highest beer volume consumption in the world Rising income levels ◦ Social “Pub” culture emerging Price conscious consumer ◦ Political Bureaucratic government Beer taxed heavily ◦ Technological Old, out-of-date beer manufacturing plants ◦ Ecological Pollution and waste a growing concern in China Focus on employees State objective of how they intent on becoming the best beer company in the world Reflect corporate social responsibility Value-Chain Analysis (Market) Problem is market, not businesses ◦ Large, fragmented, and traditional In order to gain a competitive advantage, the businesses must focus on Primary Activities ◦ ◦ ◦ ◦ Inbound Logistics Outbound Logistics Marketing and Sales Service Resources Tangible Assets Production facilities Harbin Brewery Established suppliers Financial resources Intangible Assets Brand recognition Company reputation Accumulated experience Organizational Capabilities Global distribution coordination - World-class distribution network Strengths Access to capital Brand recognition Acquisition of Harbin Brewery and interests in Tsingtao Experienced and solid management team Weaknesses Foreign competitor Taste for local brands Large investment Competitive Advantage Leadership in Northwest China (Harbin) Creation of large production facilities Present Ranking #1 Threat #2 Threat #3 Threat #4 Threat #5 Threat Force Substitute Products Threat of Entry Rivalry Among Competitors Buyers Suppliers Threat Level High High Moderate Low Low Future Ranking #1 Threat #2 Threat #3 Threat #4 Threat #5 Threat Force Rivalry Among Competitors Buyers Substitute Products Threat of Entry Suppliers Threat Level High Moderate Moderate Low Low Ranking #1 #2 #3 Company Name Tsingtao China Resource Enterprises Beijing Yanjing Group Competitive Advantage Market Consolidation Low-cost Leader Advanced Distribution Used financial statements and ratio analysis to compare Anheuser Busch’s past years and the competitive market Increase in sales from 2075.9 million to 2115.3 million dollars from 2003 to 2007, which is above the industry average Profitability Gross Margin % Net Profit Margin % Sales % (vs year ago qtr) Return on Equity % Boston Beer Coors Brewing Anheuser Busch Industry 54.9 5.6 40.2 8.6 35.1 8.7 51.4 11.7 10.9 15.5 4.5 7.9 7.9 59.7 7 28.1 3 16.2 1 8.6 0.9 21.9 1 18.4 1.4 1.9 5.4 3.1 8.4 10.7 15.3 9.3 Liquidity Current Ratio Receivable Turnover Leverage Leverage Ratio Activity Inventory Turnover Market Fragmentation ◦ 500-1000 brewing firms in China ◦ No dominant leader in the market Symptoms from Core Issue ◦ Price wars ◦ Decreased profits ◦ Buyer power “Harbin brewery is committed to increasing its market share in Northeast China, becoming the dominate market share holder within the next 10 years” Major Premises Acquisition of competition will create “trench warfare” between regional powerhouses Foreign Investment will continue Scenarios Best Case - Harbin will become dominate market player Worst Case - Harbin will be bought by another powerhouse Most Likely Case Harbin will grow by 10% and remain the 4th largest brewer in China Continued acquisition of companies in China to gain market share Offer lower cost products to compete with the largest segment of beer drinkers. Build CSR SBUs Budweiser Family of Beers Beers Harbin Premium GENERIC STRATEGY Low-Cost Leadership ◦ Need to penetrate traditional market ◦ Want to get the product in the minds of the consumer GRAND STRATEGIES ◦ Market development - Bring Harbin to the rest of China ◦ Innovation - mainly through advertising ◦ Horizontal integration - acquisition of smaller breweries Growth through horizontal integration ◦ Very feasible ◦ Will allow Anheuser-Busch to establish presence in other regions of China ◦ Anheuser-Busch has the financial capital to carry out this option ◦ Will increase market share Thank You and Remember to Drink Responsibly