Strategic Management Case Study of SABMiller Example | Topics and Well Written Essays - 1500 words

Strategic Management of SABMiller - Case Study Example This development is similar to that proposed by Johnson et al (pp. 240, 2006). As bases of competition, SABMILLER had a strategy positioning on four fronts. It considered maintaining a price and differentiation strategy, with particular focus on markets in developing economies. In doing so, its combination of price and differentiation strategy justified its hybrid strategy. Here a hybrid strategy refers to the act of simultaneously achieving product differentiation and low pricing than competitors. The success of such a strategy depended on SABMILLER's ability to deliver enhanced benefits to customers together with low prices while achieving sufficient margins for reinvestment to maintain and develop the bases of differentiation. Secondly, to achieve competitive advantage as a strategy positioning SABMILLER opted to sustain operations in the markets it already controlled, while maintaining hypercompetition such that the frequency, boldness and aggressiveness of dynamic moves accelerated to create a condition of constant disequilibrium. At the same time, the company embarked on redefining collaboration which took the dimension of taking over other companies in the same line of business. Apart from this, one of the most vital issues to shape its positioning strategy was its involvement in game theory wherein every competitor contrived to get the best possible strategic solution for themselves given the response from each other. Thirdly, under detailed choices SABMILLER determined its positioning strategy by defining its mode of growth. From information read in the case, the company's decision to be listed on the London Stock Exchange was strategically backed by the motif to raise more capital for expansion. In the light of this, the company made a number of moves to merge or take over other companies. b) The strategic priorities for SABMILLER at the time of the case were basically centred on growth. This growth was to phased and comprised organic growth and physical growth. Organic growth refers to growth that would come as a result of reinvesting its excess profits back in the business to increase production capacity or expand into new markets. Such a move had significant stimulus from the statistics that the world's five major breweries could more or less account for just 30% of global demand. This therefore steered the move to expand production capacity and enter unexploited markets in developing economies. Meanwhile, physical growth refers to growth that ought to come as a result of harnessing more capital to expand. So, moves like listing itself on the London Stock Exchange to raise more capital come to justify the fulfillment of SABMILLER's strategic priorities. This was the only logical step if the decision to expand into foreign markets had to be a realised strategy. 2) The company's core competencies were seen to be the activities and processes through which resources (in/tangible and non/physical assets) are deployed in such a way as to achieve competitive advantage in ways as to achieve competitive advantage much to the illusion of competitors. A summary tool to identify these capabilities and resources is as shown below: Threshold capabilities are those essential for an organisation to be able to compete in a given market (Johnson et al, 2006). The strength of these capabilities