anheuser-busch: strategy for continued success prepared by: jeremy snow and adam zubke may 14, 2012
TRANSCRIPT
Anheuser-Busch: Strategy for Continued
Success
Prepared by: Jeremy Snow and Adam Zubke
May 14, 2012
History• Originally founded as The Bavarian Brewery, 1852 in St. Louis• Purchased by Eberhard Anheuser, 1860• Adolphus Busch (son-in-law) joined company, 1864• Original Budweiser created, 1876 – very popular, led to rapid
growth• Company renamed Anheuser-Busch, 1919• Sold yeast, refrigeration units, truck bodies, etc. during Prohibition,
1920’s & 30’s• After Prohibition a case of Budweiser was delivered to Franklin
Roosevelt by Clydesdale horses, 1933
History Cont.• Owned St. Louis Cardinals baseball team, 1953-1996• Became #1 U.S. brewer, 1957• Busch Entertainment Theme Park division, 1959-2009• Participated in snack food business, 1980’s-1996• Introduced Budweiser into England and Japan through licensing,
1984• Increased holding in GRUPO MODELO (Corona, Negra Modela) to
50%, 1998 – focus on specialty beer sector• Formed 50/50 joint venture in India, 2007
Acquisition• Acquired by InBev (company formed by 2004 merger of Belgian
and Brazilian brewing companies) for $52 billion, 2008• Created world’s largest brewer, Anheuser-Busch InBev (AB InBev)• One of world’s top 5 consumer products companies• Paying down debt from acquisition
– Sold part of metal container business
– Sold Busch Entertainment division
– Job cuts in U.S., mainly at Anheuser-Busch HQ in St. Louis
Directional Strategies•Mission: Winning with Consumers through Our Strong Brand
Portfolio– Create enduring bonds– Sales and merchandising capabilities, preferred supplier partnerships with
customers, consistently building equity of brands
• Vision: Winning at the Point of Connection– Volume growth in excess of market growth• Brand strength• Continued premiumization of brand portfolio• Sales and marketing investment
Directional Strategies Cont.• Values:– Open innovation policy on all levels– Strong company culture, investing in people and maintaining a strong target-
related compensation structure– Best-in-class financial discipline spread throughout the whole organization
• Goal: Targeted External Growth– Selected acquisitions– Repeatedly demonstrate ability to successfully integrate acquisitions and
drive revenue growth
External Environment - General
•Global Segment
•Sociocultural Segment
External Environment – Industry Specific
•Political/Legal Segment
•Competitive Segment
Service Area• Primary service area: United States– 29% of global volume, 2011– 42.6% of normalized EBITDA, North American region 2011– AB InBev holds 47.7% market share in U.S., #1
• Primary target demographic– Between ages of 21-65– 183,371,540 people in U.S. within target range, 2010 Census
• Brand groups– Global brands: Budweiser, Stella Artois, Beck’s– Local champions: Bud Light, Michelob Ultra– Craft beers, specialty malt beverages, energy drinks, waters
Competitor Analysis• Three major players– AB InBev– SAB Miller– Molson Coors
• SAB Miller– 6 of top 50 beers in the world– Wide geographic reach– Relatively low U.S. market share– Limited liquidity position
• Molson Coors– 5th largest brewer by volume– Most revenue comes from U.S. and Canada– Formed joint venture with SAB Miller in 2007 (MillerCoors / Miller Brewing Company)
direct attempt to compete better against AB InBev
Internal Environment• Strengths–Market leader in volume and revenue– Brand recognition– Commitment to community outreach and green practices– Proven history of successful growth
•Weaknesses– Dependence on retailers and wholesalers– Large debt holdings due to various expansion activities
• Opportunities– Emerging market opportunities
• Threats– Price and availability of raw materials
Adaptive Strategy•Market development – introduction of AB InBev products into Chinese
market• Portfolio diversification – acquisition of Chinese brewing company
• BCG Portfolio Analysis
• Product Life Cycle
Market Entry Strategy• Licensing/internal venture – offer global AB InBev brands in Chinese
market• Acquisition – purchase of established Chinese brewer as addition to
brand portfolio
•Why?
Strategic Posture• Traditional markets (U.S. and Europe) – defender strategy– Enhance brand value– Identify and successfully serve niche markets
• Acquired Fulton Street Brewery/Goose Island, Midwest craft brewer, 2011
• Emerging markets – prospector strategy– Growth trend exclusively in emerging markets– Successful record of entering new markets
Strategic Position• Differentiation– “Continued premiumization of brand portfolio”– Ad campaigns and sponsorships– History and tradition of ‘premium’ status– 14 brands have reached ‘billion dollar brand’ status
• Focused position based on differentiation– craft beer and specialty segments increasing in popularity and variety– Focused on staying ahead of market trends
Questions?