Anheuser-Busch InBev Company Profile AB InBev is the result of the merging of Interbrew, from Belgium, with AmBev, from South America, and later with Anheuser-Busch from the US in 2008. Ab InBev is the world’s largest brewer, with approximately 459 million hectoliters of beer sold in 2014. With the group’s ties to the Americas it is no surprise that the majority of the volume of beer sold by AB InBev was sold in North and South America. AB InBev breaks up the Americas into three groups: North America, Latin America North, and Latin America South. Over 70% of the groups volume of beer sold is done so in the Americas, with 34.9% of its volume in North America, 27.3% in Latin America North, and 8% in Latin America South. The revenue generated by these regions also contributes the majority to the group’s total revenue, with 48.6% of revenue coming from North America, 31% from Latin America North, and 7.3% from Latin America South (AB InBev Annual Report) It is difficult to apply one of the generic strategies to a company as large and complex as AB InBev, however their overall basic strategy could be described as best cost provider. They strive to compete in the mainstream beer market with an emphasis on cost, and some emphasis on differentiated product. In this market are the global and international champion brands, Corona, Budweiser, Stella Artois, Beck’s, Leffe, and Hoegaarden. These beers are produced with the bottom dollar in mind, and are differentiated from other mainstream beers by minor variations in recipe and brewing process. AB InBev also offers highly differentiated products with its local and craft beer breweries as well as with its line of near beer products (AB InBev Annual Report). There is an overall theme of cost reduction in all the operations of the brewery, and the differentiated nature of products offered indicates their strategy could best be described as best cost provider. The mix of global and international beers in their profile with local and national brands also indicates a transnational strategy, in which there are high pressures for both local responsiveness and global efficiencies.
Strengths Present in every region in the world Present in mostly monopoly or duopoly markets Wide portfolio of local and national beers Deep knowledge of markets Consolidating global operations to increase efficiencies Weaknesses Weak current ratio No global beer brands Patchwork brand awareness Opportunities Acquire breweries in markets to establish or improve market share Emerging markets where population is underserved Benefiting from the growth of the African markets in the long Threats Climate impact on grain or hop supply and quality Declining consumption per capita in some saturated markets Dominated markets becoming fractured by new entrants Possible changes in regulations, trade agreements Substitutes Financial Ratios- 2014 Show AB InBev Has A General Advantage Over SABMiller Financial Ratio AB InBev SABMiller Current Ratio -Current assets to cover current liabilities .68 .53 Quick Ratio -Most liquid current assets to cover current liabilities .55 .47 Gross Profit Margin -Profit as a percent of sales generated .59 .22 Net Profit Margin -Profit as a percent of sales generated .196 .202 Return on Assets -Efficiency of use of assets 6.4% 6.3%