5. Case -SABMiller journey to internationalization. SABMiller, a South African Brewing Giant, has grown astronomically from being Johannesburg miners local brewery to becoming a market challenger to US-Belgian giant Anheuser-Busch InBev. Lately, the brewery giant has consolidated its market position to the extent of having a footprint in emerging markets in Africa, Latin America and Asia. From its modest beginning in the neighborhoods of Soweto in Johannesburg, as a local beer for gold miners in the 1800s, one might want to question how a company in a developing world can compete with giants in the developed world. Insights from in-depth interviews with top executives at SABMiller revealed that the company was known as South African Breweries (SAB).

The companys beer brands became so popular in South Africa to an extent of dominating the local beer market. After dominating the South African market, the company decided to leverage its experience in the South African beer market to seek new opportunities abroad. SABs internationalization drive was planned to be a two-step process approach. Firstly, the primary focus, which is the current focus, was to target developing markets. The rationale for this is that developing markets exhibit the same market characteristics as South Africa, and therefore, SABMiller would fare much better than rivals from the developed world when targeting emerging markets. These operations will be used as a foundation by SABMiller to launch an entry into the developed markets.

Secondly, after controlling developing and emerging markets, the following stage was to target developed countries. This plan was necessitated by the fact that SAB was facing stiff competition in developing and emerging markets. Through a series of external synergies in the form of joint ventures and acquisitions, SAB gained a larger chunk of the market in countries in like Hungary, the Czech Republic, China and India. These markets resonate well with South Africa as they echo the same socio-economic development.

The focus on countries that have the same socioeconomic attributes as South Africa was exacerbated by the drive to leverage SABs market to reduce institutional distance and cultural distance and convert them into strengths. Once it has established an international rationalization plan in developed markets, SAB plans to focus on developed markets, especially in Europe and the United States of America. However, despite these plans, one market analyst observed that investors are concerned about investing in firms whose businesses were mainly in emerging markets. In the quest to consolidate its global footprint, SAB acquired US-based Miller Brewing Company to become SABMiller in 2002. This acquisition will be accompanied by a relentless drive to capture the European market. From the case, seems that SABMillers quest is to target developed markets.

1. As a strategic marketing expert, carry out an international marketing macro-environmental analysis of the European market and explain the impact and implication of each factor. N.B: Your analysis should show evidence of sound research into developed markets and their market characteristics. (20 marks)

2. Based on your analysis, explain four response strategies that SABMiller can propose to minimize the threats posed by the macro factors you have described above. (8 marks)

3. Considering SABMillers internationalization drive into the developed world, consider any three factors as a criterion for evaluating the mode of entry into European markets? (6 marks)

4. Suggest with valid justifications, any two possible brand architectures that SABMiller can use when crafting a brand strategy for the developed world market. (8 marks)

5. Discuss any four market challenger strategies that SABMiller can implement to challenge the dominance of Anheuser-Busch InBev. (8 marks)