Discuss the current corporate strategy which has been formulated and implemented by your selected firm.
With the expansion of technology, AB InBev is taking advantage by using it to have better engagement with their consumers. The company are scaling their current technology that use to analyze data, analytics, automation AI and exploring emerging technologies with block chain and VR (ABInBev, 2019). With the following strategy of emerging to new technology allow the company to have better access to the wants and needs of the consumers and help create new occasions and experiences, and help the rapid growth of beer by category.
Another current corporate strategy that AB InBev use is the creation of ZX Ventures. ZX Ventures is the company’s global growth and innovation team, which was launched in 2015. The team generate new products, launch, and provide a customer the ability to create their own drink of the comfort of their home (ABInBev, 2019). The team goal is to create new products and businesses that cater to the consumer needs. By creating this team provides the company to stay ahead of the curve that allow the corporation to come out with new and unique innovations.
Which of the five business level strategies does the company employ?
A strategy is that AB InBev was able to take advantage of existing supply chains in target markets while purchasing new businesses, therefore raising network costs. They were capable of managing and sourcing any supplies from the organization due to the familiarity of the global supply chain. The company is also capable to partner with other loyal vendors worldwide at a low cost. With the expansion of the company, they have a lot of trust from others which allow them to employ the cost reduction strategy.
AB InBev’s managers throughout the world takes their workforce very seriously by taking practice to achieve their goals. The resources and skills plays a role when planning a strategy to acquire that specific task. These practices are recognized throughout their company and considered their workers as an important resource. This strategy is called Human Capital strategy.
Product diversification strategy is one of AB InBev’s way to continuing their success with their products. They expanded their original market for a product which increases sales with an existing product line. This allow the business to have a control with their costs and to maximize profits. Meaning, when there is a negative effect on the company due to the low profitability in the beer industry will be irrelevant.
AB InBev has a lot of success and recognition when it comes to reaching their peak with other competitors. The company would increase regional competition which would make it more appealing to outsiders. This will gain successful growth for the industry by employing industry attractiveness strategy.
By knowing their locations and consumers, it can benefit AB InBev to capture values. Their products are expanded in many overseas markets. Which enhances the consumer’s desire to pay through the use of the brand name of different global brands to their advantage. The company employs capturing value strategy to gain profits.
At the corporate level, how diversified is the company?
On a corporate level, AB InBev is a very diversified company. Some of their key characteristics such as their growth, cost reduction, product diversification, and industry attractiveness can impact their company worldwide. They are always focusing on marketing for creating brand position in the minds of consumers. Their growth continues to grow due to their unique strategies and business activities. Their products are expanding since they are different from other competitors. As for cost reduction, new arrivals would not have an effect on the supply chain for AB InBev’s target markets since they operate at a low infrastructure cost. They apply effective working strategy for doing their business. Their supply chains are incredibly large. When it comes to marketing for their company, they would always put their minds of the consumer first. This will allow for them to have a mindset on how to attract their consumers. Since, AB InBev is a company that have a differentiated variety of products. They can always depend on other brands to manage their costs and maximize profit.
As well diversified investments, AB InBev provides a diversified environment within the cooperation. According to their website, there are women leaders, equal work means equal pay, empowering caregivers, supporting LGBT rights, and serving those who serve (2019). A long with the supports that the company is providing to their communities and employees also there are nearly 180,000 colleagues around the globe and 500+ brands that are sold to more than 150 countries. The different brands of the company’s beverage can be found in Africa, APAC, Europe, Middle Americas, South Americas, North Americas, which totaling of 58 locations around those different regions. Based on the diversified investment, supports, and location, the company is doing well.
How has the company grown (or contracted) over the last five years?
For the last five years, AB InBev was grown by merging the other brewers’ company and buying the share of the other companies. They are known in more than 150 countries. Their top selling brands with the last five years are Corona, Budweiser, and Stella Artois. As the years go on, they continue to forecast the future and calculate to make a profit out of it. Some of the important topics that they focused on the freshness of how their beer tastes. Their heritage and integrity are always protected. One of their goal is to always respect the consumer choice. Also, sustainability and quality is an important factor. AB InBev cares about the environment and take action by following the 4 R’s rule. The safety preference is considered first for them.
Assess the success of their corporate strategy via 3 tests of a winning strategy.
A success of their corporate strategy is by capturing values and have a solid understanding of their profitability. A way to access their success is to satisfy their customer’s wants and to provide a suitable price range for the consumers. An example that AB InBev use is Stella Artois, it is a beer with European origins that is from Brazil. Their strategy is to convince the Brazilian’s to acknowledge that the beverage is a premium product.
Another winning strategy that the company can use is the gross profit revenue analysis. This will benefit the gross profit a company generates per dollar of income. Meaning, they can earn profits by a reasonable return on revenue as long as it is responsible for operating costs. Therefore, the company will know their total net sales leverage and their profitability of the company. Overall, by the price of goods sold by the corporation, or COGS is one of the main factors that can impact net income.
AB InBev has been a successful company and will continue if they maximize their winning strategies. First, they would always include their employees, brand, competitors, and customers when it comes to thinking for a strategy. By having connections with other vendors, cost reductions can improve the company a lot. The money that is not being use, can go towards another investment. It can either be a marketing strategy that can get their customers engaged which can increase their brand awareness. Overall, AB InBev continues to focus on improvements within the company.
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