CRANEFIELD COLLEGE OF PROJECT AND PROGRAMME MANAGEMENT

GROUP ASSIGNMENT FOR

MODULE 4:

ADVANCED DIPLOMA IN PROJECT MANAGEMENT

DECLARATION

“We hereby declare that this assignment is entirely our own work, and that it has not
previously been submitted to any other Higher Education Institution. We also declare that all
published and unpublished sources have been fully acknowledged and properly referenced.
This includes figures, tables and exhibits. Where modified by us, this has also been
indicated.”

PRINT NAME Signature ID Numbers

Daniel Sindane 7601185243084

Clint Rudlin 7912025171082

Neville Van Staden 8301225219082

Nthabiseng Skabate 8802060344083

Ntobeko Mabungela 8006106077083

Sbusiso Cele 7904065371086

Sphamandla Radebe 7909015690089

TABLE OF CONTENTS

1 EXECUTIVE SUMMARY 2

2 INTRODUCTION 3

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 The Lion Match Company (Pty) Ltd: 3

BAKERS LTD: 4

SOUTH AFRICAN BREWERIES (SAB): 5

3 CASE ANALYSIS 6

3.1 THE LION MATCH COMPANY (PTY) LTD: 6

3.1.1 The uniqueness and focus of the Lion Matches 6

3.1.2 How Lion matches organization has sustained its competitive advantage over the
years in South Africa 8

3.1.3 In considering the strategies of each of this organization, do we think there is

something unique to developing countries? If so, please explain. 15

3.2 BAKERS LTD: 17

3.2.1 The uniqueness and focus of the Bakers 17

3.2.2 How Bakers organization has sustained its competitive advantage over the years
in South Africa. 18

3.2.3 In considering the strategies of each of this organization, do we think there is

something unique to developing countries? If so, please explain. 20

3.3 SOUTH AFRICAN BREWERIES (SAB): 20

3.3.1 The uniqueness and focus of SAB 20

3.3.2 How SAB matches organization has sustained its competitive advantage over
the years in South Africa 22

3.3.3 In considering the strategies of each of this organization, do we think there is

something unique to developing countries? If so, please explain. 29

4 CONCLUSION 31

5 BIBLIOGRAPHY 32

1 EXECUTIVE SUMMARY

The purpose of this assignment is to compare and critically analyse the strategy of three (3)
companies named Lion Match Company (LMC), Bakers and SABMiller company; identify

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the unique attributes of the company’s strategy, and determine the lessons learned
from the company’s strategies with specific reference to whether these are unique to
developing countries. The importance of analysing the internal and external
environments (macro- and industry environments) in which the companies operates is debated
in many literary works referenced in the assignment and supports or critiques the strategic
directions employed by the
companies.To understand the strategiesof the company, the researcher reviewed the
information provided on their websites and assessed existing literature related to strategy
development and corporate strategy. The following main sections are discussed:

Uniqueness and focus of the Lion Match Company:

This section highlights the unique attributes of Lion Match, Bakers and SAB Miller company by

expounding on their vision, mission, and value statements which form the basis of their
strategy.

How the organisation sustained its competitive advantage:

In this section, the researcher assessed the companies as part of their industry analysis using
the PESTEL, SWOT, and PORTER’S Five Forces analysis to highlight the various factors that
give the company a competitive advantage. Some results from this assessment illustrate that
the organisation uses innovation, continuous improvement, cost-saving, a strong network
of wholesale distributors, and strategic partnerships to sustain a competitive advantage
over competitors.

Lessons learned and conclusion:

Some lessons learned include understanding the importance of leadership in making sound

strategic decisions and setting clear organisational goals to execute corporate level, business
level, and functional level activities.

2 INTRODUCTION

THE LION MATCH COMPANY (PTY) LTD:

The Lion Match Company (Pty) Ltd is amongst the best performing FMCG company in South
Africa. The company boast a history extending over 400 years and has endured World Wars,

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the great depression and constantly changing environments [including three recessions]
since 1994. Their survival over these economic challenges shows a great deal of strategic
flexibility. The company is a leader in its respective industry. LMC has a 98 percent share
of South Africa’s match market and has diversified its product portfolio over the years and
simultaneously grown its turnover from R200m to R1.5billion in the last two decades.

Experts in the discipline of strategic management (Amos et al., 2019; David &
David,2017;Lamb, 1984) agree that strategic management is an ongoing process that involves
evaluating cross-functional and integrated business processes, formulating and implementing
decisions to create value and enable an organisation to retain a competitive advantage and
achieve its objectives. David Hurst adds that “the formulation of strategy can develop
competitive advantage only to the extent that the process can give meaning to workers in the
trenches.”

From the above, it can be posited that strategic management assists organisations achieve and
maintain a competitive advantage over their competitors.

BAKERS LTD:

Bakers, a subsidiary of AVI, has been around for over 150 years offering different types of
biscuits to millions of people in South Africa, whom currently have memories of how they grew
having their brands in their houses. Bakers are producing different sweet range of biscuits that
are appreciated by young and old, different races, different geographical locations regardless of
their financial status, which includes Tennis, Eet-Sum-Mor, Boudoir, Blue Label Marie, Red
Label Lemon Creams, Strawberry Whirls, Iced Zoo, Toppers and the Christmas favourites,
Choice Assorted packed with different kind. They also have savoury biscuits range like Provita,
Cream Crackers, Mini Cheddars, Salticrax, Crackerbread, Kips, Wheatsworth, Vitasnacks and
Snacktime. All these range of biscuits were produced with the quality and consistence that they
promised to deliver, with their best ingredients and uniqueness.

When the Bakers was established was known as Baumann & Co in 1851 by a baker and a
family man, Johann Friedriech Baumann, who came to Durban in South Africa with a vision to
manufacture what was then known as Ship biscuits, to supply the sailors. In 1883 Baumann
imported ship biscuits machine as they acknowledge that machine produced ship biscuits will
be able to produce more in quantity, even though they were unable to operate it, with their
technology and improvement driven, they managed to have their first machine produced ship
biscuits. They continuously expand their range of biscuits and planned to expand further as
they procured more biscuits machines.

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In 1915 there was an anti-German riots that affected their business where their office was
burned down due to their German Name, their vision was to continue with manufacturing of
biscuits amid of destructions, they have rebuilt and decided to change their name to Bakers
Limited to avoid unnecessary destruction of world politics. The wartime ration demands was
high and they decided to open another factory in Cape Town in 1918 as part of their growth
strategy, and in 1921 they opened another one in East London. Their plan to be unique and
distinguish themselves, they started to display Bakers trademark on their Bakers Limited
packaging from 1923.

In the 1930’s there was great depression where there was shortage of rotation of supply which
was affecting their business operations, the hard times fuelled innovative baking techniques
and production methods. Their brand was still held in high esteem and loyalty by customers
even during trying times, they installed a printing plant. Bakers continued to grow whereby they
had 240 product lines, 200 employees and their market share in bread trade was 56%. In the
1950’s after war has ended their business increased by 77% and Bakers realized that they will
not have much business on ship biscuits, they decided to go inland and established a
warehouse in Isando, Kempton Park. In the 1960’s they decided to compliment the Isando’s
warehouse by opening a factory close-by, and there was introduction of multi-colored wrapper.

Bakers strategy and vision of offering quality, and reliable to their customer, in the 1970’s they
realized that moving their consignment by train was not as effective as they wanted, with long
travel time and damages caused en-route, they procured a fleet of pantechnikon trucks to
transport their stock. These trucks became familiar sight between Johannesburg and Durban as
their business was doing very well. They continued delivering unprecedented value for money
to their customers, producing quality product, and keeping their cost very low, and made them
the leader of the industry. The “little Man”, as the Bakers trademark was known, continued to
evolve as the packaging kept on improving.

In the 1990’s the Bakers® company brand was developed and in conjunction with CGI
technology and the “little Man” was brought to live as he appeared in many TV adverts with
“Bakersman can” jingle occupies the airwaves. Bakers marketing strategy solidified by
engaging consumers with promotions, competitions, TV commercials, and on-going CSI
initiatives, and ensure that their relationship with customers remain strong and trustworthy. In
2014 and 2015 they continued to introduce other products to increase their market share and
solidify their presence in FMCG biscuits line.

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SOUTH AFRICAN BREWERIES (SAB):

South African Breweries Ltd (SAB) is one of the top 3 major global brewers and was a wholly
owned subsidiary of SABMiller until its interests were sold to Anheuser-Busch InBev on 10
October 2016. Now it has more than 200 brands brewing interest and circulation in 75 countries
worldwide. SAB has the leading position to produce and distribute both alcoholic and non-
alcoholic beverages and been registered in 1895, since then it is momentous profit and
prevailing market position and has develop its business in home sectors. The company got
dominance over 98 percent of market and faced a little left expansion in local business and tried
to expand globally in 2000. In 2001 SAB had production of 77m hectolitres of alcoholic and non-
alcoholic beverages and dominated as the fifth largest brewer in the world covering 21
countries.

In 2013, the company joined leading alcohol producers to reducing harmful drinking, 2014 it
was divesting its 39.6 percent stake in casino and hotel group Tsogo Sun Holdings
Limited through institutional share placements and a partial buy-back from Tsogo Sun.
SABMiller's stake at the time was valued at approximately ZAR11.7 billion (US$1.09 billion) and
hold 57 percent shareholding in the proposed venture It has 53 distribution centres, including 41
SAB-owned depots, 10 independently owned distribution depots and two Honey BEE
franchises. SAB also invests more than R120 million in community partnerships and
sponsorships annually.

3 CASE ANALYSIS

The case analysis will focus on the three companies specifically focused on the three-question
stated below:

 Identify the uniqueness and focus of the Lion Matches, Bakers and SABMiller
strategies.

 Explain how each of these organizations has sustained its competitive advantage over
the years in South Africa.

 In considering the strategies of each of these organizations, do you think there is

something unique to developing countries? If so, please explain.

3.1 THE LION MATCH COMPANY (PTY) LTD:

3.1.1 The uniqueness and focus of the Lion Matches

Michael Porter identifies three principles underlying strategy:

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● Creating a “unique and valuable market position”,

● Making trade-offs by choosing “what not to do”

● Creating “fit” by aligning company activities with one another to support the chosen strategy.
Strategic management consists of three stages: Strategy formulation; the Strategy
implementation and Strategy evaluation.

Lion Match Company (LMC) was established more than 100 years ago. Over the years, the
Company has diversified its product portfolio, and this has seen it grow its turn-over fromR200m
to R1.5billion over 15 years. Below are the organization’s Mission, Vision, and Values (Lion
Match Company: Online)

THE VALUES
 RESPECT
Recognising the dignity of all people & ensuring
a climate of mutual understanding.
 TEAMWORK
Developing our people to their full potential while working towards common goals.
 HONESTY
Upholding the highest level of integrity, conducting business in an ethical manner and
building trust through our actions.
 INNOVATION
We are prepared to challenge conventional wisdom and think out of the box.
 EXCELLENCE
We provide customers with quality products that suit their needs.
 ACCOUNTABILITY
Developing a working environment in which the employees take ownership,
accountability and responsibility for their actions.

THE MISSION
 To build a world-class business by being
number 1 in our chosen fields of endeavour:
• Marketing
• Sales
• Manufacturing

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 • Sourcing and Procurement
• Distribution and Logistics
• Human Resources and People’s Practices
• Financial and Commercial Controls and Practices

THE VISION
 To be the top performing FMCG company focused on providing world class brands and
products to local and international markets.

The above strategy shows that LMC aims at being the best at what they do, and they use
values such as accountability, teamwork, and excellence among others to maintain their
focus on being the best. LMC’s strategy is clear and consistent with customer and
stakeholder expectations as is shown on their mission, to provide world-class brands and
products. The strategy is flexible and innovative. This has contributed to their uniqueness by
adapting to the changing environment, changing processes in manufacturing, logistics, and
warehousing.

LMC introduced forestry and environmental sustainability to its business portfolio.LMC has
consistently focused on LMC matches, firelighters, Clear lite range of Citronella Candles,
and Lamp Oils. The company has acquired organizations that provide, men’s range of gels,
foams, razors, and roll-on deodorants as well as a complete sanitary protection range
amongst other products. In the 1990s they owned their timber farms and investigated
alternatives of other timber species. That led to a change in their production processes and
later gave birth to Lion Match Forestry (Pty) Ltd. The Lion Match Company relates how
important their human resources are in the mission statement. Importantly, their core values
surround their people. As they acquired more companies LMC could underpin their
implementation strategy into other subsidiary companies they own, as this was their
business model used to integrate the new processes from the newly acquired businesses in
different fields.

3.1.2 How Lion matches organization has sustained its competitive advantage over the
years in South Africa

In today’s competitive market, companies compete on price, quality, and customer service.
(Burke: 2013)

● Innovation is central to gaining a competitive advantage. Investing in research and

development within the Company can develop new ideas to enter new market segments.

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● To prevent new brands from entering the market the Companies can copyright and license
their products to protect their intellectual property.

● Continuous improvement of products is essential in maintaining a competitive advantage.

This is an important tool to keep existing customers interested in the brand.

● The Company can choose a low-cost strategy to attract consumers and increase their market
share and profits by increasing volumes.

● To increase sales and turnover Companies need to expand their businesses beyond their
immediate location.

● Companies could investigate the automation of their production lines to improve efficiency.

Thompson, Peteraf, Gamble, and Strickland III (2016:72) explain that the core concept behind
key success factors as those essential components of the strategy, the quality elements of
product and service, resources, operational approaches, and competitive capabilities that are
imperative to survive and keep a competitive advantage. As key success factors apply to all
organisations and industries, Meyer (2020:100) refers to three important questions for
organisations to determine its ability to survive:

1. What is the basis that customers choose a specific brand, meaning what do they want?

2. Do an organisation have the resources, capabilities, and capacity to produce as per the
vision and mission, questioning if the organisation can compete successfully?

3. To what extent and what are the requirements to achieve and maintain a competitive
advantage. The researchers investigated key success factors within the boundaries of
horizontal, vertical, and geographical scope within LMC to analyse how the organisation has
sustained its competitive advantage over the years in South Africa. As Lion Match Company
operates in a mature industry, the researcher investigates the key success factors of a mature
industry. Louw and Venter (2019:178) cite the work of Robert Grant, an economist and known
expert in the field of competitive advantage, who identified the following opportunities for
organisations that operate in mature industries:

Cost Advantage – refers to the organisation’s ability to save cost, maintain production with
lower cost. Another perspective is cost leadership that’s defined as the organisation's ability to
achieve profits by producing its products or services at a lower cost.LMC has invested in their
forestry known as The Lion Forestry which is their main wood supplier as the import cost of
wood escalated during the early 1900s. The SA Forestry did an article on “the role of cattle at
[LMC]” (2009: Online) which highlights savings in grass cutting costs and weed control within

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their forests as some of the benefits of cattle farming. The sales of excess bulls also improve
profits. According to Le Guern (2018: Online) LMC has through in-house engineering
capabilities capitalised on their production output through investing in automated processes on
the match, shoe-polish, NSP Unsgaard factories.

Profitable market segments – refers to market segments or foreign market entry mode that
includes exporting, strategic-alliances, joint-ventures, and full ownership of subsidiaries in one
or more foreign countries. This opportunity refers to the selection of profitable market segments
that can increase profitability.LMC’s acquisition of Price Candles, NSP Unsgaard, and
ownership of Beige Holdings increased their FMCG footprint remarkably and during the Export
week for Trade and Investment, Kwazulu Natal 2014, Lion Matches presented the
organisation’s history and growth. The organisation boasts export capabilities and branches in
Angola, Brazil, DRC, Indian Ocean Islands, Mauritius, Mozambique, USA & Canada, and
Zimbabwe.

Strategic innovation – refers to the importance for organisations to seek opportunity even
when, for example, product innovation seems inadequate. Seeking new markets and adding
products and services allow for opportunities for strategic innovation. This key success factor is
the most evident in the Lion Match Factory, even though they remained in the FMCG industry,
they expanded their product range with acquisitions of Price Candles, NSP Unsgaard, and
Beige Holdings brands that increased their competitive advantage in the industry.

A strong network of wholesale distributors – This refers to the opportunity for organisations
to stock their brands at reputable retailers, including the ability to have their brands displayed
on billboards, shops, bars, stadiums, etc., which coincides with the brand.

The Lion Match Company not only can export to their branches as mentioned above, but their
brands are in every local shop, and wholesalers.

Functional level strategy (includes operational level strategy)

Amos et al. (2019:19) assert that one of the fundamental roles of a functional strategy is to
support the company’s business strategy and competitive approach by performing “strategy-
critical activities.”

At an operational strategy level, the CEOs, senior managers, and board of directors must
ensure that corporate strategy is implemented, while the board of directors also approve
business decisions and verify annual reports and results. The CEOs approved the annual

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reports, which indicate the results of the organisations as they relate to corporate strategy
(Amos et al., 2019:19) The success of Lion Match Company is a result of deliberate strategic
decisions that provided the organisations with meaningful direction. According to Amos et al.
(2019:9), strategic decisions need to be made to provide organisations with a clear vision and
an implementable strategy that creates sustainable success. The results [financial and
organisational] and continued success of the three companies are linked to their adopted
strategies in terms of

●Efficient mission, clear vision, and core value.

●Competent strategic leadership and management.

●Operational effectiveness strategies of the companies can only be as effective as the ability of
its resources [human resources, systems, and tools, etc.] to implement it.

Macroeconomic analysis:

The macro-environment analysis below focuses on the Lion Match Company. The tool used is
Pestel (Political, economic, socio-cultural, technological, environmental, legal.)

 PESTEL Analysis of Lion Match (PTY)

PESTLE: is an analysis methodology used by organisations to investigate external factors.

These include Political; Economical: Social; Technological; Legal and Environmental. Decision-
makers are made aware of external changes and factors that give input into their strategy
development and sustenance.

Political

The trade war between the United State of America (U.S.) and China elevated the state
of global politics within the context of macroeconomic impact on organisations. According to
Steinbock (2018), the trade war has the potential to start the “Great Global Depression 2.0” and
the risk to global outlook overshadows world GDP growth. A global recession would plunge to 2
and 2.5 percent for years to come resulting in new geopolitical conflicts due to the plunging of
world trade and investment.

Global politics have a direct influence on South African politics. In December 2018, the South
African President signed into law the National minimum wage bill, which increased to 20 rands
per hour as from 01 January 2019 (www. times live.co.za, 2018). The impact of such legislation
has an impact on the expense base of businesses such as Lion Match Company. A

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commonality shared between these organisations is that the CEO's and Chairmen are always
cognisant of the world they operate in and that for their businesses to thrive, they have to
consistently communicate to their stakeholders the performance and outlook of their companies
based on macroeconomic factors in their opening statements and overviews of annual reports.
Lion Match (Pty) Ltd is a uniquely South African company with a largely local economic
footprint.

Economical

The health of a nation’s economy affects individual organisations and industries because
economic factors will affect the nature and direction of the economy in which organisations
operate. Organisations need to know what the economic situation in a country is. Managers
have to consider the unemployment rate, level of disposable income, availability, and cost of
credit, and the trends in the GDP. If the growth rate in the GDP is smaller than the growth rate
of the population, it is logical that there will be a decline in the standards of living(Lazenby,
2005). In the budget speech, the Minister of Finance outlined the plan towards an economic
strategy plan, which entails strengthening the macroeconomic framework to deliver certain
transparency and lowering borrowing costs and lowering the cost of doing business. The
minister also increased the excise duties to keep pace with inflation.

Credit rating agencies such as Moody have a direct impact on the country’s currency strength
and ability to borrow funds from international financial institutions. A downgrade would cause
the rand to depreciate which would make imports like oil more expensive. An oil price increase
drives inflation up and the South African Reserve Bank increases the repo ratemaking the cost
of vehicle loans, mortgages, and other long-term loans unaffordable (OldMutual Finance, 2020).

Social

Socio-cultural changes occur because of religious, ethnic, educational demographic, lifestyle,

and ecological changes. As social attributes change, so does the demand for different types of
products and services (Louw & Venter, 2013). The single most common concern affecting
businesses, government, and society in South Africa is the high level of crime attributable to low
education and skills levels, high levels of unemployment, and generally perceived lawlessness.

Lion Match (Pty) Ltd, focuses on corporate social responsibility activities such as providing
support to orphanage homes, renovating the children’s hospital, distributing school shoes,
sanitary pads, wet wipes, assisting smaller farmers with the preparation of fire breaks, and
assisting the communities to gain access to water by drilling and developing boreholes in the

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area. This demonstrates the Company’s commitment to achieving the Sustainable development
goals for the disadvantaged communities within its operating business environment.

Lion Match (Pty) Ltd, focuses on corporate social responsibility activities such as providing
support to orphanage homes, renovating the children’s hospital, distributing school shoes,
sanitary pads, wet wipes, assisting smaller farmers with the preparation of fire breaks, and
assisting the communities to gain access to water by drilling and developing boreholes in the
area. This demonstrates the Company’s commitment to achieving the Sustainable development
goals for the disadvantaged communities within its operating business environment.

The Lion Match Company supports Ingane Yami. This is a non-profit organisation, established
in response to the growing AIDS crisis in KwaZulu-Natal, South Africa. The organisation works
with orphaned and abandoned children as well as children trapped in vulnerable circumstances
and raises them in a loving family environment to restore lives. Their ultimate goal is to help
these children realise their full potential and become a future generation of young leaders.

Technological

The technological environment includes the institutions and all activities involved in creating
new knowledge and translating that knowledge into new outputs, products, processes, and
materials (Lazenby, 2005).

Environmental

The green economy is the focal point for most organisations that operate in the current
business environment. Reduction of the carbon footprint is of paramount importance and driven
by all stakeholders such as businesses, governments, and non-profit organisations to mention a
few. The United Nations Secretary-General, Ban Ki-Moon states that we are now at the
threshold of a global transformation-the age of green economics (Hamilton, 2020).

To reduce its dependence on imported timber, The Lion Match Company (Pty) Ltd, adopted a
tree planting scheme across South Africa in 1922, which today has evolved into the company’s
substantial forestry operations in Mpumalanga. The company’s first properties were purchased
in 1927 and through to the 1990s, the various Lion Match factories were provided with poplar
from the company’s farms and extension growers. By the early 1990s, the incidence of “rust” on
the poplar plantations had reached alarming proportions and had severely affected the growth
rate of poplar. This problem, coupled with the environmental issues surrounding the growing of
poplar, resulted in The Lion Match Company (Pty) Ltd investigating other timber species as an
alternative for match manufacture.

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The company’s forestry operations are conscious of their responsibilities in terms of nature
conservation and ensure that they act responsibly in respect of the preservation of vleis and
wetlands, and the effective prevention and combatting of fires.

Forestry (Pty) Ltd also reflects a responsibility to the communities in which it operates. It assists
smaller farmers in the company’s areas of operation with the preparation of fire breaks. It
supports local schools by providing firewood for cooking, as well as assisting these schools with
the development and maintenance of their sports fields and gardens.

 SWOT Analysis of Lion Match Company

Strengths

LMC Established over 120 years ago, LMC has survived extremely volatile External factors,
such as two World Wars, economic depressions, and recessions, not overlooking political
changes, including government policies and challenges experienced in South Africa. Good
leadership is one of the key contributors to Lion Match Company’s success. Their vision to Lion
Match Company is one best performing particularly in South Africa is inherited the way.
Strategic intent must be agile, mouldable to the environment, and agile. Lion Match Company
has adopted a social media marketing strategy through Facebook. This is a brilliant and
strategic move to create visibility for its consumers. The Company has various promotions they
conduct; this creates interest in their products and further reinforces their position in the market.

Weakness

MC to be results-oriented, customer-focused, form strategic partnerships in line with their

strategic intent, take public responsibility, invest in their people’s development, and manage
their organisation by processes and facts. Update processes to align with Industry 4.0. Employ
credible project managers to manage organisational resources effectively and efficiently to
ensure that a strategic position is attained. This can be done by ensuring that:

 Projects enable business value creation.

 Projects meet regulatory, legal, or social requirements and satisfy stakeholder requests or
needs.
 Projects implement or change business or technological strategies and create, improve, or
fix products, processes, or services offered.

Projects implement or change business or technological strategies and create, improve, or fix
products, processes, or services offered. The above factors influence an organisation’s ongoing

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operations and business strategies, and leaders respond to these factors to keep the
organisation viable (Project Management Institute, 2017).

Opportunities

LMC has managed to execute its corporate strategy plan very well since its inception. Lion
Match Company managed to identify opportunities outside its original industry through a
diversification strategy using a merger and acquisition model. LMC further the competitive
advantage by adopting tree planting in 1922 which today stands as a substantial forestry
operation in Mpumalanga.

Various species of pine were found to be most suitable although the introduction of pine into the
company’s factories resulted in certain changes that had to be made to the production
processes. By 2007, the company’s forestry operations had evolved to the stage where an
independent forestry business was established within The Lion Match Company (Pty) Limited,
being Lion Match Forestry (Pty) Limited. Whilst timber is provided to the Rosslyn factory from
this business unit, the company still makes use of timber supplied by independent growers and
by the state-owned Komatiland forests.

Threats

Since the early 1900s, LMC had to adapt to the changing environment, which also affected its
manufacturing, logistics, and warehousing processes and introduced forestry and an
environmental sustainability aspect to the business. The Lion Match Company further the
competitive advantage by adopting tree planting in 1922, investigated alternatives of other
timber species in the 1990s, and own its timber farms which today stands as a substantial
forestry operation in Mpumalanga known today as Lion Match Forestry (Pty) Ltd.LMC also
started cattle breeding to minimise the risk of fire as well as the fire load on the properties by
clearing weeds, grass, and small shrubs. Sustainable organisations meet the needs of current
customers while ensuring the conservation and preservation of natural resources and
ecosystems.

3.1.3 In considering the strategies of each of this organization, do we think there is

something unique to developing countries? If so, please explain.

(Partington 2000), as cited by Stretton 2018 defines Business-level Strategy is, firstly, analysing
the market in which the organisation is operating, in comparison to its competition. Secondly,
examining how an organisation should compete in that market. Thirdly, where the organisation
intends to be in the market and fourthly, what the organisation needs to do to achieve that aim.
According to (Khanna et al ., 2005:64), Organisations that succeed use different strategies in

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developing countries compared to strategies used in their home countries. Emerging markets in
developing countries have increased financial opportunities for selling products and goods and
organisations that target these markets can take advantage of low costs in infrastructure
development and cheap labour (Khanna et al.,2005:64). The researchers deduce that
organisations that focus on customer satisfaction gain a competitive advantage by
strengthening this competence. The business-level strategy is thus the actions that must be
taken to provide that satisfaction. The following are some of the actions that can be taken by
Lion Match Company.

A) Types of Business level Strategies in relation to developing

countries.

1. Cost Leadership:

When market conditions in the industry allow many organisations to compete for customers
based on the price of the product. Companies will have an advantage when their price is lower
than competitors while retaining a profit margin. Organisations can become cost leaders by
leveraging economies of scale on, mass production of standardized products that are common
to the customers, controlling expenses, and reducing the cost related to selling the goods.
These organisations emphasise efficiency. Cost leaders charge low prices while producing
quality products and services. The Lion Match Company, for example, has control over their
raw materials which allows them to reduce the prices of candles, in countries that have
electricity problems in Africa and use candles for light.

2. Differentiation / Uniqueness:

When an organisation’s strategy differentiates its product on uniqueness to justify higher

pricing. A company practicing this strategy competes based on the offerings of its product
rather than the price of the product. Implementing such a strategy requires the organisation to
explicitly bring out the differential attributes of its products to customers and this leads to
spending heavily on advertising. Lion Match Company is a good example of this strategy on
their match products. The website (2020: Online) proudly states that the Lion Match is very safe
and is grown from their pine trees. This message communicates to the customer that not only
are they ‘safe’ when lighting a matchstick made by Lion Match, but they are safer than any
other since they are made under severe safety and superior metrics.

3. Focused Low Cost:

This strategy is used by organisations when the price is lowered to focus on a niche market.
The product may be priced differently in a different market while it is lower in another area, i.e.

16
in a developing country. This may be based on the volume of sales and demographics in some
cases. Organisations need to understand the customers in that market to provide lower prices.
Wholesale prices are dependent on the areas in which they are registered as wholesalers.

4. Focused Differentiation:

This strategy offers a differentiation strategy to a targeted niche market. Companies using this
strategy will often provide specialised products that only cater to that niche market. This
requires organisations to be innovative as the niche market controls the demand for the
product. Organizations need to analyse the competition and target a niche where the competitor
has many weaknesses.

5. A combination of Differentiation and low cost:

This strategy offers a differentiation strategy while the cost of the product is cheaper.
Companies may be able to reduce costs through the economies of scale and technology while
being innovative in providing changing customer needs.

B) Lion Match Company

 Strategic partnerships: For the Company to improve their performance they should be
results-oriented, customer-focused, form strategic partnerships in line with their strategic
intent, take public responsibility, invest in their people’s development, and manage their
organisation by processes and facts.
 Update processes to align with Industry 4.0: Increase its CSI initiatives to create a
sustainable organisation. This also presents opportunities for Lion Match Company to
come up with innovative ways to solve problems around the environment especially
farming of timber may be affected by the environmental issues. Lion Match Company is
already involved in many CSI initiatives, they just need to update them to match the
current challenges their communities are facing.
 LMC can employ project managers to manage organisational resources effectively and
efficiently to ensure that a strategic position is attained.

This can be done by ensuring that:

 Projects enable business value creation.

 Projects meet regulatory, legal, or social requirements and satisfy stakeholder requests
or needs.
 Projects implement or change business or technological strategies and create, improve,
or fix products, processes, or services offered.

17
  The above factors influence an organization’s ongoing operations and business
strategies, and leaders respond to these factors to keep the organisation viable (Project
Management Institute, 2017).

3.2 BAKERS LTD:

3.2.1 The uniqueness and focus of the Bakers

Bakers strategy and vision of offering quality, and reliable to their customer, in the 1970’s they
realized that moving their consignment by train was not as effective as they wanted, with long
travel time and damages caused en-route, they procured a fleet of pantechnikon trucks to
transport their stock. These trucks became familiar sight between Johannesburg and Durban as
their business was doing very well. They continued delivering unprecedented value for money
to their customers, producing quality product, and keeping their cost very low, and made them
the leader of the industry. The “little Man”, as the Bakers trademark was known, continued to
evolve as the packaging kept on improving.

In the 1990’s the Bakers® company brand was developed and in conjunction with CGI
technology and the “little Man” was brought to live as he appeared in many TV adverts with
“Bakersman can” jingle occupies the airwaves. Bakers marketing strategy solidified by
engaging consumers with promotions, competitions, TV commercials, and on-going CSI
initiatives, and ensure that their relationship with customers remain strong and trustworthy. In
2014 and 2015 they continued to introduce other products to increase their market share and
solidify their presence in FMCG biscuits line.

3.2.2 How Bakers organization has sustained its competitive advantage over the years in
South Africa.

Internal Environment

Bakers has managed to be major industry player based on their vision, mission and strategy
which was developed and upheld by them in South Africa. They have evolved by ensuring that
they continue empowering their employees with relevant education towards their respective
competency requirement. They must create a system of independency to creativity which will
allow employees to be innovative on any opportunities that are available to make informed
decisions where necessary, allow creativity to flourish without fear and limitations. All this must
be allowed within the rules and employees must be accountable for their decision and must be

18
acknowledged and recognized for their unique contributions. Bakers must create a culture of
sourcing innovative solutions, whether to improve or new ideas, to improve operations first in
the company by allowing their employees who are on daily basis working on the systems.

External Environment

In the early 1990’s Bakers embarked on mini Cricket which was development structure for
Cricket, but it also brought and introduced the game to communities that were not part of
Cricket fraternity. Their brand was known and recognized by many children. The strategy can
be re-invented and be utilized to make their brand synonymous with some sporting, academic
or any schooling event in the country. Having access to many children will give Bakers to
continuously engage and determine what is their preference in biscuits for any kind of occasion,
get an honest feedback for any new product they want to introduce by giving as sponsored
snack during their events, and generally get to know what children love in the biscuits. This
strategy will focus the children on Bakers brand as they grow and would always align the brand
to their child wood memories and activities they were involved in. As much as this strategy will
assist in brand growth in popularity. It can also be used to get the understanding of the
competitors as children will be candid about which is the best and preferables, which brands
are easily available, what are their dislikes.

Bakers must expand globally without losing focus on local market by further investing their
resources in ensuring that they are still leading in the biscuits market in South Africa. People
are becoming cautious of what they consume as they prefer healthier food and must invest their
resources in trying to find a balance in the ingredients of their products. In recent years South
African laws made it compulsory that all consumables must clearly specify their ingredients,
which will make consumers aware and alert of what is contained in their food. Bakers must start
researching healthier ways of continuing with similar quality products they currently producing
and strive to better them in future.

19
Figure 1: Structure of External Environment (Louw, 2020)

3.2.3 In considering the strategies of each of this organization, do we think there is

something unique to developing countries? If so, please explain.

With the fourth Industrial Revolution in the mist, and 5th Industrial Revolution in the horizon,
Bakers must start to spread their presence in developing countries by getting expert advice on
the industry internationally. They must recognize that as the world becomes smaller with
information is easily accessible, they can proactively identify countries or regions that they can
expand to and understand the political stability, sociocultural, policies, and business operations.
Bakers must strength their network of experts and VPN who will be their guiding lead in how
business etiquettes, competition and possible partners are positioned in those countries. Get in-
depth information on their tolerance of new players in the industry as most developing countries
have moved from unfriendly rules to opening up of new players, even though not yet easy, but
improving.

Bakers must take advantage of rapid growth of developing countries as free market economy is
being realized, by engaging and marketing their products in this early stages of the new era.
They can ensure that they form part of this developments not only on buy and sell interface, but
form partnership with communities in assisting in some of the basic needs, like academic,
sporting, environmental sustainability and awareness, and many other activities that will form
part of developing those countries. They must identify possible partnership and competitors, in
conjunction with their experience and business knowledge, they must research and understand
culture and business of counties they will be venturing into. To prolong their longevity in those

20
countries they must not get involved in politics of the region, but ensure that they know
business rules and regulations, particularly of foreign business, and comply.

3.3 SOUTH AFRICAN BREWERIES (SAB):

3.3.1 The uniqueness and focus of SAB

SAB Company is successful because it is guided by a clear strategy. Vision, mission, and
values form the ground for building the strategic foundation of the organization. They direct and
guide the purpose, principles and values that govern the activities of the SAB and communicate
this purpose of the organization internally and externally.
Successful organizations ensure that their goals, objectives and principles are always in
synergy with their vision, mission and values and consider this as the basis for all strategic
planning and decision making.
Mission: SAB is an international company committed to achieving sustained commercial
success, principally in beer and other beverages, but also with strategic investments in hotels
and gaming. We achieve this by meeting the aspirations of our customers through quality
products and services and by sharing fairly among all stakeholders the wealth and opportunities
generated. Thereby, we fulfil our goals of business growth and maximised long-term
shareholder value, while behaving in a socially responsible and progressive manner.
Values: As we apply the Mission, SAB Company Values guide relations with all those who
have a direct interest and inform the Business Principles which govern those relationships in
the business also in stakeholders. SAB conduct business with integrity, respecting all applicable
laws. Straightforward and honest in the commitments SAB make: seeking mutually beneficial
and enduring relationships; and being open and accurate in communication. Respect the rights
and dignity of individuals. Value cultural diversity and promote inclusivity through employee
participation and empowerment, Optimise the creation of wealth to provide fair reward, and
recognition, for the contributions of all SAB stakeholders. Create and sustain a safe and healthy
working environment that, in addition, provides job satisfaction and the development of each
employee’s potential. Provide products and services of uncompromising quality to meet the
needs of our customers. SAB is responsible corporate citizen and fulfil their responsibilities as
an integral member of society. In our business decisions, while asserting our right to trade
freely, give appropriate consideration to social and environmental impacts.
Principles that govern the activities of the SAB

21
Figure 1: SAB 10 Principles - Vision and Values

3.3.2 How SAB matches organization has sustained its competitive advantage over the
years in South Africa

SABMiller PLC is a global giant in the brewery industry and has a track record of innovation and
growth. Being one of the world’s biggest brands, SABMiller has adopted a unique style to ensure
competitive advantage and remain at the forefront of the brewing world. Key to its developing and
maintenance of relevance are its values and strategic priorities values include, recognition of
people being an enduring advantage Emphasis on accountability Teamwork Respect for
consumers and customers Indivisibility of reputation Strategic priorities include, creating a
balanced and attractive global spread of businesses, developing strong, relevant brand portfolios
The second stage of the master programme plan for managing strategic transformation firstly
calls for analysis of the organisation's core business, and competencies of its work force. An
organisation’s core competency is a strength that sets it apart from its competitors. It relates to
the organisation’s core business by being focused on the type of customer in the market
segments that it operates in, as well as the related products and services. Strategies should
concentrate on the organisation’s core business and competencies.

22
Cost competitive advantage is when a company is able to utilize its skilled workforce,
inexpensive raw materials, controlled costs, and efficient operations to create maximum value
to consumers.
SAB owns the South African Brewers Hop Farms (Pty) Ltd, the South African Breweries Barley
Farms (Pty) Ltd, the South African Breweries Malting (Pty) Ltd and 60% share of metal crown
manufacturer, Coleus Packaging (Pty) Ltd which lower their production cost.
Market segmentation is the actual process of identifying segments of the market and the
process of dividing a broad customer base into sub-groups of consumers consisting of
Existing and prospective customers.
Profitable Market segmentation is the actual process of identifying segments of the market
and the process of dividing a broad customer base into sub-groups of consumers consisting of
existing and prospective customers. This refers to the selection of profitable market segments
which can increase profitability.
Bilicz and Béres (2016: 9) researched the acquisition history of SABMiller and highlights
acquisitions commenced from as early as 1979 when SAB acquired 49% of Appletiser and 3
years later acquired the complete firm. Ongoing acquisitions within Europe, Africa, Asia, South
and North America increased their global footprint remarkably, with the multi-billion-dollar
merger with AB InBev making them world leaders in the FMCG market, dwarfing major brewers
and competitors such as Carlsberg and Heineken.
Strategic innovation: is about creating new value people are willing to use and pay for,
whereas strategy is the plan for harnessing for example marketing, operations, and finance to
support achieving the competitive goal.
The subsidiary spearheaded SAB's initial international expansion efforts, having established
new breweries in Northern Rhodesia, Zambia and Bulawayo, Southern Rhodesia, in the early
1950s. Further international expansion came in the 1970s and 1980s with the establishment of
breweries in Botswana, Angola, and the buying of Compañía Cervezera de Canarias of
the Canary Islands. Nevertheless, prior to 1990, SAB remained primarily focused on domestic
opportunities. This means SAB expanded globally and invested more in product innovation
which made them increase their competitive advantage.

Strong network of wholesale distributors – This refers to the opportunity for organisations to
stock their brands at reputable retailers, including the ability to have their brands displayed on
billboards, shops, bars, stadiums, etc., which coincides with the brand.

23
The Lion Match Company, Bakers within the AVI group and SABMiller not only have capacity to
export to their branches as mentioned above, but their brands are in every local spaza shop,
shebeens (SAB) and wholesalers.

Superior firm size and branding capabilities – This refers to opportunities with international
brands. The Lion Match Company, Bakers within the AVI group and SABMiller have a global
footprint as indicated above that increase their competitive advantage.
Clever advertising – This refers to having the ability to induce and persuade customers to buy
more of their favourite product. The Lion Match Company, Bakers within the AVI group and
SABMiller have capacity to advertise in local newspapers, radios, on the internet and via
television networks.

Corona Virus tragedy impact - It’s no secret that the economy has been hit hard by corona
virus and with small businesses being hit hardest. SAB is supported by many of these small
businesses, especially taverns, and it’s been difficult to see the struggles they’re facing –
especially with the knowledge that many tavern owners are the sole breadwinners of their
respective households.
Many have not had an income for weeks, and the reinstated alcohol ban has prolonged their
inability to trade.
SAB have always been big supporters of the small retailers and taverns who stock our
products, and now we’re taking that support one step further and have donated 17 000 food
vouchers to taverns across South Africa. SAB lose up to 130 million liters of beer of its
inventory during this pandemic.

2.1 PESTEL ANALYSIS

In marketing theory, we differentiate between a microeconomic and a macroeconomic business
environment, also known as the micro- and macro-environment. The micro-environment refers
to the immediate business environment: the particular industry, competitors and all
stakeholders of a company. Microeconomic business environment factors cannot always be
directly controlled, but they can always be influenced. In this sense, they are differing from
macro-environmental factors which also affect the company but cannot be controlled or
influenced by it.
The macro environment is part of the external environment, and includes political, legal,
economic, sociocultural, demographic, technological, and natural environment forces at the
global level and/or within a country. These forces, whether global or related to a specific

24
country, originate beyond, and are usually irrespective of, any single organisation’s operating
situation.
Political Factors
SAB being oldest brewing company in South Africa it was battered by political crisis during the
20th century. It has emerged as a company with building its operations in emerging and mature
markets. During 1948 due to racist system of “Apartheid”, there was opposition to the company.
SAB also came across various other forces during this period. These include government
regulations and legal issues and define both formal and informal rules under which the firm
must operate; these in SABMiller’s case are as follows, South Africa’s political stability, import
taxes, company taxes, environmental regulations, employment laws.
Economic Factors
Affect the purchasing power of potential customers and the firms cost of capital; these in
SABMiller’s case are as follows, the volatility of the exchange rate, high inflation rate, slow
economic growth and high interest rates. AB InBev (SAB) report (2019) highlights the softer
consumer demand in several key markets due to challenging macroeconomic conditions,
including Argentina, Brazil, South Africa and South Korea. The organization has put in place an
affordability strategy in emerging markets by offering more accessible price points to
consumers, creating new packaging formats and introducing beers brewed with local crops. For
an example SAB launched Impala Cervejas in Africa and was 1 st commercially produced
cassava beer in 2011 using the local crop in order to close the gap for this price increase.
Social Factors
Include the demographic and cultural aspects of the external macro environment. These factors
affect customer needs and the size of potential markets; these in SABMiller’s case are as
follows, Change in consumption pattern, Consumers becoming heath conscious, consumers
becoming safety conscious, consumers becoming career minded and the population growth
coupled with age distribution and class structure. SAB Responsible Drinking Goal is to
accelerate the Global Smart Drinking Goals and reduce harm caused by the misuse of alcohol
in our communities. And focus areas include Road Safety, Underage Drinking and
Volunteerism.
Social Norms - Global investment of 1B USD to influence social norms and individual behaviors
by ensuring that the social marketing campaigns are aligned to smart drinking principles.
Alcohol Health Literacy – Place guidance labels on all our beer products and increase alcohol
health literacy.
Our dream for Road Safety is to reduce fatalities on South African roads. SAB aims to upgrade
10 Alcohol Evidence Centres across South Africa.

25
As part of its ongoing #RESPONSIBLETOGETHER campaign, aimed at creating awareness
and education on the impact of the irresponsible use of alcohol and the effects of harmful
behaviour, the South African Breweries (SAB), in partnership with the Gauteng Provincial
Government, unveiled a series of outdoor murals designed by renowned local Illustrator,
graphic designer and art director, Kgabo Mametja.
Technological Factors
Can lower barriers to entry, reduce minimum efficient production levels and influence
outsourcing decisions; these in SABMiller’s case are as follows, Research and development,
automation, technology improvements.
Environmental Factors
SAB plc embraces the obligations of corporate citizenship towards the environments in which it
operates, and the duties of care owed to present and future co-citizens.
Accordingly, SAB policy will seek to conduct its activities wherever located with complete
commitment to international best environmental practice, not least by conforming to applicable
jurisdictional regulation on the environment, health and safety.
In order to further this policy, SAB policy will:
● Align its risk management and control practices to take account of local conditions, while
setting minimum standards and improvement targets.
● continuously monitor the impact of the movement and use of materials, energy, facilities and
other resources in its operations on communities and the environment.
● Implement natural resource conservation programs, particularly of water usage in its brewing
operations.
● Promote recycling initiatives in its businesses and the community, particularly of used
packaging materials.
● Adapt and implement technologies to limit and reprocess effluents, emissions and waste,
including refrigerants, and to rehabilitate resources as required.
● Locate new facilities within the parameters of environmental impact assessments.
● Communicate openly with stakeholders regarding environmental planning and material.

SWOT ANALYSIS OF SAB

STRENGTHS:

 Very strong in local market.

 Excellent portfolio and a large brand.
 High operational productivity.
 Different skills to succeed in developing markets.

26
 Economy scale is extremely high due to large market shares in some markets.
 Strong distribution channels and global networking.

WEAKNESSES:

 Tendency of acquisitions.
 Dependability over the Soft currency.
 Expertise limited to the brewing industry only.
 Government acts as a key player, as main market are in highly volatile areas like Africa
and Asia.

OPPORTUNITY:

 Strongly growth of emerging markets.

 It is easy for SABMiller to buy in to a market with the help of highly fragmented
developing mark

THREATS:

 AIDS problem in South Africa.

 Constantly rising cost of energy and aluminum affects the SABMiller profitability.
 Strong competition in countries India and China.
 SABMiller got affected adversely due to the new trends like wines and spirits.
 Covid19 pandemic
 Legal Barriers: There are a lot of legal and ethical barriers to selling alcohol anywhere in
the world. These barriers need to be broken apart before the company enters into a foreign
market.

INDUSTRY ANALYSIS

Industry analysis is a market assessment tool used by businesses and analysts to understand
the competitive dynamics of an industry. It helps them get a sense of what is happening in an
industry, e.g., demand-supply statistics, degree of competition within the industry, state of
competition of the industry with other emerging industries, future prospects of the industry
taking into account technological changes, credit system within the industry, and the influence
of external factors on the industry.

27
It simple helps the company identify and threats and opportunities which is key to the survival of
the business in the ever-changing business environment. Businesses like SABMiller use three
industry analysis tools to evaluate their positions in the business environment these three are
(a) Broad Factors Analysis (PEST Analysis)
(b) SWOT Analysis
(c) Competitive Forces Analysis (Porter’s Fives Forces Analysis)

Michael Porter developed the Competition Focus Analysis. According to Porter, in his 1980
book, “Competitive Strategy: Techniques for Analysing Industries and Competitors” the analysis
of these five forces paints a clear picture of the industry environment and makes analysis
easier. These forces are; 1 Intensity of industry rivalry, 2. Bargaining power of suppliers, 3.
Bargaining power of buyers, 4. Threat of substitute goods/services and, 5 Threat of the new
potential entrant.

Using this Porter’s Five Forces Analysis to analyse the SABMiller strategy. This strategy to it
own benefit like in the case of the threat of new entrants. Instead of defending its territory,
which it had already saturated in went out the other territories of brewers who were not aware of
the threat of the new entrance while the market was open wide for exploitation. A good example
is the Eastern Europe, which was fast developing after the fall of the Soviet Union. The
developing counties made it easier for SABMiller to the industry. While it was easier for it to
enter the industry it used the same strategy to make it difficult for new entrants in South Africa
by dominating the distribution channels and creating a good relationship with the tavern which
are their biggest product seller’s threat of potential entrants

SABMiller uses is developing 161 small barley farmers in Taung. This reducing the bargaining
power of its barley suppliers, a key ingredient in the brewing of beer. If the industry relies on a
small number of suppliers, they enjoy a considerable amount of bargaining power.

While it has reduced the buying power of its supplier, SABMiller on the other had it uses its own
influence its bargaining power when buying from the supplier it supports. However, the buyers
of its products have no power to bargain with it as it has no stronger competition in the
developing countries, particularly in South Africa where it also provide support to tavern owners.

The threat of substitute goods

28
The industry is always competing with another industry producing a similar substitute product.
Hence, all firms in an industry have potential competitors from other industries. This takes a toll
on their profitability because they are unable to charge exorbitant prices. Substitutes can take
two forms – products with the same function/quality but lesser price, or products of the same
price but of better quality or providing more utility.
Intensity of industry rivalry
The number of participants in the industry and their respective market shares are a direct
representation of the competitiveness of the industry. These are directly affected by all the
factors mentioned above. Lack of differentiation in products tends to add to the intensity of
competition. High exit costs such as high fixed assets, government restrictions, labour unions,
etc. also make the competitors fight the battle a little harder.

3.3.3 In considering the strategies of each of this organization, do we think there is

something unique to developing countries? If so, please explain.

COST LEADERSHIP:

Cost leadership is establishing a competitive advantage by having the lowest cost of operation
in the industry. Cost leadership is often driven by company efficiency, size, scale, scope and
cumulative experience (learning curve). A cost leadership strategy aims to exploit scale of
production, well-defined scope and other economies (e.g., a good purchasing approach),
producing highly standardized products, using advanced technology.
Successful Execution of the Cost Leadership Strategy - This section discusses the
activities and policies that have shown success in the use of the cost leadership strategy. The
value chain analysis (presented in Chapter 4) proves to be a critical tool for firms implementing
a low cost strategy. Each of the five forces of competition is then discussed as it relates to a
cost leadership strategy.
Competitive Risks of the Cost Leadership Strategy - defines some of the risks faced by
firms that select a cost leadership strategy.
a. Processes can become obsolete.
b. Focus on cost reductions can be at the expense of understanding customer perceptions and
needs.
c. Strategy could be imitated, requiring the firm to
Increase the value offered to retain customers.

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DIFFERENTIATION STRATEGY
This section introduces an analysis of the strategy of differentiation that pursues a fairly broad
competitive scope while serving a broad customer segment.
Successful Execution of the Differentiation Strategy
Target customers who perceive that value is added by the manner in which the firm’s products
are differentiated.
Be able to produce non-standardized products at competitive costs.
Have a thorough understanding of what their target customers’ value, the relative importance
they attach to the satisfaction of different needs, and for what they are willing to pay a premium.
Be different from competitors on as many dimensions as possible.
Competitive Risks of the Differentiation Strategy
a. Price differential for the differentiated product may be perceived to be too large.
b. Firm’s means of differentiation may cease to provide value for which customers are willing to
pay, particularly if rivals have successfully imitated the firm’s strategy.
c. Experience can narrow the customers’ perceptions of the value of a product’s differentiated
features.
d. Counterfeit goods might appear in the marketplace.

FOCUS STRATEGIES - This section introduces an analysis of the focus strategy that seeks to
serve a market niche through the core competencies of an organization.
a. A particular buyer group, such as youths or senior citizens.
b. A particular product line segment, such as professional painters or “do-it-yourselves.”
c. A different geographic market, such as the South Easter U.S region or a local market.
Focused Cost Leadership Strategy - This section provides examples of Ikea and Morgan
Lynch using focused cost leadership product and service strategies respectively. Focused.
Integrated Cost Leadership/Differentiation Strategy - integrated set of actions designed by a
firm to produce or deliver goods or services at an acceptable cost that customers perceive as
being different in ways that are important to them.
Successful Execution of the Integrated Cost Leadership/Differentiation Strategy
a. Evidence suggests a relationship between use of an integrated strategy and achieving
above-average returns.
b. Businesses that combine multiple forms of competitive advantage in low-profit-potential
industries are shown to outperform businesses that compete with a single form.
Competitive Risks of the Integrated Cost Leadership/Differentiation Strategy

30
Failure to establish a leadership position can result in a firm being “stuck in the middle” and
unable to create value, and unable to earn above-average returns.
SAB - Product Development - SAB’s strategy can be agile in responding to the market
through new product development. There is a growing need for Non-alcoholic beverages and
targeting these products will present great opportunities to SAB. New Premium beers as well
as Craft Beer are also growing in demand and strategy should be to produce products that
meet current customer needs using the latest technology available.
Strategic Partnerships: SAB uses a lot of acquisitions and partnerships in entering new
markets. While this strategy is useful in breaking barriers to entry, it dilutes SABMiller’s
offerings in the product range. A product may have to change its composition or name so that it
does not clash with another product that new partners may have interest in. In controlling the
partnership, however, SAB may be able to shape the products and offer them the way that is
suitable to SABMiller’s stakeholders.
Supply Chain: Diversifying into industries whose products are inputs to SABMiller’s products.
This way SABMiller will support businesses that are core to its brewery business.

4 CONCLUSION

SAB Miller, Lion Match and Bakers Limited are companies that have been in existence for over
100 years and been growing in most recent years in terms of their footprint local and
internationally, adding more product on their production, and their market share price has been
stable on the positive. They all have in different degrees embraced Fourth Industrial Revolution,
but could still improve and exploit technology more to solidify presence in the market. Based on
their line of business, their target market might be different and their respective approach in
marketing might be different, but can still share some common purpose in addressing social
economy and upliftment of the communities. As the world becomes smaller due to information
accessibility through technology enhancement, SAB Miller, Lion Match and Bakers Limited
must increase their level of innovative ideas, continuous learning and improving their resources
and systems, embrace technology to the maximum, partnering with communities and
environmental sustainability to remain relevant, and maintain their leadership status in their
respective industries in future.

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