GROUP

1) Deicy Mayerli Garzon

Rodriguez
A00294447
(dgarzonr@mycambrian.ca)

2) Moshood Gbadamosi
A00279114
(mgbadamo@mycambrian.ca)

3) Apeksha Sanjay Haria

A00288411
(aharia@mycambrian.ca)

4) Disha Rajeshbhai Jethava

A00278575
(djethava@mycambrian.ca)

5) Simranjeet Kaur
A00279639
(skaur524@mycambrian.ca)
Group 3

AB InBev and
SABMiller: A Match
Made in (Beer)
Heaven?
QUESTION 1: Why are AB InBev, Heineken, and other global brewers targeting emerging markets such as
Vietnam?

Answer: Many global brewers, including AB InBev and Heineken, are turning their focus towards emerging markets
such as Vietnam because these markets present several compelling factors for brewers, such as an expanding middle-
class population and rapid economic growth, which creates new consumer segments with increased purchasing power.
Rising incomes and evolving consumer lifestyles have led to an increase in beer consumption, making it an attractive
option for a wider consumer base.
Moreover, some emerging markets have fewer established competitors compared to saturated markets in developed
countries, providing an opportunity for brewers to enter and establish themselves as prominent players. As mature
markets reach saturation and growth slows down, global brewers are seeking new avenues for expansion to maintain
market leadership. Emerging markets offer substantial growth potential, providing strategic diversification for these
companies.
Furthermore, the regulatory environment in emerging markets may be more conducive to market entry and operation
than in developed markets, reducing regulatory barriers and facilitating the entry process for international brewers.
Brewers must understand and cater to local preferences in emerging markets, as beer consumption often reflects
cultural traditions and social norms. Cultural considerations are therefore important when targeting emerging markets
to gain acceptance and loyalty among consumers.
In summary, targeting emerging markets is consistent with the growth strategies of global brewers, allowing them to
capitalize on new opportunities and expand their presence internationally.

QUESTION 2: Is the brewing industry local or global?

Answer: The brewing industry is located as local and global both, while the production and distribution of beer often
involve local and regional elements, major brewing companies operate on a global scale. Local breweries cater to
specific markets, taking into consideration local preferences, traditions, and cultural nuances. Many craft breweries
exist. For example, focus on serving their immediate communities or regions, emphasizing unique flavors and
craftsmanship.
Apart from this, multinational brewing corporations like AB InBev and Heineken have a global presence forsure.
These companies invest in emerging markets to tap into new consumer bases and growing demand for beer and they
adapt their strategies to check and be in local tastes and preferences while leveraging their global scale for production,
distribution and marketing.
In summary, the brewing industry exhibits dual nature with both dimensions. Regional cultures are reflected in the
diverse offerings of local breweries, while global brewing giants operate internationally to expand their market reach.
Question 3: Why do so many licensing deals, mergers, and acquisitions occur in the brewing industry?
Answer: Like many other industries, the brewing sector encounters a critical volume of mergers, acquisitions, and
license agreements because of multiple factors.
a) International Growth: Breweries frequently look to grow internationally to enter new markets and attract a
larger customer base. They can enter new business sectors without making huge interests underway,
circulation, or foundation by authorizing.
b) Enhancement of Portfolio and Brand Recognition: Access to a wide range of items and well-known brands
can be obtained through licensing agreements. For SABMiller's situation, securing Mill operator Fermenting
from Philip Morris assisted them with extending their portfolio and gave them admittance to notable brands
like Mill operator Light.

c) Market Share and Market Penetration: Businesses use mergers and acquisitions to expand their market shares
and reach new markets. In the preparation business, importance is emphasized in key industries to attract
new customers, especially in the younger age group, such as SABMillerand's entry into the US market.
 d) Economies of Scale: By combining with or purchasing other brewing businesses, you may be able to take
advantage of economies of scale, which can save you money on marketing, distribution, and production
expenses. This is basic in an area where cost-and productivity viability are significant.
e) Competitive Advantage: Businesses aim to obtain a competitive advantage by strategic movements in the
highly competitive brewing sector. Acquisitions and mergers can result in increased efficiency, greater
competitive positioning, and synergies.
f) Adaptation to Local Tastes and Regulations: Through licensing, businesses can modify their offerings to
satisfy regional preferences and get around tricky legal requirements in other markets. This adaptability is
crucial in a sector where rules and customer preferences are highly variable.
g) Risk diversification and mitigation: Purchasing or merging with other businesses can help spread risks and
increase the variety of sources of income. This is crucial for a sector of the economy that could encounter
difficulties from shifting customer preferences, shifting laws, or recessions.
h) Technology and Innovation: Buying organizations can give admittance to state-of-the-art fermenting
strategies, advances, and innovations. Keeping up with seriousness is basic in an industry where purchaser
patterns and inclinations change rapidly.
In conclusion, the brewing industry employs well-thought-out strategic actions like licensing and mergers and
acquisitions to expand internationally, enhance portfolios, increase market share, take advantage of economies of
scale, adapt to local conditions, and maintain a competitive edge in a market that is always changing.

Question 4: What is meant by the phrase global strategic partnership? Discuss how this form of market-entry strategy
differs from more traditional forms such as joint ventures?
Answer: Global strategic partnership is an international collaboration between two or more companies. To deliver
superior goods and services, they combine their resources and expertise. Additionally, they collaborate to reach a wider
audience. Each partner company may provide money in addition to personnel, expertise, buildings, machinery, and
land. As an alternative, one party may allow the partnership to use its land for operations. The enterprises must agree
on the worth of the resources to calculate each party’s investment because these resources don’t all have a set price
attached to them. (Martin, n.d.)
A joint venture is a type of commercial structure where two or more parties come to an agreement to combine their
resources in order to achieve a certain goal. A new project or any other type of commercial activity could be this task.
In a joint venture, all parties bear joint responsibility for the venture’s profits, losses, and expenses. The initiative,
however, exists independently of the participants’ previous business endeavors. Although joint ventures are usually
created for manufacturing or research purposes, they can also be formed for other purposes. JVs can bring together
big and small businesses to work on one or more deals and projects. (Hargrave, 2023)
While reaching a particular strategic goal, such as, is the aim of both joint ventures and strategic partnerships,
launching a new product or breaking into a new market range greatly in the amount of commitment required. A join
venture is a business arrangement where two or more companies form a single legal organization, each owning a part.
In contrast, no new legal entity is formed when two companies collaborate through a strategic alliance.
To sum it up, a global strategic partnership is like when companies come together to fit the missing piece of a puzzle.
However, in a joint venture, they form a whole new company, separate from the one they already have. For example,
a global strategic partnership comes up when MacDonalds has a space in Walmart. MacDonalds needs a busier location
and Walmart needs a café inside the store to become a one stop shopping centre for customers. However, they do exist
separately and continue business separately simultaneously as well.

References

Hargrave, M. (2023, March 28). Joint Venture (JV): What Is It and Why Do Companies Form
One? Retrieved from Investopedia : https://www.investopedia.com/terms/j/jointventure.asp
Martin, M. J. (n.d.). What Is a Global Strategic Partnership? Retrieved from Chron :
https://smallbusiness.chron.com/global-strategic-partnership-17811.html
 Question 5:Which strategic options for market entry or expansion would a small company be likely to pursue? A large
company?
Answer: The strategic options for market entry or expansion can vary for small and large companies due to differences
in resources, scale, and risk tolerance. Here are some common approaches each type of company might pursue:

For a Small Company:

Start Small: Small companies often begin by focusing on a specific local area or niche market. This helps them
understand customer needs and refine their offerings.
Online Presence: They might use the internet to sell products or services beyond their immediate location, reaching
customers nationally or even globally without needing physical stores everywhere.
Team Up: Small companies can partner with other businesses to expand. This could mean teaming up with another
company for joint projects or using established partners to reach more customers.
Franchise: Some small companies grow by allowing others to open and run their businesses, known as franchising.
It's a way to expand without taking on all the costs and responsibilities.

For a Large Company:

Go Global: Large companies have the resources to enter international markets, opening branches or acquiring
businesses in different countries.
Buy Others: They can grow by buying other companies. This might be in the same industry or a related one, helping
them quickly expand their reach and offerings.
Offer More: Large companies can introduce new products or services, reaching new customers or serving existing
ones in different ways.
Team Up (Again): Just like small companies, large ones can form partnerships. By working with other big players,
they can share resources and reduce risks when entering new markets.Control Everything: Some big companies choose
to control different parts of the process, from making products to selling them. This can help with efficiency and give
them more control over the market.
In simple terms, small companies usually start local or online, team up with others, and might franchise. Large
companies often think big, buy other businesses, offer a variety of products or services, team up strategically, and
might control different parts of how things are made and sold. The choice depends on the company's size, goals, and
what makes sense for their business.