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Stock Market Lessons from SABMiller

8 June 2007 - Markets - Editor

What can beat a long glass of cold beer after an exhilarating day on the stock market?

There is just as much hard work which goes in to every can or bottle of the frothing amber liquid, as applies to other products and services. The supply chain and logistics of breweries is complex and need top management principles for efficient and effective operations. Competition is fierce as well, with devout lovers of a plethora of national and global brands. However, you can never take customer loyalty for granted for you never know when a spirited intruder may take a consumer of decades of standing away!

Global market shares are compulsions which no brewer can deny. Most Stock market observers know that domestic market risks can be daunting if you are exclusively dependant on them. Besides, the grass is always greener beyond distant shores! This applies not just to breweries but to other sectors of the FMCG (Fast Moving Consumer Goods) world as well. However, any enterprises which deals with large numbers of consumers, faces major obstacles to entering exotic territories with new ethnic groups, languages, cultures, and tastes.

The stock market is familiar with the brand acquisition model of market expansion in the breweries business, and in related FMCG sectors. Top domestic brands present opportunities and challenges at the same time. Retaining local appeal, while transferring global values, is a delicate balancing act. Many erstwhile domestic beverage champions are known to have fallen by the way side after acquisition by global majors.

Not so with SABMiller: this brewery darling of the stock market has developed an ingenious model for its inorganic growth initiatives. The group offers such generous local autonomy that consumers at large may not even know that their brand is owned abroad. A typical example of this is how SABMiller renames some local brands: the local term for ‘brewery’ is tagged to a top domestic brand.

SABMiller is not just a leader of the global breweries business but has set new stock market standards for balanced cultural and operational integration of its acquisitions. Poland, Slovakia, India, and China, have been some of the successful new segments tackled until now by the dynamic group management team. You may not know which country will be next, but you are on the right track if you own SABMiller shares!


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