Strategic Analysis of Anheuser-Busch

Established in 1864 after Adolphus Busch joined a fledgling brewery, Anheuser-Busch is company which manufactures, distributes and markets beverages. The company has 12 operating breweries in the United States and more overseas. The company focuses its strategies on adding value to life’s enjoyment through theme park entertainment and packaging efforts. The success of Anheuser-Busch can be attributed to the company being bold, savvy and its commitment to creating and maintaining high quality standards. The company has sister concerns in the St. Louis based aluminum beverage container manufacturer and recycling plant.  Aside from this the company also invests in the production of malt, rice, turf farming, package labeling-printing, bottle production, transport sector and real estate development. Anheuser-Busch holds a 48.8% market share in the United States with its leading brands Budweiser and Bud Light.

Company Vision

The company’s current vision is to “Add to the life’s enjoyment through its products, services and relationships.”

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Company Mission

Anheuser-Busch is a company which is committed to proving the highest quality beer at the most affordable price. The company aims to exceed customer expectations with its quality products and whereby guarantee customer satisfaction.

Company Objectives

Anheuser-Busch Company has developed the following objectives for its operations:

• Recognize and identify the different beverage needs of its diverse customer base
• Broaden the beer product-line according to the tastes of its valued customers
• Expand globally in order to tap into unreachable and unexploited markets
• Devote all resources towards growth and profitability
• Use the comparative advantage that the company has in the market to successfully market the product to reach to its customers.
• Devise competitive distribution system to effectively provide the product to the target market.
• Attain the position of being the most successful brewery in the world.
• Maintain the current customer oriented organization culture and be a quality focused brewer.
• Respect the Code of Conduct and engage in moral and ethically sound organizational practices in order to remain a socially responsible citizen.

Company Values

The Anheuser-Busch company establishes its values with the following efforts:

• High quality in all its operations
• Going beyond customer expectations
• Creating and maintaining trust, respect and integrity in its relationships with business partners, stakeholders, customers and affiliations
• Being a source of continuous improvement, and innovation
• Encouraging teamwork and honest open communication
• Making each employee responsible for contributing to the company’s success
• Creating a safe, productive and rewarding work environment.
• Creating a high-performance based, diverse workforce
• Promoting responsibility in its customers
• Preserving the environment and supporting local communities

Current Strategies

Anheuser-Busch has been successful by maintaining it’s carefully executed two sided strategy to expand the Budweiser brand globally and create strong partnerships with the  leading brewers around the world. The company has focused its marketing efforts to enhance the image and the importance of beer, and creating its brands as the beers of choice for the people.

The company strives to be innovative in its efforts and product offering. This forms a significant part of the business’s strategy. The company’s production strategy is based on both contracted brewing, which utilizes the excess capacity of other breweries, and with brewing at its own breweries. This strategy provides the Company with flexibility in addition to quality and cost advantages.

In order to capture the growing beer market in China the Company has developed the strategy to capitalize on the quality and popularity, strength and the image of the company and its beer (Harbin, which is available in China). The Anheuser-Busch Company and its subsidiaries have adopted a commitment to quality as the central strategy for its operations. The pricing strategy being used by Anheuser-Busch is to keep prices low and affordable for its consumers while slightly increasing the price of the beer in relativity and allowing for moderate level increments in price in the future. As a result the beer is much cheaper today than it was 10 years ago.

Other important components of Anheuser- Busch’s business strategy are the advertising and promotional activities for its beer brands and theme park operations. The company uses national, regional and local medium available to market its brands and the Anheuser theme parks. Some of the strategies employed take form of television advertising, radio advertising, promoting through the Internet, print and outdoor advertising and organizing event sponsorships.  Also read HP strategy analysis

A large part of the company’s business strategy is caring for its customers and being a responsible corporate and social citizen. In its efforts the company has taken the following steps in the past years: Anheuser-Busch is collaborating with its wholesalers in order to fight against drunk driving and underage drinking for the promotion of socially responsible behavior and drinking responsibly. Designing and implementing corporation wide policies to protect the environment and supporting conservation organizations. The company attempts top reach out those in need of financial support and contributes to the community and charitable organizations. The company invests in educational institutions to increase the skill and knowledge set in the communities. The company supports and provides grants to the organizations which help build and strengthen families, and alleviate health issues. The company gives out grants for societal and community development.

Anheuser-Busch strives to enrich and enhance quality of life and promote joy by promoting cultural activities that increase cultural understanding. The company provides scholarships and funds for those students who are in need of financial assistance through its Anheuser-Busch Foundation. The company also strives to improve the quality of life for its employees by developing the communities where its employees reside and establishing a Employee Volunteer Fund, through which it provides education and training to those employees who are unable to support themselves.
In order to provide fast disaster recovery the company has provided humanitarian aid and established relief programs for the victims of hurricane Katrina & Rita, and the chemical spill at Harbin and Songjiang, China.

Recommendations

After conducting the analysis of Anheuser-Busch’s strategies and operations it has been determined that the company can gain strategic advantage in the international market by focusing on the following strategies.

• Promoting globalization in the company
• Evaluating and determining the best suited e-commerce options available
• More product innovation specifically for the customers in the international market
• Tracking the operations and strategies of Mills & Coor
• Tracking the operations and strategies of significant competitors in the global market
• Determine the overall capability of the company
• Investigate the changing global lifestyle of the customers.

The current strategies were lacking focus in the some fields. These fields have been highlighted below and recommended strategies have been provided as: The company can perform backward integration to establish better relationships with its suppliers by investing in e-commerce. The direct interaction between the suppliers and the company would mean greater efficiency and control.

The company can also perform forward integration in its supply chain to establish a closer relationship with its wholesalers and retailers. The company would be able to control the operations as well as come closer to its customers and therefore be better able to understand them and drive innovation. The e-commerce option would also pose as a convenient medium for interaction with the wholesalers and retailers in the global market outside US.
Implement a reward system for the stakeholders in the international distribution system. This would help implement wholesaler loyalty on a global level as well. The organization can change its current employee structure and provide training to cater for cultural diversification in its workforce. This would enable diversification in the generation of ideas and innovations in the company as well as help the company understand its diverse customer base in a much better way.

The current position of the Anheuser-Busch is very strong with huge growth potential. No drastic changes need to be made to the current strategies but more value adding and diversification would prove to be beneficial for the company in the long run.

References

1. Anheuser- Busch Annual Report, (2005) available at: http://www.anheuser-busch.com/investor_relations/report_annual.html
2. The Nature of Strategic Management, available at: http://www.mktgandmgmt.utep.edu/smanagement/chap06.ppt
   Strategy and Policy Tools for Cases, available at: http://www.kulzick.com/stu/casether.htm
3. Strategic Audit for Miller Brewing Company, available at: http://www.gwu.edu/~crn40013/strataud/Miller.htm
4. Anheuser Busch Company’s corporate website, http://www.anheuser-busch.com/
5. Budweiser website, http://www.budweiser.com
6. Anheuser-Busch’s Programs to prevent Alcohol Abuse and Drunk Driving, available at http://www.beeresponsible.com
7. Edmunds, Karl, (2003) The Challenges of Staying on Top: A Strategic Look at the Continued Ascent of A-B - Distributor-Supplier Forum - Anheuser-Busch, available at: http://findarticles.com/p/articles/mi_m3469/is_46_54/ai_111697285

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