Anheuser Busch/Sabmiller - Drivers Of Competitive Behavior

CHAPTER 5

A Model of Competitive Rivalry

Anheuser--Busch/

1. Drivers of Competitive Behavior--what drives your behavior?

a. Awareness

i. According to Hoovers.com, the "Industry Forecast" for both Anheuser--Busch and SABMiller predict to have the output of US breweries to forecast a growth at an annual compounded rate of 3.1 percent between 2007 and 2012 (Hoovers 1&2).

1. Both Anheuser--Busch and SABMiller have a joint awareness that has increased as they use similar resources to compete against each other for dominant positions in European, South American, Asian, and North American markets. Awareness for both powerhouses has increased and it affects the extent to which each company understands the consequences of competitive actions.

ii. A--B has increased its awareness of SABMiller ever since SAB purchased Miller in 2002. Since 2002, SABMiller has become the world's largest brewer in 2008, surpassing, InBev, Anheuser-Bush, and Heineken (Hoovers1). Furthermore, A--B has seen reports on the tight stronghold SABMiller has with operations in more than 60 countries. A--B has also seen SABMiller's dominance in South Africa, and has closely monitored SABMiller's market commonality and Resource similarity. The reason for this is due to the fact that SABMiller has an incredible upper hand with the brewing strength of Africa's best-selling beer, Castle Lager and brews other regional brands, including Hansa Pilsener.

iii. A--B does recognize the degree of their mutual interdependence with SABMiller in the following categories as well:

1. Wines, spirits, and energy and fruit drinks.

2. Yet, SABMiller has taken the competition a step further and teamed up with Coca-Cola to provide the bottling of Coca-Cola products.

iv. A--B does recognize that SABMiller his constantly looking to acquire more breweries to expand into new markets. Numerouse reports are coming out that SABMiller wants to be apart of the Asian and Southeast Asian markets. Furthermore, A--B noticed that SABMiller was close to acquiring Scottish and Newcastle; but, ruled itself out of making a rival bid for Scottish & Newcastle after Heineken concluded the buyout instead.

v. SABMiller has increased its awareness with A--B ever since A--B began to overwhelmingly gain a stronghold in advertisements in the United States. A--B wants to be the life of every party, whether with its brews or its theme parks. SABMiller will always have a close watch on A--B due to the fact that A--B is one of the world's largest brewers, the company is best known for Budweiser and Bud Light, as well as such labels as Busch and Michelob. SABMiller also recognized the market commonality when A--B beers lead the US with a market share of some 48%. In addition, A-B also owns a 35% stake in Mexico's top brewer, Grupo Modelo, maker of Corona and Negra Modelo.

vi. SABMiller does recognize the degree of their mutual interdependence with A--B in the following categories as well:

1. Energy drinks and non-alcoholic malt beverages.

2. Busch Entertainment theme-park business.

vii. Another area SABMiller is closely watching is a recent article on Anheuser-Busch website. The statement was simple; it described how A-B announced Budweiser as the