Big Lion Small Cage essays

Big Lion Small Cage essays South African Breweries dominates its home market, because the firm is capable of meeting the markets abnormal demand. Several foreign companies have tried to enter the market, but failed because of SABs low-price strategy. It has increased productivity by cutting 7.000 jobs in the past ten years and by hard negotiations with the inflexible trade unions. Despite rough roads and bad electricity supply, SABs distribution net is highly developed and refrigerators and/or generators are put at its distributors disposal. Most of the beer in South Africa is sold via unlicensed pubs, called shebeens. Although they are illegal, SAB supplies them with alcohol through wholesalers. To compete successfully with SAB, foreign investors would have to build big breweries and to set up competitive distribution channels. But the market is growing too slowly to be worth the money. As scope for expansion is limited in South Africa, the brewery has started to acquire competitiors in the rest of Africa, Central and Eastern Europe and in China. Although it is the worlds fith-largest brewery by volume, it hasnt yet succeed in turning into a global player with global brands. SAB tried to enter the first-world-beer-market by acquiring a British brewing group but failed at the price. Because buying a brewery involves many bidders, brands, already established in the market, can offer a higher price, for the chance to swallow a competitor. One opportunity to enter the global market is sill left over: to be a takeover target itself. ...