PHASE THREE: LEVERAGE 2005 ONWARDS
Business Focus: Leverage our scale to drive further growth
Marketing Challenge: To build local and international brands that are consumers first choice
SABMiller ended 2005 with the second of its massive acquisitions, purchase of Bavaria SA, South America’s second largest brewer. Operations in 4 new countries – 12000 new employees joined the group.
To date, our company has been responsible for 2 of the three biggest acquisitions in the history of the industry. In six years we have achieved sufficient global scale to leverage as a driver of future growth.
Brands now sit firmly at the centre of the organisation with every senior manager linked by a shared new mission – develop a market facing, brand led organisation that is learning and self refreshing.
RESPONSE: MARKETING MATTERS
Marketing Capability response: Extend the scope of marketing capability building beyond just the marketing community to entire organisation
Results: Too early – but watch this space!
The strategy now has two parts - build marketing capability:
- across the organisation in all functions
- in our marketing teams to equip them to become major contributors to business success
A recent survey of our senior managers, identified The Marketing Way as one of only three processes they would "pack in my suitcase" if sent to set up a new SABMiller operation. Alongside operational excellence and performance management, marketing is now part of our DNA.
Until now adoption of our marketing processes has been voluntarily. No mandates to force implementation and no "policing". They are used because they add value. However, to leverage our global scale, some stakes do need to be put in the ground.
So, our continuing work programme, fully supported by Executive Committee and business leadership, includes:
- Another revision of The Marketing Way to ensure it remains relevant and fresh.
- Selectively determining those parts of The Marketing Way that will become mandatory
- Developing jointly with central Group Strategy team a new business strategy and planning process with brands at their centre
- Leading edge work on brand adoption and premium brand development
- Developing jointly with Group HR team a Strategic People Resourcing programme focused on attracting, developing and retaining world-class marketing talent
- Setting up a network of Regional Marketing Learning managers who will support our global agenda but interpret, supplement and implement it at local level
- Introduction of multi methodology learning programmes for Communications
- E-learning pilot
- Development of commercial skills
- "Introduction to Brand Building" for broader organisation
HAS IT BEEN COST EFFECTIVE?
In all honesty, it is still too early to truly assess.
However, our total investment to date in centrally driven market initiatives has been supported by:
- A budget of less than £5 million over the five year period
- A team that has grown from one member to five
Our success can be measured by:
- 500 copies of The Marketing Way have been distributed across the business.
- 70 case studies submitted to Mercatus Awards in 3 years. (Our independent judging panel says quality is improving each year.)
- 20 markets have used standardised approach to market segmentation.
- All our brands use a common positioning tool and a standard scorecard
- Marketing experts are core members of any M&A team.
- 631 registered members of marketing intranet (only launched in Sept 2005). Average of between 1000 – 1500 hits per month.
- Over 90% of our brand management teams have attended at least two of our marketing learning programmes. Virtually every local market has increased its programme budget.
- All Executive Committee members and increasing number of general managers have attended an introduction to marketing programme
- 4 of local Brand managers from 1999 are now in senior marketing roles
It feels like a pretty good return for £5 million.
KEY CONTRIBUTORS TO SUCCESS
1. Everything is developed in direct response to achieving business objectives.
2. Senior management from the Chief Executive Officer down support the programme.
3. Group Marketing Director keeps focus at senior levels on brands, marketing and our need to become world class
4. A dedicated resource, centrally and locally
5. The marketing community own it. Everything is developed jointly.
6. Fewer processes that still allow big ideas to flourish!
Five short years and our business has transformed into a global player that celebrates brands and embraces marketing. Building marketing capability is no longer just a functional initiative, but rather a business imperative.
SABMiller Mergers and Acquisitions (source: SABMiller Corporate Website)
• SABMiller acquires a majority interest in Bavaria S.A., South America's second largest brewer.
• Through its local subsidiary, Mysore Breweries, SABMiller announces acquisition of Shaw Wallace & Company's share of its joint venture in India, and, in the process becomes the country's second largest brewer.
• SABMiller announces acquisition of Topovar brewery in Slovakia.
• CR Snow, SABMiller's joint venture partner in China, acquires Fuyang City Snowland Brewery.
• Gains entry to Morocco and Algeria through Castel joint venture.
• SABMiller associate, China Resources Breweries Limited, acquires two Chinese breweries to strengthen foothold in Anhui province.
• SABMiller accepts an offer of HK$5.58 that Anheuser-Busch made for shares in Harbin Brewery.
• SABMiller's Polish subsidiary, Kompania Piwowarska, aquires a 98.8% equity interest in Browar Dojlidy (Bialystok, Poland).
• First significant SABMiller investment in Western Europe through key Italian market as SABMiller acquires a majority interest in Birra Peroni S.p.A.
• SABMiller makes a strategic investment in Harbin Brewery Group and acquires a 29.6% stake.
• SABMiller plc formed as SAB plc acquires 100% of Miller Brewing Company (2nd largest brewery in United States by volume) and changes its name to SABMiller plc. Upon the acquisition, SABMiller becomes the second largest brewer (by volume) in the world.
• Turnover from SAB's international operations now accounts for 42% of group turnover, a remarkable achievement in a relatively short period.
• A pan-African strategic alliance with the Castel group offers the opportunity to invest in promising new African markets and the benefits of scale economies.
• SAB acquires a controlling 83.7% interest in Bere Timisoreana S.A., Romania.
• SAB became the first international brewer to enter Central America when it acquired Honduran brewer, Cervecería Hondureña; also, formed a joint venture with El Salvador Beverages Business, a brewery and soft drink distributor.
• Total sales of beer and other beverages reached 77 million hectolitres – about 44 000 "drinks" or 300 ml every minute.
• SAB enters Indian market by acquiring Narang Breweries.
• SAB moves its primary listing back to London, raising £300 million in international markets. The strategy is to develop and expand its international beer and other beverage operations and to invest in the rapidly-growing gaming industry in South Africa. SAB is a FTSE 100 stock.
• SAB acquires controlling interest in Pilsner Urquell and Radegast, the leading brewers in the Czech Republic.
• Kompania Piwowarska S.A. formed following the merger of Lech Browary Wielkopolski S.A. in Poznan and Browary Tyskie Górny Slask S.A. in Tyche.
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