Assignment

Overall Marks:
UNIVERSITI TUNKU
ABDUL RAHMAN FACULTY OF
ACCOUNTANCY AND
MANAGEMENT
ACADEMIC
YEAR:
2015/2016
OCTOBER
2015
TRIMESTER
UKMM1011 SUN ZI’S ART OF WAR & BUSINESS
STRATEGIES

ASSIGNME
NT COVER
SHEET

Subject Code:
UKMM1011

Subject Title: SUN ZI’S ART OF WAR & BUSINESS

STRATEGIES

Lecture Group: L4 (Thu, 8 am – 10 am)

Assignment Details:

Company : Anheuser-Busch Inbev

Product : Brewing and Beverage

Word Counts : 4324

Due Date : WEEK 7, DURING LECTURE

Student’s Name Student ID No. Course Year and Sem

(Arrange by alphabetical order)
1. Cheng Chia En 1405359 AT YIS2

2. Geoffery Cheng Wi Jen 1203326 IB Y3S2

3. Li Li Min 1501155 AT YIS3

4. Lim Su Ann 1400176 AT YIS3

5. Shirley Ling Shi Hui 1404315 AT YIS2

6. Tan Chin Xian 1500766 AT YIS3

7. Tan Yan Rou 1400739 AT YIS3

Appendix A
 Appendix B

UNIVERSITI TUNKU ABDUL RAHMAN

FACULTY OF ACCOUNTANCY AND MANAGEMENT
ACADEMIC YEAR: 2015/2016
OCTOBER 2015 TRIMESTER
UKMM1011 SUN ZI’S ART OF WAR & BUSINESS STRATEGIES

MARKING SCHEME FOR GROUP ASSIGNMENT

Assignment Assessment Marks Marks
Note: Students must only use information and facts from year 2010 onwards. Allocation Awarded

Section A: Introduction
 Brief introduction of the company. 2 marks
 Identify company’s industry, competitors and market segmentation. 6 marks
Section B: Applications 24 marks
 Identify 4 Sun Zi’s philosophies which have been used by this company and
provide facts or evidences to support your findings.
 You have to indicate specifically, which topic of Sun Zi’s philosophies and which
verse in that particular topic you are referring to when you quote your evidences.
Section C: SWOT Analysis
 Identify and explain THE RELEVANT strengths, weaknesses, opportunities and 32 marks
threats of the company (4 elaborated points for each segment)
 The RELEVANT of your SWOT analysis will depend on whether the analysis is
able to match your findings in Section D.
 Marks will only be awarded for the relevant analysis.
Section D: Findings and recommendations
 Based on the findings from the SWOT analysis recommend 3 strategies that the 21 marks
company should adopt to improve its current businesses
 You are required to link the strategies with Sun Zi’s philosophies as well.
 Zero mark will be awarded should the finding and recommendation are not
based on the matching of your SWOT analysis.
*All group members must do part C and part D together.
Section E. Conclusion
 Conclude what you have learned in this assignment 3 marks
 Section F. Executive summary of the report 7 marks
- provide a brief overview of the whole report so that allow the reader to quickly
understand the information contained in the report
- persuade the reader that the document is worthy of being read.
- provide concise, complete, specific and self-sufficient information that can be
understood in isolation.
Section G. Quality of the written assignment
 Grammar, language, in-text citation and references. 3 marks
 Creativities on group photo and CD cover 2 marks
TOTAL MARKS 100 MARKS
(-) Minus (Non-compliance to structure/formats/instructions as stated in the unit
plan)
NOTE: A total of 24 marks can be deducted from this part. Marks should be deducted (24)
from the total marks of the assignment.
MARK AFTER DEDUCTION OF NON-COMPLIANCES
Comments:

Name of marker: Ms. Cheah Lee Fong Signature: Date:

Appendix C
 UKMM1011 Sun Zi’s Art of War and Business Strategies (October 2015)

DECLARATION

We hereby declare that:

1. We have read through, understand and comply with all the

requirements as stated in the unit plan for October 2015
semester before we submit the assignment.

2. This assignment is the end result of our own work and that
due acknowledgement has been given in the preferences to
ALL sources of information be they printed, electronic, or
personal.

3. Equal contribution has been made by each group member

in completing the assignment.

Student’s Name Student ID No. Signature

(Arrange by alphabetical order)
1. Cheng Chia En 1405359
2. Geoffery Cheng Wi Jen 1203326
3. Li Li Min 1501155
4. Lim Su Ann 1400176
5. Shirley Ling Shi Hui 1404315
6. Tan Chin Xian 1500766
7. Tan Yan Rou 1400739

Date: ______10 December 2015______

TABLE OF CONTENT

Topic Page

Introduction 1-2

Application 3-6

SWOT Analysis 7-12

Findings and Recommendations 13-15

Conclusion 16

Executive Summary 17-18

References 19-20

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Part A: Introduction

Introduction of the company

Anheuser-Busch InBev (AB InBev) is the world’s largest and leading global
brewer company headquartered in Leuven, Belgium. It started by Den Hoorn brewery
in Leuven, Belgium in year 1366. Besides, since 1852, it advocates Anheuser & Co
brewery, with origins in St. Louis.

AB InBev is also one of the world's top 5 consumer product companies and
has 25% of world market share. It operates in 25 countries and sales in more than 100
countries. In 2014, AB InBev generated revenue of 47.1 billion USD and having
155000 colleagues worldwide.

AB InBev was formed by three international brewing groups which are

Interbrew, AmBev and Anheuser-Busch from Belgium, Brazil and United States
respectively. The objective of the company currently is to be the Best Beer Company
Bringing People Together for a Better World.

Company’s industry

The key industry of AB InBev is brewing beverages, selling products like

beers and soft drinks. AB InBev has more than 200 brands in its portfolio which
includes local brands such as Quilmes, Skol, Bud Light and Brahma, international
brands such as Hoegaarden, Leffe and Beck’s and global brands Budweiser, Stella
Artois and Corona.

AB InBev has more focus with the 6 of the top ten beer brands which are Bud
Light, Budweiser, Stella Artois, Corona, Skol and Brahma.

Company’s competitors

Although AB InBev is the largest brewer in the world, it also has competitors
in its market. The major competitors of AB InBev are SABMiller, Heineken,
Carlsberg and Molson Coors Brewing Company.

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 SABMiller is the largest competitor of AB InBev as it is the world's second-
largest brewer. SABMiller significant existence in Africa and operates in 10
countries. The beer consumption in Africa is less than 10 litres/year, unlike AB
InBev, who operates in Europe where beer consumption is above 60 litres/year. This
shows that AB InBev is still the leading company in brewery industry.

Company’s market segmentation

The market segmentation used by AB InBev is geographic segmentation

which divides the market into different geographical units. It operates in total seven
segments include North America, Latin America North, Latin America South,
Western Europe, Central & Eastern Europe, Asia Pacific and Global Export &
Holding Companies.

Statistics below shows the percentage of production volume contribution by

region of AB InBev in 2014. In that year, Latin America North contributed highest
percentage with 27.3% to the company’s production volume, while the lowest is
global export and holding companies with 2.1% to the company’s production volume.

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Part B: Application

Sun Zi’s Philosophy 1: Chapter 6 (Weaknesses and Strengths)

A part of Chapter 6 in Sun Zi Art of War focuses on the important of the first
mover advantage. It explains the first arrival at battlefield has great opportunities to
rest more and make better preparation against the enemy. It means the first mover in
the market will have advantage over rivals who are the late movers.

"Those who arrive first the battleground will have sufficient time to rest and
prepare against the enemy." – Line 6.1

Sun Zi Art of War translated by Chow Hou Wee

The cofounder of Anheuser-Busch company, Adolphus Busch was the first

American brewer who use pasteurization, mechanical refrigeration and refrigerated
railroad cars which was make known in 1876. He used pasteurization process to keep
beer fresh and maintain the original flavour.(Wikipedia, 2009) Before he discovered
this process, the beer was kept fresh and to avoid spoilage by icing it down in St.
Louis and ricing the beer at the icehouses built along the railroad. (Carey, 2002) He is
also the first to bottle beer greatly. In 1877, the company delivered the unpasteurized
beer in cask by special refrigerated railroad cars in order to enlarge the company’s
distribution range. (Wikipedia, 2009; Carey, 2002) This causes the demand for
Anheuser products to grow.

Furthermore, Budweiser produced by Anheuser-Busch InBev had become the

first national beer brand in America and was sold as a "premium" beer due to the
company’s capability to deliver bottled beer. Budweiser was the first one to produce
light beer and become the best-selling beer worldwide. (Wikipedia, 2009)

Sun Zi’s Philosophy 2: Chapter 9 (Movement and Deployment of Troops)

A part of Chapter 9 in Sun Zi Art of War focuses on the importance of loyalty,

discipline and trust. According to Sun Zi, with greater loyalty, higher standards of
training and discipline, it will result a stronger combat force, which is very vital for
the winning of wars.

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‘‘Thus, the general must be able to instruct his troops with civility and humanity
and unite them rigorous training and discipline so as to secure victories in
battles.’’– Line 9.74

Sun Zi Art of War translated by Chow Hou Wee

Anheuser-Busch InBev (AB InBev) supports all its employees’ rights to set up
and participate in trade unions and other firms based on their preference and to
negotiate collectively to support employees’ mutual interests. AB InBev will make
compensation, benefits, promotion, training, discipline, termination, and hiring and
employment decisions to employees based on their skill, ability and performance.
Moreover, the company also provides employees at least one day of rest period in a
week and an annual leave period. AB InBev helps employees to have a sufficient
standard of living by giving them a pay and benefits package. Besides, the company
makes an effort to make sure the level of occupational health and safety is high in the
firm. (“AB InBev Global Human Rights Policy,” 2014)

Furthermore, when other enterprises are cutting their employees’ pays, AB

InBev still intends to increase its employees’ salaries, but in one condition, workers
have to do their best and compete to get them. It is known as meritocracy. The
company also connects compensation to performance. (Volkmann, 2009)

This causes the employees to stay loyal and benefits the company. Each of the
employees gives their own views, ideas and vitality to AB InBev and this benefit the
company. Employees’ various, distinct background, and experience is the key of the
company’s continuous success. AB InBev is a nice place to work due to the
organization’s dedication to fairly provide employment opportunities, variety and
involvement. (Great People, n.d.)

Sun Zi’s Philosophy 3: Chapter 3 (Strategic Attacks)

A part of chapter 3, Strategic Attacks focus on the Rules of Competing that use
different strategies when you are at inferior or superior.

• If you are 10 times bigger than your opponents, isolate your competitor.

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• If you are 5 times bigger, go directly after their business.

• If you are 2 times bigger, divide a competitor’s market.

• If you are smaller, defend a small segment.

• If you are much smaller, move from niche to niche market. – Line 3.32

Sun Zi Art of War translated by Ralph D. Sawyer

Craft beer, one of the competitors of Anheuser-Busch InBev has made an

impact on the market share of Budweiser, one of the brands of Anheuser-Busch InBev
based on their taste and quality in the US market. The company’s beers still account
for nearly half of the 200 million barrels of beer consumed annually in the U.S., but
volumes have fallen nearly 9% over the past decade. At the same time, craft brewers’
market share has surged to more than 10%. (Mickle, 2015)

In order to compete with craft beer, Anheuser-Busch InBev (Budweiser) has

made a concerted push over the last four years to catch up with American consumers
by investing in U.S. market. Anheuser-Busch InBev has made an investment of more
than $1.5 billion in product development and sustainability efforts in its US business.
These investments were made to maintain state-of-the-art brewing processes,
environmental projects, and innovations. Anheuser-Busch InBev’s investments in its
US business have improved its volumes in the coming quarters. As Anheuser-Busch
InBev is bigger than craft beer, they choose to go directly after craft beer's business
by investing more on U.S. market based on the rules of competing by Sun Zi.
(Mickle, 2015)

Sun Zi’s Philosophy 4: Chapter 4 (Disposition of the army)

Chapter 4 on Sun Zi focus on the disposition of the army which is to defence

the market position of a company and wait for the opportunity.

“In ancient times, those who were skilful in warfare ensured that they would not
be defeated and then waited for opportunities to defeat the enemy.” – Line 4.1

Sun Zi Art of War translated by Ralph D. Sawyer

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 According to Sun Zi, a company need to build an invincible defence as a
deterrent against any overly ambitious enemy by defending the existing position while
waiting an opportunities to defeat the enemy. Anheuser-Busch InBev has built up an
invisible defence by their strong brands name and leading market position of holding
nearly 50 per cent share of U.S. beer sales. (Budweiser, 2006)

In recent year, Anheuser-Busch InBev has been associated with the popular
FIFA events in order to enhance the company's brand recognition. Budweiser, one of
the brands of the company, has been selected as the official sponsor of the FIFA 2010
and 2014. The company will have the opportunity to use its portfolio of beers by
extending local sponsorship rights to its leading brands in selected football markets,
including, but not limited to Brahma (Brazil), Hasseröder (Germany), Jupiler
(Belgium and the Netherlands), Quilmes (Argentina) and Harbin (China). (FIFA,
2011)

The association with popular event like FIFA World Cup has given the
company exposure and recognition as the events are broadcasted to millions of fans
across the world. The company is able defeat the competitor by using the popularity
of football to promote its beer brands; enhancing its top-line growth opportunities
during the event as well as post event. Anheuser-Busch InBev is the world’s largest
brewer, with a market capitalization greater than that of both Coca-Cola and PepsiCo.
While maintaining their market position by their strengths of strong brand and
operational network, Anheuser-Busch InBev has successfully waited their opportunity
to come and associate with the FIFA events. (FIFA, 2011)

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Part C: SWOT Analysis

Anheuser-Busch Inbev is a company that established with almost 160 years

until today. In this section, we will discuss about both the external analysis and
internal analysis for this company. The internal analysis which consists of strengths
and weaknesses are important for the company itself to examine the current condition
status of the company itself. However, opportunity is the external analysis of
Anheuser-Busch Inbev and also the threat of the company will faced now and in the
future. This enable the company to foreseen any factors that might be good or bad for
the company and allow the company itself to have sufficient time to take any action to
either capture the opportunity or face the threat.

Strengths

S1: Huge resources and asset

The first strength of Anheuser-Busch Inbev is that the company perceived

huge resources and asset in term of financial, human resources, management and even
brand recognition.

Right until today, Anheuser-Busch InBev had become part of the world
leading company in the beer brewer industry among the world. It provides some of
the best beer among the world such as Corona and Budweiser that is very well known
to the peoples. Hence, Anheuser-Busch InBev indeed has a very popular recognition.
Besides that, it also provides approximately 155,000 of job opportunity in its factory
as a scale of overall 25 country in the worldwide. Anheuser-Busch InBev also
perceived a very healthy income in the recent event. In the year of 2014, Anheuser-
Busch Inbev manage to reach the highest revenue earn in the brewer company for a
total of 41.7 billion USD.

S2: Strong Innovation in product research and development

Furthermore, Anheuser-Busch InBev also perceived another strength which in

the innovation of its product through research and development. In order to attract
more customer and also the market share in the industry, Anheuser-Busch InBev had
to innovate and develop more new product to the market. Currently Anheuser-Busch
Inbev has more than 200 beer brands, includes the popular global brands such as the

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Budweiser®, Corona® and Hoegaarden® and etc. Anheuser-Busch Inbev objectives
to be the best beer company bringing people to be the best world. Hence, they have to
constantly innovate their products to achieve their objectives and continue to become
the world’s leading beer brewer industry in the world. This is because continual
innovation is essential to build and enhance brand health and keep brands refresh and
relevant in the minds of consumers.

S3: Effective Strategy Implementation

Anheuser-Busch Inbev is also very good at implement effective strategy to

achieve its objectives along the way to become the leading brewer in the world.
Objectives such as produce sustainable profitable growth produce sustainable
competitive advantages to differentiate themselves from the competitors. Strategic is a
crucial essence to determine the success of a company. Strategic can be implement for
a company to reach its goal along the direction that the company desire to go
(Pirraglia,W). Hence, the strength which Anheuser-Busch InBev had which is the
effective implementation of different strategy enables the company itself to reach to
the top of the industry and also become sustainable on that position

S4: Good Human Resource Management

In addition,one of the strength of Anheuser-Busch InBev is the ability to

manage the human resource in the company to achieve sustainable competitive
advantage from its competitor. The company select the employee on three things.
First, by implementing meritocracy during the training of the employees, this allow
the company to constantly improve the performance of the employees to become the
elite of the the area that they master. Second, the company foster an informal
environment, where the CEO of the company also sits in an open office. Thus, the
CEO and the employees can communicate with each other easily and can build a
better relationship. Thirdly, promote a feeling of ownership.

Weaknesses

W1: High Market Concentration is Dangerous When Deadly Mistake Occur

Anheuser-Busch InBev is a corporation that only focus on the alcoholic

beverages. This can be a weakness for the company as the company is vulnerable to

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any competitors or environments that are not in favour to Anheuser -Busch InBev.
Besides that, by only concentrating on a market is dangerous as the company is
putting all the investments into only one basket. This might cause the company to
experience heavy losses if deadly mistake occur. For example, Anheuser-Busch InBev
will suffer lost in the market share if the customer had change their preferences into
wine consumption

W2: High Degree of Dependence on the wholesalers

Anheuser-Busch InBev is also very dependence on the wholesalers to

distributes its product to the consumer. Wholesalers such as Giant, Tesco and even
Jusco are the distributors for the company. Hence, this might causes Anheuser-Busch
InBev to suffer losses if the distributors demand a lower price as the company have no
choice but to obey to the demand of the distributors as they are the only way that the
product from the company can be distributed to the consumer.

W3: Heavily Leverage

One of the weaknesses for Anheuser-Busch InBev is due to heavily leverage

on the main product which is beer. This is because by heavily leverage the resources
and asset that the company acquired will disallowed the neither company to expand
nor growth in a normal rate. This forced Anheuser-Busch InBev to search for more
resources and assets in order to maintain the operation within the company. This will
cause the company both financially and also time due to the efforts that needed to
continuous searching for the resources.

W4: High Price for the target consumer

Anheuser-Busch InBev target consumers are the people whose age between 21
to 25 years old. However, most of the people in that range of ages that the company
target are mostly having a lower than average salary households. Hence, they do not
have the ability to purchase Anheuser-Busch InBev beer due to the high pricing that
the company had set. Hence, this might lead to losses of market shares to its
competitors as the consumer will rather choose its competitor such as Heineken and
Carlsberg rather than Anheuser-Busch Inbev.

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Opportunities

O1: Wide Distribution Network

First of all, Anheuser-Busch’s distribution network provides the company a

great competitive advantage by distribute beverages produced by other companies and
also forge relationships with overseas producers and manufacturers. .

O2: Expanding to International market

When talks about the international opportunities of the company, It began

investing in Grupo Modelo and also has a stake in Tsingtao, both of these investments
have provided Anheuser-Busch with exposure to the international markets and have
contributed significantly to its profits in recent years.

Besides, the company also has several overseas breweries and distribution
companies who Anheuser-Busch uses to manufacture and distribute the company’s
core products. Anheuser-Busch has also recently improved its international growth by
leveraging its acquisition of the Chinese brand Harbin and plans to double its
distribution of Budweiser in China. An import company of it , China Sales Co., is also
starting to import Grupo Modelo’s Corona brand this year and it is the fastest growing
beer market in the world.

Besides China market, Anheuser-Busch is also targeted India for its market’s
growth. Anheuser-Busch thinks that it is a good time to begin set up this market and
recently opened a new brewery in partnership with Crown Beers because the India
economy is actually growing strong in the middle class.

O3: Acquisition of other Companies

Moreover, Anheuser-Busch is also recently purchased Latrobe Brewing

Company, which owns the Rolling Rock brand which helps it getting more exposure
directly into the market. It has also equity stakes in Widmer Brothers Brewing
Company and Redhook Ale Brewery, Inc which has more unique and higher quality
than the product line produced by its own company.

O4: Growing demand of healthy beer

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 Last but not least, nowadays people are more and more concern about their
health. Thus, it constitute a growing demand of healthy beer .It’s an opportunity for
the company to enter new kinds of markets by recently released a series of fruit
infused beers and also a malt beverage product to specific beer drinkers. Besides that,
it also can enter to the related market such as the win industry and also other healthy
herbs alcoholic drink. This is because the society nowadays is more focus on the
health awareness rather than just purchasing any alcoholic drinks recklessly.
Furthermore, by expanding to other industry, Anheuser-Busch InBev can also
penetrate to the other market in order to maximize the profit of the company by
expanding the product variety. This is because the company itself can penetrate the
new market in a lower R&D cost as the technology implementing by the company
will be similar compare both brewery in beer and also other alcoholic beverages.

Threats

T1: Serious price war

Nowadays, Brewers Company does not use the traditional way to brew their
beverages anymore. Instead of brewing it traditionally, more and more new
technology had invented to brew the beer faster and also improve the quality of the
beer. Hence, price war might happen between Anheuser-Busch InBev and its
competitor. This is because due to continuous new technology advanced, the cost in
term of monetary and also time consumption is greatly reduce. Competitor will reduce
their price as their strategic advantage to get higher market share from Anheuser-
Busch InBev.

T2: Competitor’s growth

Anheuser-Busch InBev also directly faces its threat through its competitor.
The company’s Grupo Modelo, another large brewery in Mexico had invested heavily
on the contribution of the growth of the company. This might lead to diversification
of market shares and also intense of rivalry against Anheuser-Busch InBev. This
might also directly affect the company itself because the competitor are trying to get
the market share from Anheuser-Busch InBev through improving their company

T3: Chances of Other brewery companies unites together against Anheuser-

Busch InBev

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 Although Anheuser-Busch InBev is the world’s leading beer brewery;
however, there is a saying that “A person of high position is liable to be attacked.”
There is a possibility that other brewery companies such as Heineken, Carlsberg and
Molson Coors Brewing Company, might unites together to attack Anheuser-Busch
InBev. If this circumstance occurs, it will be hard for the company to survive in the
market.

T4: Increasing Commodity Cost

As Anheuser-Busch InBev is the world’s leading beer brewery company, it required a

lot of raw materials in order to satisfy the demand from the customer. However, in the
current economics, the commodity price had continuously increase and this might
affect Anheuser-Busch InBev suffer lesser of profit due to the increase of cost on
purchasing the commodity to produce beer.

If the situation continues, Anheuser-Busch InBev has no choice but to increase the
price of its beer and this might lead to customer choosing the substitution rather
Anheuser-Busch InBev beer for price orientation purposes. Hence, the increase of the
commodity can be a threat to Anheuser-Busch InBev.

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Part D: Recommendation

Finding 1:

S1: Huge resources and asset

W3: Heavily Leverage

O1: Wide Distribution Network

T1: Possibility of price war

Based on the SWOT analysis in the part C of assignment, it shows that

Anheuser-Busch Inbev is that company perceived huge resources and asset in term of
financial, human resources, management and even brand recognition (S1). The
weakness of heavily leverage on the main product (W3) can be overcome as it have
enough asset and resources to expand the growth of company. Thus, distribution
network provides the company a great competitive advantage to distribute beverages
produced by other companies and also forge relationships with overseas producers
and manufacturer (O1). A large number of reducing the cost in term of monetary and
also time consumption (T1) due to there is enough asset and resources to invest on
new technology advanced.

Recommendation 1:

Minimize the business expenses necessities in order to earn high profit.

“In the way, the army will have ample supplies of food and provision”-Line 2.17

Sun Zi Art of War translated by Chow Hou Wee

In the other word, Anheuser-Busch Inbev can minimise the direct cost in order
to save more profit to develop their business.

For instance, negotiate lower prices with supplies, reviewing processes and
systems to minimise wastage, and implementing additional security to reduce the
chance of theft. Besides that, they can use market research to determine if could
expand the business into new areas and find the new customer whose can help to
grow the business.

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Finding 2:

S2: Strong Innovation in product research and development

W4: High Price for the target consumer

O4: Growing demand of healthy beer

T2: Competitor’s growth

The weakness of high selling price for the target consumer (W4) can be
overcome by the strength in innovation in product research and development (S2).In
addition, there is a growing demand of healthy beer (O4), it gives an indication to the
company to invent those kinds of beer. As a result, the company can less worry about
the threat of competitor growth (T2) as the company have their competitive advantage
in the new product market.

Recommendation 2:

Expand range of target consumer by manufacturing new and healthier product

with lower price.

“Rather, they (the strategies and tactics) vary according to the

circumstances with countless possibilities.”-Line 6.56

Sun Zi Art of War translated by Chow Hou Wee

In the other words, generals should plan their strategies according to different
situations they face and cannot repeat those strategies they won in previous battle as
their will change also. To apply into the business, it means company cannot use the
same strategies for the changing environment and competitors. They must adapt the
correct and effective strategies for different circumstances.

As we mentioned above, the target consumer of Anheuser-Busch InBev are

the people who is in the age between 21 to 25,and this group of people are lack of
purchasing power for the company’s product. Therefore, it is recommended that the
company should expand their range of target consumer in order to attract more
consumers from different life stage. To achieve this aim, Anheuser-Busch InBev can
manufacture a type of beer which contain less alcohol and sodium as well as add more

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nutritious ingredients such as fruits and flowers like roselle, sweet-scented osmanthus
and chrysanthemum, and offers it at a lower price. This sort of beer can cater for a
wider range of consumer which covers from the youth to the elder people. Hence, the
company can generate more revenue from people in different life stage.

Finding 3:

S1: Huge resources and asset

W1: High Market Concentration is Dangerous When Deadly Mistake Occur

O3: Acquisition of other Companies

T3: Chances of Other brewery companies unites together against Anheuser-

Busch InBev

Since the company has huge resources and asset in term of financial, human
resources, management and even brand (S1) .Hence, it can overcome the weakness of
only focus on the alcoholic beverage make the company is vulnerable in the market
(W1).Moreover, the acquisition of others companies (O3) can reduce the chances that
the company being attacked, and the company can less worry about the Other brewery
companies unites together against it. (T3)

Recommendation 3:

Acquire not only the brewery companies but also some fried food restaurants.

“When outnumbering the enemy ten to one, surround him”-Line 3.24

Sun Zi Art of War translated by Chow Hou Wee

In another words, it means if your company is ten times bigger than your opponents,
buy over your competitors or organizations which helps your company’s business.

In general, people will not just drink the beers alone but also they will
consume some fried food together with beers. Therefore, the company can acquire
some fried food restaurants to provide the fried food together with beers. It not only
creates one more approach for the company to reach their products to customers but
also build the competitive advantages among the rivals.

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Part E: Conclusion

From this assignment, we have learnt that in order to solve problems, we have to use
strategies. There are a lot of strategies in Sun Zi’s philosophy. From Sun Zi’s
philosophy, in order to win the battle, it is important to have first mover advantage
where better preparation can be made against the enemy. AB InBev was the first to
use pasteurization process to keep beer fresh without losing the original taste. Next,
loyalty, discipline and trust will result to a strong combat force. AB InBev allowed
their employees to give their own opinion, ideas and award them based on their
performance. These causes the employees stay loyal and benefit the company.

Besides that, using different strategies in different condition is also important to win
the battle. In the condition of losing market share, AB InBev had made an investment
in product development and sustainability efforts in its business in order to gain back
its market share. Company’s market position should be defenced and wait for the
opportunity to defeat the enemy or competitors. The strong brands name and the
leading market position of AB InBev are their invisible defence against their
competitors.

Other than that, as a group, we learnt that teamwork, communication, discussions,

sharing information and idea are also a key to complete this assignment.

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Part F: Executive summary of the report
Business description
Anheuser-Busch InBev (AB InBev) is the world’s largest and leading global brewer
company. The key industry of AB InBev is brewing beverages with more than 200
brands in its portfolio. The main competitors of AB InBev are Heineken, Carlsberg,
Molson Coors Brewing Company and SABMiller. AB InBev segments their market
with geographic segmentation and operates in total seven segments.

Usage of Strategies of Sun Zi’s Art of War in Mahindra and Mahindra Ltd

AB InBev has used the strategy of Weaknesses and Strengths. The first mover
advantage makes AB InBev to be the leading company in brewing industries.

AB InBev has used the strategy of Movement and Deployment of Troops. AB InBev
creates loyal, standard and disciplined employees which results to a strong combat
force in brewing market.
AB InBev has used the strategy of Strategic Attacks. The different strategies used by
AB InBev in different conditions leads them to the success.
AB InBev has used the strategy of Disposition of the army. AB InBev built up an
invisible defence and gets opportunities to defeat their competitors in order to be the
leading brewer company.

SWOT analysis of Anheuser-Busch InBev

Strengths of AB InBev are having huge resources and asset, product research and
development innovation, effective strategy implementation and good human resource
management.
Weaknesses of high market concentration with deadly mistake, high degree of
dependence on wholesalers, heavy leverage and high price charged to consumer.

Opportunities of good distribution network, expand markets globally, acquisition of

other companies and growing demand of healthy beer.

Threats of serious price war, high growth of competitors, unity of other brewery
companies against AB InBev and high commodity cost.

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Recommendations for Anheuser-Busch InBev

By using strengths and opportunities to overcome weaknesses and threats, AB InBev

is suggested to minimize the expenses of the business in order to earn higher profit.
Next, AB InBev is recommended to manufacture new and healthier products to target
consumer with their strength of strong innovation in product research and
development in order to compete with their competitors. Furthermore, AB InBev
should acquire some fried food restaurants but only brewery companies. This is to
create one more approaches and build competitive advantage among the unity of
rivals.

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References

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