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Grolsch, a company with a strong history and a highly rated product, has just been purchased by SABMiller. The company is evaluating its global strategy in light of the acquisition and determining how to position and sell its beer going forward. Grolsch has positioned itself well to compete internationally and has leveraged several tools (e.g. the MABA framework, strategic analysis) to effectively expand abroad. However, they must assess whether or not the MABA framework is still useful, what type of international strategy they should pursue (i.e. developed vs. developing markets), and if their adaptation strategies will continue to be an asset in their business development. The initial conclusion, detailed below, is that Grolsch should expand the MABA framework while also leveraging and recognizing the value of SABMillers distribution network. They need to maintain focus on international markets, looking at both developed and developing markets to diversify growth opportunities. Success for Grolsch depends on how well they can identify markets where their high-end, premium product will be desirable. But, it will also depend on their ability to adapt the brand image and marketing approach based on the cultural differences of the foreign markets they enter. The subsequent presentation contains exhibits and analysis that support and further develop these conclusions.
Industry overview
Before assessing Grolschs global strategy and approach, it is important to understand the beer industry overall from a strategic perspective. Two helpful methods for doing this are Porters Five Forces and a PEST analysis. Analyzing Porters Five Forces for the beer industry can provide insights into the reasons for the underlying economics and general competitive situation (see exhibit 1). The five aspects include competitor rivalry, suppliers, buyers,
substitutes, and new entrants / barriers to entry. A PEST analysis helps in understanding the macro-environmental factors such as market trends, market potential, business positions, and direction for future operations (see exhibit 2). The four components of PEST include Political, Economic, Social, and Technological factors affecting the industry. These frameworks are useful in providing a basis for analyzing Grolschs global strategy. Insights are referenced in this paper, but details contained within each framework are primarily discussed in the exhibits so as to focus on core questions related to Grolschs global strategy.
as mostly uniform actions can be taken at a higher level. Strategic focus and competitive moves/responses are shifting to be more global though the need for localized approaches still exists. With the industry consolidation, there is a shift from multi-domestic to global as competitive reactions are handled globally due to the presence of large brands competing across multiple countries. Though the most compelling argument for this industry being global is the supply chain for making and distributing beer being highly global, the selling and brand development of the product needs to be customized for local markets. Due to the mixed nature, Grolsch should pursue a transnational strategy, incorporating elements of both the global and multi-domestic approaches.
distance, though ideally this metric should be rated directly on the costs rather than reducing its accuracy to a simple 1-5 scale. Finally, GDP per capita aligns with economic differences. This framework is a useful starting point for assessing potential target countries. Grolsch should supplement their MABA framework by using aspects from Porters Diamond Model, which highlights other strategic elements regarding foreign expansion. Exhibit 3 is an example created for the U.S. market. MABA alone can oversimplify complex relationships that exist between countries and some results can be counterintuitive. For example, China is listed as high market attractiveness (Exhibit 9 in the case), but in solely assessing the individual MABA scores, one might expect China to perform poorly on market attractiveness, given the differences between China and the Netherlands in distance, culture, transportation costs, etc. Grolsch should continue to utilize MABA for directional analysis, but should not place too much emphasis on the outcome from MABA alone. Following the merger, SABMillers strong distribution network in some markets could be a benefit which may not be fully captured in MABA.