South African Breweries is strong in new product development. The beer market is becoming more global in character, which implies that opportunities for acquisition will develop. Beer is increasing in popularity as an alcoholic beverage of choice in relation to wine and liquor, which provides increased growth opportunities.
South African Breweries' market capitalization is lower than other major competitors in the global beer industry because the company's dominant markets are in weak currency areas. The company also has lower levels of access to new capital than is true of other major competitors in the global beer industry because of weakening economic conditions in the company's primary markets.
Major competitors in the global beer industry whose markets are primarily in strong currency areas are in positions of strength in relation to those beer industry competitors, whose markets are primarily in weak currency areas, thereby placing the latter in threatened competitive positions. The beer market is becoming more global in character, which implies that weaker companies may become takeover target.
3. Should the company become a multinational or a global competitor? Do cross-country
differences in market conditions affect the multinational/global decision?
South African Breweries (according to the case materials) has 12 major competitors. Competitive conditions changed subsequent to (a) the acquisition of Miller Brewing Co. by South African Breweries in 2002 and (b) further consolidation in the industry since 1999. Smaller national brewers remain important competitors for South African Breweries in emerging markets. As a global marketer of beer, however, South African Breweries must concern itself with major global competitors. The most important of these globa