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Anheuser Busch Swot Analysis

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Management 303 SWOT Analysis of Anheuser Busch
Section 1 Organizational history In 1843 Eberhard Anheuser immigrated to the United States from Germany, after settling in St. Louis he became part owner of Bavarian Brewery in 1852. In 1860 Anheuser bought out other investors and changed the name of the brewery to E. Anheuser & Co. In 1861 Adolphus Busch married Eberhard’s daughter Lilly. In 1869, Adolphus bought in and gained half-ownership in the brewery. In 1879 the name of the brewery became Anheuser-Busch Brewing Association. In 1880, Adolphus Busch became president of the brewery following the death of his father in law. In 2008 Anheuser-Busch merged with INBEV to become Anheuser-Busch INBEV. After this merger, this company has become the world’s largest brewer and one of the top five consumer goods companies (ABWEBSITE).
Section II: Strengths and Weaknesses
Strength 1: Advertisement One key to the success of AB-InBev over the years is their creative use of advertising. Year after year this company continues to be one of the top purchasers of commercial airtime during the Super bowl. Spending an average of 30 million dollars per Super bowl (STLTODAY). The use of slogans and themes for advertising campaigns over the years has helped to build a loyal following and universal brand recognition. Another strategic move was made by AB in 1955. At this time August Busch Jr. made the move to associate his product with the game of baseball. Over the years this marketing strategy has expanded to not only connect AB’s product with professional baseball, but with other professional sports as well. In addition to creating ties with professional sporting events, AB also operates 9 theme parks; including Busch Gardens and Sea World. This strategy is helpful to AB as it allows the company to appeal to a broader consumer base. Thus possibly creating some brand loyalty among a younger age group that have not yet become consumers.
Strength 2: Innovation AB has been the leader in their market for innovative ideas and strategies over the years. These innovations began impacting the market as early as the 1870’s when the company became the first American brewer to use pasteurization to keep beer fresh for longer. In the 1880’s the company introduced artificial refrigeration. Before this innovation the brewery was only active during the winter, due to the hot summer months production was halted. Due to the introduction of artificial refrigeration production increased tremendously. Around this time this innovation was also used to begin refrigerating railroad cars so that they could keep the product cold during transport. A more recent innovation is AB’s introduction of the Draftmark system. This system fits easily into a home refrigerator and allows for the fresh draft experience while in one’s own home. This product come in two parts, one is a one-time purchase of the Draftmark device. The second part is an interchangeable beer canister. This allows the consumer the option of changing their beer selection without having to purchase a new device.
Weakness 1: Too much Diversification Over the years Anheuser Busch has tried to expand their customer base by reaching into different markets outside of the brewing industry. One of those markets was their snack line, Eagle Snacks. In 1996 AB sold the company to Procter & Gamble. After years of losses AB decided their best move was pull out of this market. Around this time AB also divested itself of the St. Louis Cardinals Baseball franchise and Bush Stadium property In 1994.The company had lost 12 million dollars on the baseball franchise.
Weakness 2: Lack of attention into the craft beer market
Another weakness of Anheuser Busch is their lack of exploration into the craft beer market. Today’s consumers are looking for more variety and something different in their beers. In this new market Anheuser-Busch’s focus on tradition could possibly handicap them and limit their potential for growth. Annheuser-Busch explored the possibilities of this market. They could attract more beer drinkers outside of their loyal customers.
Section III: Opportunities and Threats
Opportunity 1: International Growth In 2008 Anheuser Busch merged with international brewing company InBev. Due to this merger the company is now able to reach a more broad market. AB was already strong at that time, begin rated as the number one brewery in the world by volume. However, with this merger with InBev they have firmly secured their place at the top of the beer market. Beer enthusiasts all over the world are looking or more variety and now with this merger AB-InBev is able to reach more customers internationally than before. In addition, AB-InBev can also increase their distributor base. Having that connection with an international company allows them to distribute to more countries and customers.
Opportunity 2: Exploring the Craft Beer Market As previously mentioned AB-InBev lacks exploration into the craft beer market. This could be a potentially profitable opportunity for AB-InBev to explore. American’s beer palates are rapidly becoming redefined. Micro-breweries and craft brewers are making unexpected gains in the beer industry. For AB-InBev to continue their dominance in the beer industry, they should make a strategic move and work at accommodating these potential customers. The craft beer market is constantly changing and consumers are eagerly looking for more specialty options and the sooner AB-InBev begins to produce these options the more potential for growth there will be.
Threat 1: Changing Consumer Demands
Alcohol consumers’ demands are fluctuating on a consistent basis. As consumers taste and demands change in unpredictable ways, it can be difficult for AB- InBev to stay on top of these demands and deliver what the customer wants. Some consumers may begin to prefer the competitions product or the demand for AB- InBev products may decrease. To avoid failure AB-InBev must anticipate consumer demands and adjust accordingly to meet those demands. AB-InBev may need to introduce different products and services.
Threat 2: Potentially Carrying Too Much Debt With the recent Anheuser-Busch/InBev merger in 2008, AB-InBev has since then purchased Grupo Modelo, Mexico’s leading brewer and Asahi, a Japanese brewery. AB-Inbred has taken advantage of the historically low interest rates and they are taking risk by buying out these other companies. The potential threat that could hurt AB-InBev is when inflation increases and then the interest rates will follow with an increase. It would benefit AB-InBev to be conservative in the years to follow and anticipate changes in the economy to avoid the threat of carrying too much debt.
Summary
In conclusion, AB InBev is undoubtedly one of the most successful American companies. Although the merger with InBev may have been seen as a setback in the eyes of Americans, this merger has proven to have the potential to introduce new product to new consumers. With AB-InBev’s two proven strengths in promotion and innovation and the two opportunities that present themselves they should have no problem accomplishing this. But, if they fail and allow their weaknesses and threats to overcome them, the results might be different.

Sources
1. "Anheuser-Busch." Anheuser-Busch. N.p., 2012. Web. 22 Jul 2012. <http://www.anheuser-busch.com/>. 2.Unknown, Anheuser-busch inbev company profile. N.p., 2011. Web. 22 Jul 2012. <http://www.ab-inbev.com/go/media/company_information/ab_inbev_company_profile.cfm>. 3.. "Why P&G's Smile Is So Bright." Businessweek. Bloomberg Businessweek, 2012. Web. 22 Jul 2012. <http://www.businessweek.com/>. 4.New york times. The New York Times , 2012. Web. 22 Jul 2012. <http://www.nytimes.com/>. 5. Cnn.com. Turner Broadcasting System, Inc, 2005. Web. 22 Jul 2012. <http://www.cnn.com

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