Challenges of International Expansion

Ghauri & Cateora (2010) established that cultural dynamics played a vital role as far as international marketing was concerning. Marketing is a major component of business strategy and is particularly critical in the exporting and franchising approaches to international market entry. Cultural dimensions differ among all countries.

Usunier (1996) developed an empirical outlook of 50 nations based on Hofstede’s cultural dimensions of; power distance, uncertainty avoidance, individualism, and masculinity. It was based on a scale of 1 – 100. A country like United States had; power distance (40), uncertainty avoidance (46), individualism (91), and masculinity (63), (Usunier, 1996).

On the other hand, an emerging nation like India had the respective scores of; 77, 40, 48, and 58 using the same scale. Effectively, advanced economies tended to exhibit greater levels of individualism with collectivism being witnessed in developing economies. The ability to encapsulate cultural knowledge is imperative in achieving success.

Cultural diversity also extends to management practices which can influence the success of the venture. Daimler-Benz faced such challenge when it acquired Chrysler with management cultures clashing on several. This was particularly instrumental in the massive failure of the acquisition as the cultural differences affected production.

There are numerous regulatory and legal challenges whenever an organization establishes significant market penetration in an external market (Hitt, Ireland, & Hoskisson, 2011). This is evident for investments that require extensive resources commitments such as joint-ventures, acquisitions, and developed of Greenfield operations.

Other risks that are associated with internationalizing business include; political and economic risks (Hitt, Ireland, & Hoskisson, 2011). Political instability has a direct impact on economic outlook. Tepid economic growth in external markets affects the impetus to inject more funds and influence the expected rate of return.

Companies that seek internationalization in emerging markets are inextricably faced with policy risks. Henisz & Zelner (2010) noted that western multinationals leveraged on a variety of tools to protect their income streams. They include a combination of; financial instruments, insurance, and legal contracts.

Henisz & Zelner (2010) asserted that the reliance on country risks ratings based contract-repudiation and asset-seizure was lopsided and inadequate. They indicated that policies differed from country-to-country and were largely industry-specific. Political mastery is an essential tool that would provide relative protection against arbitrary policy changes.

Shifts in domestic policy relating to strategic focus on a particular industry might limit access to international firms. Hout & Ghemawat (2010) examined China’s push to make the country a technology superpower through aggressive policy changes. It has been “cajoling, co-opting, and often coercing western and Japanese companies” (Hout & Ghemawat, 2010, p.96).

The government has adopted four main mechanisms; tax incentives, increased state research spending, favoring indigenous firms during procurement, and coercing multinationals to transfer technology through state-owned joint-ventures (Hout & Ghemawat, 2010). This is an increasing challenge even in advanced economies as governments seek to protect employment.

Bhattacharya & Michael, 2008) examined the growing influence of efficient homegrown firms in limiting the expansion of western transnational firms. They noted that emerging market firms such as Baidu and TV Globo has incorporated technology to enhance competitiveness. Effectively, western firms had more difficulty in accessing the domestic market.

To overcome the evolving competitive environment in these markets, multinationals have to adapt their business models to be more market aware and circumvent main obstacles (Bhattacharya & Michael, 2008). Technology firms often face piracy and fraud risks but they have to leverage on advanced technology rather than relying on policy frameworks.

They are more than not inadequate and hard to effect and monitor. The other strategies to enhance competitiveness are; taking advantage of cheap labor and having in-house staff training, scaling up rapidly, and investing in talent through training and attractive working environment (Bhattacharya & Michael, 2008).

Essentially, multinationals have to adopt the strategies that have made local firms highly successful and develop their own strategies which are inimitable (Bhattacharya & Michael, 2008). They have to use their international experience to create a differentiation for their brands and employing global consistency in their operational frameworks.

Another persistent challenge in international markets as well as domestic environment is employee motivation. Multinationals have to adopt a motivational framework that takes the levers of; a reward system, cultural alignment, specific job design, resource-allocation, and performance-management (Nohria, Groysberg, & Lee, 2008).

Talent acquisition and retention remains to be a perennial challenge for these firms in their domestic environments and internationally. Employee motivation lies in effectively addressing four main drivers; drive to acquire, drive to bond, drive to comprehend, and drive to defend (Nohria, Groysberg, & Lee, 2008).

Research Gaps

Hitt, Ireland, & Hoskisson (2011) explored the general approach to business expansion by considering various options that are available to businesses which are seeking presence in international markets. The generalized approach does not take cognizance of specific market dynamics that are unique to different regions and countries.

Katsikeas et al. (2007) and Albaum & Duerr (2008) alluded to the general conditions that prompt firms to consider expanding into international markets. The overriding element is that there is great generalization in most literature. There is also increased focus in individual cases with greater emphasis on western multinationals expanding into Asian markets.

This study sought to evaluate the internationalization approach to a frontier market (Kenya) and also examined the rapid ascension of an emerging market multinational into another emerging market region. The two companies are based on the same industry sphere which allows for cross comparison of their respective performances.

The specificity of the market research driven by the two case studies provided greater insights into accessing the fast emerging frontier markets which have much greater potential. They offer an evaluation of the internationalization strategy that was adopted by the two firms and current market standing indicating success and pitfalls of the adopted approach.

Chapter 3: Research Methodology

3.0

Introduction

This chapter outlined the various research methodologies that are available. It also outlined the approaches that were considered. The chapter determined the most appropriate; research methodology, research methods, sampling/population, data collection instruments, data processing methods, and ascertained the veracity with validity and reliability constraints.

Research Methodology

Research methodology can be grouped in the following categories; quantitative and qualitative (Dawson, 2002). Qualitative methodology seeks to attain in-depth opinions from respondents by exploring behavioral elements such as experiences and attitudes (Dawson, 2002). The methodology is subjective depending on personal viewpoints.

It has a process-oriented approach with a basis on exploration or induction. Qualitative methodology places great emphasis on gaining understanding with a holistic perspective. In addition, it is based on comparison and contextual discernment with measurement achieved from uncontrolled factors and observations (Dawson, 2002).

Quantitative methodology seeks to generate vase amounts of data through the use of extensive surveys (Dawson, 2002). The methodology usually makes use of methods such as structured questionnaires, case studies, and structured interviews. It is usually oriented towards achieving designated results.

It is mostly based upon deduction that could be derived from hypotheses. The main objective of the methodology is to analyze situations and achieve empirical results that are based on facts. Generally, the findings are determined based on defined sample based on preset benchmarks which can employed in a controlled experimentation.

To achieve greater objectivity, a triangulation can be employed by using both methodologies in research. The ability to counteract inherent weaknesses in each methodology to expound the advantages is achieved by this approach. However, this approach also increases the complexity of research without necessarily achieving different outcomes.

Research Methods

A research method is essentially a practical technique for retrieving data such as questionnaire, survey, case study, or interview (Bryman & Bell, 2010). The research methods are closely intertwined with specific methodologies. In essence, quantitative methods include; close-ended questionnaires, structured interviews, and case studies.

Qualitative methods include the following; open-ended questionnaires, unstructured interviews, semi-structured interviews, focus groups, and participant observations. The main differences between the quantitative and qualitative methods arise from their; analytical objectives and design flexibility (Mack et al., 2005).

Choice of data retrieval instruments and framing of questions are also indicative of their differences. Qualitative methods; seek to investigate phenomena, are semi-structured, are open-ended, have textual data, explain and describe relationships, have questions formulated after responsive, and usually repetitive in execution (Mack et al., 2005).

Quantitative methods; seek to verify phenomena, are highly-structured, are predictive in establishing causal relationships, often open-ended, exhibit numerical data, have predetermined questions, and mostly based on assumptions (Mack et al., 2005). The set objectives determined the most appropriate research method.

Research Approach

There are three main research approaches; inductive vis-à-vis deductive, interpretivist vis-à-vis positivist, and constructivist vis-à-vis objectivist (Greener, 2008). Deductive research seeks to prove/disprove hypotheses or phenomena. The inductive approach begins by examining the problem and generates theory through the use of the research methods (Greener, 2008).

Interpretivist approach is subjective relying on deductions of anticipated outcomes. The positivist approach focuses on generating empirical results by promoting experimentation with the target of proving/disproving preset hypotheses (Greener, 2008). It may combine both induction and deduction while interpretivism is mainly deductive.

Constructivism considers organizations as only existing as entities as long there is a management and employee base (Greener, 2008). Objectivist approach considers social entities such as societies and organization as having their individual existence. This separates the entity from the management and employees team.

Quantitative research methodology leans on quantitative methods with the potential research approaches being; deductive, objectivist, and positivist (Greener, 2008). Qualitative research methodology naturally leans towards qualitative methods with likely research approaches being; inductive, constructivist, and interpretivist (Greener, 2008).

Research Design

“Research design is the overall plan for relating the conceptual research problem to relevant and practicable empirical research” (Ghauri & Groanhaug, 2005, p.56). There are three main classifications of research design; causal, descriptive, and exploratory. Causal approach seeks to establish the cause and effect relationships of certain variables.

Descriptive design measurement is based on predetermined problem with information sought on this basis. Exploratory design attempts to gain understanding from a vaguely set problem through research. This study already had a pre-established problem and thus found the descriptive research design to be appropriately attuned.

A quantitative research methodology was preferred owing to the need to generate actual statistics on the impact of business expansion. The preferred research method was case study of two multinationals in a similar industry to allow for common size analysis. Case study is useful in situations where in-depth and holistic research is required (Feagin, Orum, & Sjoberg, 1991).

The method is planned with evidence collection being systematic which suits the purpose of the study. There is some limited triangulation with descriptive explanations about the growth and expansion of the two case firms in frontier and emerging markets respectively. This enables the research study to fulfill its objectives of explaining internationalization.

Choice of Companies

There were two companies which were chosen as the basis of the case study with the main consideration being that they operate in the same industry. They are large multinationals which are expanding into emerging/frontier markets. There have been a lot of research firms internationalizing into emerging nations with particular emphasis on China.

The two companies are brewing giants with one (Diageo) being a western multinational with roots in the united kingdom while SAB Miller is an emerging markets multinational with its roots in South Africa. Examining their different approaches and performance in the markets provides important lessons that could be generally applied to expanding into new markets.

Data Collection Instruments

Collection of data was based primarily on secondary sources such as historical records, company reports, business reports, and journals. This was a preferred as the research sought to evaluate the strategy that is involved in expanding internationalization. It allows for the examination of motivations, entry methods, and expansion challenges.

Data Processing and Analysis

The data that was derived mainly from company reports and business journals was analyzed against the performance in the specific target international markets. They were illustrated appropriate using tables and charts. Analysis was supported by relevant discussion on the illustrated figures and cross-comparison undertaken between the adopted approaches.

Validity and Reliability

Validity ensures that information sources are extensive with depth and breadth (Fisher, 2007). Reliability is concerned with structural consistency of the research methods. This ensures that repeated research yields similar outcomes. The use of two case studies with predetermined topics and based on varying market entry methods assured of validity and reliability.

Chapter 4: Research Findings and Results

2.0

3.0

4.0

Introduction

This chapter presented data that was mainly sourced from secondary sources. The data sought to explain the modes available for internationalizing businesses. It details the expansion modalities involved in the internationalization of two brewing firms into specific markets through concentrated case studies with defined frameworks.

4.2 Case Study: Diageo (Kenya - EABL)

4.1

4.2

4.2.1 Company Background: Diageo

Diageo is the third largest integrated alcoholic beverages company in the world behind Anheuser-Busch Inbev and SAB Miller. In fiscal 2013, the company revenues in local currency rose by 6% to $17.9 billion. Volume rose by 1% while organic jumped 5% with net earnings rising 11% to $1.6 driven by demand in emerging markets (Diageo, 2013).

The group’s home market is in the United Kingdom but has since adopted a transnational approach to its market expansion. Diageo is often considered to be the largest spirits with such veritable brands as Smirnoff, Johnnie Walker, J&B, Captain Morgan, Jose Cuervo Especial, Tanqueray, Crown Royal, Ciroc, and Ketel One.

It has segmented its market regionally into; North America, Western Europe (includes United Kingdom), Africa, Eastern Europe, & Turkey, Asia Pacific, and Latin America & Caribbean (Diageo, 2013). Growth in North America has been robust mainly driven by strong demand in the premium spirits category with brands such as Ketel One Vodka.

In fiscal 2013, organic growth rose by 5% with volume trending up by 1%. Volume growth was supported by demand for Buchanan’s Ketel One Vodka and Ciroc. Western Europe volumes and sales declined by 3% and 4% resulting in net sales of $3.7 billion (Diageo, 2013). The market was largely constrained by economic conditions and competitive environment.

Africa, Eastern Europe, & Turkey experienced a strong demand influenced by a mixture of macro-economic factors. Net sales topped $3.8 billion, rising by 10% and volumes rising by a further 4%. Latin America & Caribbean and Asia Pacific had organic growths of 15% and 3% respectively in fiscal 2013 (Diageo, 2013).

Asia Pacific has declined especially with the imposition of anti-extravagance measures by the Chinese government. This has significantly affected demand for premium spirits. Latin America & Caribbean is experiencing mixed performance with modest growth in Colombia, Paraguay, Uruguay, and Venezuela while Mexico and Brazil are generally flat.

Diageo has already transcended its British heritage and is one the most integrated multinationals with widespread global operations. The company has implemented a balanced approach to growth through organic means, joint-ventures, and acquisitions. This has ensured that it keeps pace with its peers in a rapidly consolidating industry.

International Expansion

The group has adopted a transnational approach to its internationalization strategy. “A transnational strategy is an international strategy through which the firm seeks to achieve both global efficiency and local responsiveness”, (Hitt, Ireland, & Hoskisson, 2011, p.229). This entails flexibility in local responsiveness while maintaining adequate global coordination.

However, it is increasingly adopting a multi-domestic approach in the fast growing emerging markets. This approach entails the decentralization of strategic business units according to operating regions to allow for customization of products towards the domestic markets (Hitt, Ireland, & Hoskisson, 2011).

Essentially, Diageo combines the two international corporate-level strategies to engage in growth and market consolidation. It has divided its market into regions and currently has five operating regions. They were initially more but some regions were integrated in particular, Africa with Turkey and Eastern Europe.

Diageo has adopted the two strategies in its internationalization strategy; acquisition and joint-ventures. The company has been on acquisition drive especially in Africa with concentrated efforts in East Africa. It initially acquires a substantial stake in an international firm with a sales purchase agreement (SPA) that allows it to acquire additional interest in the firm.

The company used this approach to acquire a 50% equity stake in Rum Creations Products (RCP) for $224 million in 2011. Industrias Licoreras de Guatemala (ILG), the parent company of RCP has a put option to dispose the remaining 50% in 2015 based on calculation of profit multiples. Diageo holds the preemptive rights to acquire this stake.

In another instance, Diageo acquired Turkish brewer, Mey İçki Sanayi VE Ticaret A.S for $2.1 billion in 2011. This is allowed it to gain access to a fast expanding market at the crossroads between Europe and Asia. The company realized $492 million in net sales from the acquisition and positioned it competitively to serve a burgeoning upper-middle nation.

Internationalization through the establishment of strategic stakes or outright acquisitions has been an industry trend. A similar strategic approach was adopted by rival, Anheuser-Busch Inbev when it completed the acquisition of a remaining 50% in Grupo Modello for $20.1 billion in 2012. This allowed it to establish a stronger presence in the Mexico and the Caribbean.

4.2.3 Host Country Overview: Kenya

Kenya is the 11^th largest African economy by nominal GDP valued at $37.2 billion with per Capita income averaging $900 (World Bank, 2013). It is East Africa’s largest economy and has a vibrant beer market which is ranked 3^rd in the continent at 17% behind Nigeria and South Africa with market shares of 36% and 18% respectively (Irungu, 2012).

The country has an estimated population of 44 million people with five ethnic communities dominating the demographics. Kikuyu, Luhya, Luo, Kalenjin, and Kamba have combined population concentration of 72% (CIA, 2014a). Kenya has population growth rate of 2.27% with an urbanization level of 24% growing annually at a rate of 4.36% (CIA, 2014a).

Literacy levels have been improving to a current level of 87.4% with the major driver being the provision of free primary education across the country in public schools. It has gained significant political stability in the aftermath of a post-election crisis in 2007/08. Economic growth rate is robust rising 4.6% in 2012 (CIA, 2014a).

It is projected to average to average similar levels in 2013 and is expected to accelerate past 5% in 2014. Unemployment rate is high at 40% for the general population but a much higher 70% youth unemployment. Poverty level are generally high at just under 50% but is expected to decline as urban incomes continue to rise.

Overhead inflation has declined to 9.4% with underlying inflation just under 5% while the Central Bank Discount rate remains stable at 8.25% (CIA, 2014a). This has meant that commercial bank lending rates have stabilized at about 20%. The capital markets are vibrant with equity having a market capitalization of $23 billion.

4.2.4 Company Overview: EABL

EABL is the largest brewer in Eastern Africa and controls its primary market, Kenya with a 90% stake (Irungu, 2012). There is one other competitor, Keroche Breweries that currently holds a 3% of the formal beer market with an ambitious expansion plan targeting 20% of the market share in 2 years. The rest of the market is controlled by imported brands.

Table 4‑1: Kenyan Beer Market

Composition of Kenyan Beer Market
Rank	Company Name	Market Share
1.	Kenya Breweries Limited (EABL Subsidiary)	90%
2.	Keroche Breweries Limited	3%
3.	Imported Brands from International Breweries including; SAB Miller, AB-Inbev, & Heineken	7%

Source: Irungu (2012)

`In fiscal 2013, the company has consolidated net revenues of $685 million, a growth of 6% but net income dipped significantly by 37.5% to $80.5 million. The main driver of this decline was rise of financing expenses as a result of an acquisition drive by the firm. EABL has active operations in; Kenya, Uganda, Tanzania, and South Sudan.

The company acquired a 51% controlling in Tanzanian brewer, Serengeti Breweries for an all cash consideration of $61 million in 2011. A shareholder’s agreement allowed the company to acquire the remaining stake between February, 2014 and July, 2014. This move was instigated by a corporate drive to consolidate operations in its key markets.

In 2002, EABL had established a joint share-swap agreement with SAB Miller that gave the two companies respective shareholding in each other operations. EABL ceded a 20% stake in its main subsidiary, KBL while SAB Miller also ceded a similar stake in Tanzania Breweries (TBL). This agreement put an end to an escalating beer war that had turned nasty.

EABL sold off its 20% stake in TBL prior to acquiring the stake in Serengeti Breweries. SAB Miller also disposed off its 20% stake in KBL and entered the Kenyan market with an acquisition of a domestic company, Crown Foods and is engaged in distribution of its brands through this subsidiary.

The main brands under EABL’s docket included the iconic Tusker, Tusker Malt, Tusker Lite, Serengeti Premium Lager, Bell Lager, Pilsner, and Senator Lager (EABL, 2013). It has a joint-ownership arrangement with Diageo in distiller, UDV Kenya where it manufactures locally-oriented sprits including; Kane Extra, Jebel Gold, and Uganda Waragi.

EABL also undertakes distribution of beer and premium spirits from Diageo in the East African region. The main brands distributed in the region include; Guinness (manufactured under license), Johnnie Walker, Baileys Cream Liqueur, Smirnoff Vodka, Ciroc Vodka, Zacapa Rum, Tanqueray Gin, Don Julio, Talisker, and Ketel One Vodka (EABL, 2013).

Market Entry Strategy

Diageo made a market entry into the East African beer market by acquiring a 50.03% controlling stake in EABL in 2002. The stake was acquired through negotiations with some major shareholders who included influential people in the country. They agreed to sell their listed shares to a Kenyan-domiciled, Diageo subsidiary, Diageo Kenya.

It was effectively an open-market acquisition with agreements established between the shareholders. Diageo was unable to execute its strategic approach of establish a put option for acquiring the remaining stake as they were held by different entities for strategic reasons including the country’s social security firm, NSSF and various nominee accounts.

Essentially, Diageo’s stake has remained at those levels over the past decade and is unlikely to rise further. In 2011, the company extended a shareholder loan amount to $222 million to purchase the 20% in KBL held by SAB Miller and is expected to be repaid by 2016. Acquiring the stake in EABL provided it access to the three main East African markets.

They are; Kenya, Uganda, Tanzania, and recently South Sudan as it increases its market reach. Under the shareholder agreement with Serengeti Breweries, Diageo had the preemptive rights to acquire the remaining 49% in the firm directly or through an assigned subsidiary. Diageo has chosen to maintain its current stake while targeting newer markets.

Regulatory Environment

Kenyan has relatively high taxation regimes for the formal beer industry. Standard VAT levels are at 16% while excise duty averages about 12%. Consolidated taxation including; VAT, excise duty, and corporation tax consume about 70% of net revenues. The business is generally high margin but rising taxes are impacting on revenues.

Recently, a low-end beer brand, Senator Keg Lager was slapped with a 67% excise duty. This move almost doubled its retail price and massively affected brand volumes. Corporation tax has been stable at 30% which has ensured relative stability. Ease of trading through the EAC (East African Community) has been beneficial in moving products.

Market Performance

The Kenyan beer market has been expanding rapidly with EABL having tripled its net revenues over the past decade. In the past three years, revenues have surged from $521 million in 2011 to $685 million in 2013, a growth of 31.5% (EABL, 2013). Market capitalization was about $633 in 2012 but has since risen to the present level of $2.4 billion.

This has been hugely beneficial to Diageo since dividends have been rising and it did not need to invest additional funds until the recent inject to fund the 20% acquisition in KBL. In fiscal 2013, it received $25.2 million in dividends. Effectively, Diageo has quadrupled the value of its investment in EABL plus annual dividends that it receives from the operation.

Market Challenges

Cultural dynamics usually influence market growth of any company that is expanding overseas. However, Diageo eliminated the challenges that are experienced by firms that fully acquire firms as it just overseas operations in the market through its regional head. Concepts that drive business are driven by local talent which has enhanced the success rate of the firm.

Regulatory challenges have increased in the market directly affect volume levels. In 2011, a law was enacted that drastically the reduced duration for pubs to only 8 hours during weekdays and 10 during weekends. This effectively affected the distribution of low-end beer and spirits as the limited opening times reduced overall demand.

Road infrastructure is still generally weak as road maintenance has been lackluster. This has a direct impact on its distribution networks and increases the operating expenses. The government has always targeted the beer and cigarette industries during annual budgets as the main source of increasing government revenues.

This always puts pressure on retail pricing and affects margins. In some instances, EABL and other firms absorb some of the tax adjustments. In recent times, the adjustment has become rather arbitrary such as the taxation of Senator Keg Lager. This has a direct on capital expenditure to improve distribution efficiency.

There are political risks associated with the market as witnessed in the 2007/08 which had a negative impact on the general economy. It slowed down demand for entertainment-oriented products such as beer as surging inflation rapidly increased the price of basic commodities. It also increased inputs costs for EABL especially for its barley and sugar.

Unemployment levels continue to remain stubbornly high especially among the youth. This has dampened potential from the burgeoning group especially for its premium products which are increasingly being priced out of the affordable range even for the middle-class. Price in the industry is shifting faster than incomes can rise especially in the major urban cities.

Effectively, there are some market uncertainties in Kenya especially as far as the regulatory environment is concerned. Arbitrary tax increases seriously impacts business planning and affects volumes and margins. There is generally political stability that has been boosted by the approval of a new constitution in 2010.

4.3 Case Study: SAB Miller (Colombia – Grupo Bavaria)

4.3

4.3.1 Company Background: SAB Miller

SAB Miller is the second largest alcoholic beverages company in the world behind global leader, the Dutch/American conglomerate, Anheuser-Busch Inbev. The company generated net revenues and net income of $34.5 billion and $3.5 billion respectively in fiscal 2013 (SAB Miller, 2013a). It was formed from the combination of SAB and Miller Brewing.

South African Breweries (SAB) was established in 1895 and has grown to become a global player. It is primarily listed in the United Kingdom on the London Stock Exchange (LSE) with a secondary listing on the Johannesburg Bourse, JSE. It has a strong presence in its regional market, Africa with a market presence in 15 countries and an additional 21 through Castel.

The company acquired Miller Brewing Company in 2002 and thus became SAB Miller after the consolidation of the two firms. Market segmentation has been divided into five regions; South Africa, Africa, North America, Latin America, Europe, and Asia Pacific (SAB Miller, 2013a). SAB Miller usually consolidates its acquisitions into the corporate entity.

SAB Miller is the most dominant brand in its home market with net revenues of $5.5 billon. This was a 5% decline largely influenced by the downward spiral of the rand. The Asia Pacific region is a strong market for the company especially after consolidating Fosters into reported revenues which surged 62% to $5.7 billion (SAB Miller, 2013a).

Africa growth was boosted by strong demand in key markets; Nigeria and Tanzania achieving an overall organic growth rate of 5% to $3.8 billion. Europe also grew by a similar 5% margin with net revenues hitting $5.7 billion with Latin America has strong demand in Panama, Honduras, and Peru rising 9% to $7.8 billion (SAB Miller, 2013a).

The group’s signature brands include; Castle, Peroni, Miller, Coors, Fosters, Carlton Dry, Victoria Bitter, Pilsener, and Águila. They form part of the 200 brands in the group’s product portfolio which is targeted at local tastes in the regions that it operates. In the earlier years, SAB Miller grew organically but since the early 2000s, it has been aggressively acquiring.

SAB Miller is also the largest bottler for Coca Cola with operations in 20 countries through a strategic partnership with Castel. It also has a partnership with rivals, Diageo and Heineken known as Brand House. The partnership serves to manage their portfolio of premium spirits, rum, vodka, and cream liqueur in the South African market.

It has outgrown its original homeland to become a formidable multinational with market reach in all the continents and subcontinents. SAB Miller continues to scout for new opportunities to consolidate its business in-line with the industry approach. Revenue growth has been robust rising 10% with an EBITA margin of 18.6% (SAB Miller, 2013).

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