Executive Summary of Anheuser-Busch Companies, Inc.
Anheuser-Busch Companies, Inc. continually seeks opportunities to maximize shareholder value and increase efficiency. Through their extremely effective marketing
strategies A-B has gained control of over 47% of the global market share. In the process of doing this, Anheuser-Busch has become one of the most recognizable trademarks.
This is not without its faults though. Anheuser-Busch’s aggressive advertising campaign has targeted more than who they bargained for. Through A-B’s catchy advertisements, they have attracted customers other than the 21+ age group, and recreational drinkers.
It is the opinion of many researchers that Anheuser-Busch is negligent in their advertising, and insists that changes need to be made. Through proper regulation of their advertising, consumers would be allowed to make choices free of media persuasion.
Situation Analysis
Environment:
Cooperative
Anheuser-Busch Companies, Inc. continually seeks opportunities to maximize shareholder value and increase efficiency. As noted in the Annual Report for 1999, Anheuser-Busch remains focused on three major objectives to enhance shareholder value:
Increasing per barrel profitability which, when combined with continued market share growth, will provide solid long-term earnings per share growth.
Profitable expansion of international beer operations by building the Budweiser brand worldwide and making selected investments in leading brewers in key international beer growth markets. The company has made significant marketing investments to build Budweiser brand recognition outside the United States and operates overseas breweries in China and the United Kingdom. The company also has a significant equity position in Grupo Modelo, Mexico’s largest brewer and producer of the Corona brand.
Continued support of profit growth in packaging and entertainment operations. Packaging operations provide significant efficiencies, cost savings and quality assurance for domestic beer operations, while entertainment operations enhance the company’s corporate image by showcasing it’s heritage, values and commitment to quality and social responsibility to 19 million visitors annually as well as adding their profit contribution.
The company’s strong commitment to achieve these objectives benefits a...
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...th the regulations.
Works Cited
1999 Annual Report, Anheuser-Busch Companies
“Anheuser-Busch Announces Record Sales and Earnings for the Fourth Quarter and Full Year 1999; Worldwide A-B Brand Shipments Exceed 100 Million Barrels.” Business Wire, 2/2/2000. Online. Electric Library.
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“Tax and Sin in Moderation.” St. Louis Post-Dispatch 2/26/98. Electric Library.
From our research, Anheuser-Busch is content with being the number one beer company in the world, increasing sales each year in operation. We found that Anheuser-Busch met many views associated with the world, business, and behavioral dimensions. The company also displayed its stability as we reviewed one of its most successful products Budweiser, owned by Anheuser-Busch, under the marketing view and the financial view. Not only do they hold almost half of the market share in the industry but their stock prices, sales volume, and net sales have all increased from 2002 to 2003. We also looked at Budweiser in terms of geography and culture. We found due to the fact that the "western" countries consume the majority of beer, it only makes sense that Anheuser-Busch concentrates on that market. Along these lines, another key goal that is also important to Anheuser-Busch is to boost other beer markets that are located in other cultures, where at the time beer is not a major consumption.
First, there was a key fact in the marketing strategy. In 1996, there was a turning point in the area of marketing for NBB when Greg Owsley was hired as the Director. Owsley developed a team tha...
Alternative #1: Focus differentiation and creating a joint venture with Molson Coors Canada with more than 51% of the total shares.
Using consumer survey information, we devised a metric for calculating and projecting Coors market share. While only 300 customers were surveyed (Research Study G), we made an assumption that this sample sufficiently represents the preferences of the greater population in the two-county market area. We also assumed that attitudes toward Coors were equally distributed amongst consumer weekly beer consumption levels. Then, we forecasted Coors market share by multiplying the percentage of people with a certain preference by the Coors purchase percentage for that preference. We projected an anticipated market share range, between 13.7% and 21.5%, illustrated in Exhibit 2. Calculations relied upon customers’ “Attitude Toward Coors” because we felt this measure was more indicative of regular purchasing frequency than simply an “Intention to Buy Coors”.
Diversificationthey have recently entered into other industries to achieve more growth such as the Philip Morris Capital Corporation. This is an investment company whose portfolio consists of leveraged and direct finance lease investments and other tax-oriented and third party financing. Altria also has 28.6 percent interest in SABMiller, which is the world's second largest brewer (Altria, 2008).
Alcohol plays a major role in society today. It is constantly being in our minds through advertisements, whether its commercials or
In additon, Anheuser Busch Company also owns a soft drinks business that has bottling contracts with PepsiCo through its subsidiary, Ambev. In December 2016, Coca-Cola Co. bought many of the former SABMiller's Coca Cola operations, including those in
"Young People's Drinking." International Center for Alcohol Policies Meetings & News Press Releases Welcome to ICAP. 2011. Web. 22 Mar. 2011. .
The Boston Beer Company is able to obtain relatively low-cost funds for their working capital and expenditures. The company is constantly in search of the lowest cost items without suffering the quality of their products. The company has thrived and has been able to expand to become successful due to their ability to achieve this.
Alcoholics that are trapped so deep in the spell of alcoholism are leaving a legacy behind for those who continue to make alcohol companies millions of dollars by ruining their lives, making the wrong investment every time they purchase a bottle of alcohol; to them an “alternative route” to mask any issues they might be encountering at a particular time in their lives, and to those alcohol-making companies they are walking fortunes—walking billboards. Advertisement ads for these products continue targeting not only the already alcoholics, but also targeting underage drinkers. These alcohol-making companies can argue differently and have sworn to not be so focused on targeting people under 21. “Alcohol advertisers have pledged to comply with self-regulatory codes designed to limit t...
Youngerman, Barry. The Truth about Alcohol. Ed. Mark J. Kittleson. New York: Facts on File, 2005. Print.
As larger beer corporations move toward this growing market, NBB will have to develop measures to maintain market share (Gorski, 2013).
Information: Failure to provide good information (a public good) is a major cause of market failure and brings about the consequences of drinking alcohol hence reducing the efficiency of the market. Evidence suggests that advertising has strong detrimental effect on consumption, particularly for youth. (Saffer and Dave, 2003). The development of Markets promoting alcohol consumption benefits the industry groups however no such private incentives provide information that presents the negative consequences of consumption.
The beverage industry is highly competitive and presents many alternative products to satisfy a need from within. The principal areas of competition are in pricing, packaging, product innovation, the development of new products and flavours as well as promotional and marketing strategies. Companies can be grouped into two categories: global operations such as PepsiCo, Coca-Cola Company, Monster Beverage Corp. and Red Bull and regional operations such as Ro...
Swayne, Matthew, and Andrea Messer. "Alcohol and Tobacco Advertising Bans Don't Work." Penn State University. Penn State University News, 16 Sept.