StrategyProf

We open Chapter 6 with a chronicle of the Cola Wars (the market battle between Coke and Pepsi, primarily — by the way there is a nice update on Coke’s strategy getting a new jolt from CEO Neville Isdell in the May 15, 2006, issue of Fortune, pp. 77-78).  However, we have also noticed that our students like to study the dynamics of the beer industry as well. 

If you happen to have similarly-minded students, then you might open up a class discussion of — Change is brewing at Heinekin (Financial Times, May 9, 2006, p. 10 — www.ft.com ).  This article does a great job of laying out the five facets of the strategy diamond, showing the interdependence between formulation and implementation, and reinforcing the role that strategic leadership plays in effective strategy.  The beer story is a relatively easy one for students to get their arms around, since it is a global industry dominated by InBev, SABMiller, Anheuser-Busch, and Heineken. 

The inputs too are basic commodities like water, sugar, etc., and customers are segmented both by the channels (retail, bars and restaurants, and consumer), geography, and perceived beer quality.  Thus, students can talk to the arenas in value chain, geographic, and brand quality terms, the cost versus uniqueness differentiators, vehicles ranging from organic, to acquisition, to alliance-based growth, and different staging approaches (i.e., many brands in a market then moving to another geographic market, or taking the same brand across geographies).  It is interesting too to talk through the overarching economic logic of Heineken and other competitors as students can see how some players are going for a GE strategy — having 1st or 2nd brand in a market — or an overall market share strategy — or both (like Anheuser-Busch in the U.S.).

When we have taught about the beer industry, we have sometimes started with the Beer Indusry in China case by Eugene Salorio (see discussion of it at the BPS Teachign Toolkit). Again, this lets you get at the interesting interaction among the players, and then you can update a particular player like Heinekin using this FT article.  We have also found a nice complement in the A/V resources at www.cantos.com.  This site (must register but it’s free) has streaming video interviews from the beer industry executives at SABMiller, and a couple other beer biggies.  A really intriguing one is on SAB’s expansion strategy in Poland (SABMILLER in Poland: brand driven organic growth”), where it organically launches a new brand using a great resource-based logic.  You can help students see this logic in the staging of this move, show them how it is an example of a corporate resource that SAB seems to be able to leverage across markets, then ask the students to identify other ways they think that competing in Poland helps with SABMiller’s overall economic logic.  You can then again return to the Heineken example as a way to show them how they might think about connecting all the dots.