Discuss about the Business Analysis Strengths and Weaknesses.
The success of any business depends on how it translates its position in the domestic market into the international position. Companies wishing to engage in the international market need to be more proactive in their strategies so as to meet the ever challenging demands of the global market. A company should have laid down parameters which ensure stability in its 4Ps, which are, Price, Promotion, Product, and Place; this will assure the concerned firm to stay for long in the market and be able to stand the dynamics of the market such as inflation, competition and export levies.
In order to conclusively analyze the international approach to marketing by various companies, this paper aims to use East Africa Breweries Limited (EABL) as the case study of its research. The main focus of this paper is to study how EABL operates in the international market especially Africa, it also aims to analyze the market changes in terms of segmentation, the SWOT analysis of EABL and give recommendations on how EABL can improve its international market approach based on its strength. This paper used mainly secondary methods of data collection in order to obtain information on the market approach by EABL. This included reports from business journals, its websites and conducting online interviews with one of the departmental managers.
Overview of EABL
East Africa Breweries Limited (EABL) was founded in 1922 as Kenya Breweries Limited (KBL). In 1936 it changed into East Africa Breweries Limited (EABL) after it merged with the Tanganyika Breweries Limited (TBL). The headquarters of EABL is in Nairobi, Kenya and it has over 1775 employees (Economist, 2012). EABL is a beer manufacturing company with the following major shareholders:
- Diageo Kenya Limited- 42.82%
- Diageo Holdings Netherlands- 4.55%
- Board of Trustees NSSF Board- 4.48%
- Guinness overseas Limited- 2.62%
- CFC Stanbic Nominees- 2.43%
EABL is known for a variety of beer beverages that include the Kenya’s leading brand Tusker, others are Pilsner Ice, Bell Lager, Serengeti Premium Lager, Pilsner Extra, Guinness, Senator, Allsopps, and Smirnoff. It also ventures in spirits brands such as Vodka, Whisky, and Brandy. Tucker is the main brand of EABL with over 30% of the Kenyan beer and market sales of over 700000 hectoliters per year (Profitable credit card business empirical analysis of factors, 2009).
The current market situation for EABL is very competitive and at a times challenging. For instance, some of the challenges include threats of new entrants into the market, rivalry from other players in the same sector, substitute products, bargaining power of the buyers, suppliers, and new legislation introduced to control consumption of alcohol (European Journal of Business and Social Sciences, 2014). The notable competitors of EABL in African market include Keroche Brewers, South African Breweries (SAB) Millers, Heineken, London Distillers and the Kenya Wine Agency. Despite all these challenges the company has been able to control a bigger share of the market not only in the East Africa region but also all over Africa. This success in the market share is attributed to prompt marketing strategies such as commissioning of new brewery firm in Tanzania in 2011 and the acquisition of Serengeti Breweries; these were part of the long-term investment plans of the company.
Consumer analysis and market segmentations
The current market situation and consumer expectations are diversified. Every business organization has to analyze the consumer expectations and preference in order to meet the insatiable demands of their customers. Different sets of consumers always exhibit different patterns of shopping in what is referred to as market segments (Profitable credit card business empirical analysis of factors, 2009). In the African beer beverage market, consumers exhibit different patterns of consumption and preference to certain brands of beer and spirits. For instance, many low-income earners who cannot afford the expensive brands always go for cheaper brands such as spirits and traditional brews or liquor, and conversely the high-income earners go for the best beer brands in the market. All these are differences that EABL has to understand and come up with strategies to meet this heterogeneous nature of the African market.
Alcoholic beverage firms such as EABL and SAB Millers have come up with ways of dividing this heterogeneous market into smaller homogeneous submarkets that almost exhibit similar patterns of consumption. This is a strategy of trying to reach out to the unique consumption needs of their customers. This has seen EABL expand its markets from three distinct East African states, Kenya, Uganda, and Tanzania, to other neighboring countries such as Ethiopia, South Sudan, Rwanda and Burundi. The EABL market segmentation is done by considering the four characteristics as propounded by Sriwidadi and Gautama (2016), that the market must be identifiable, measurable, accessible and responsive; this will go along in ensuring profitability and longevity of the products of the firm.
The EABL Company has thrived in the market because of the strategies it has laid out in terms of advertisements, production of new brands, and constant pricing. This has greatly enabled it to satisfy many of its customers and of different calibers. Although, there is stiff competition from other companies working on the same products, these marketing strategies have seen its prosperity and it tries to invent new ideas and advancement.
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