Louise Philbrick

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ANHEUSER-BUSCH COMPANIES, INC.
Louise Philbrick Keith Grant David Guerra
All pictures from anheuserbusch.com
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Overview

• Strategic analysis
• SWOT Matrix
• Space Matrix
• Grand Strategy Matrix
• BCG
• IE Matrix
• Strategic Summary
• Possible Strategies
• QSPM
• Decisions
• Implementation

• History
• Who we are today
• Vision and Mission
• External Audit
• EFE
• CPM
• Internal Audit
• IFE

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History

• 1852- George Schneider founded Bavarian Brewery
  in St.Louis Missouri
• 1857- Adolphus Busch arrived in St. Louis
• 1860- Eberhard Anheuser acquired Bavarian Brewery

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History

• 1870s
• Production 18,000 Barrels
• Anheuser Busch became 1st U.S. Brewery to adopt
  the use of pasteurization
• 40 Refrigerated railcars
• 1880s
• Acquired rights to bottle and sell
  Budweiser(01-24-1880)
• Production 739,951 Barrels

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History

• 1881
• Adolphus Busch Glass Manufacturing Company began
  Production

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History

• 1901
• 1st time to break the million barrel mark within
  a year 1,006,494
• 1920
• Jan 16th National Prohibition took affect
• Began production of other goods ex ginger ale,
  root beer, ice cream, and malt syrup
• 1933
• Prohibition repealed

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History
1940- surpassed the three million barrel
mark 1953- Clydesdales first appeared in the
tournament of Roses Parade 1961- Michelob was for
the first time sold in bottles
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History

• 1974
• The 30 million barrel mark was passed
• 1980
• Anheuser Busch signed a licensing agreement with
  Labette Brewing Company of Canada to brew and
  sell Budweiser in Canada

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History

• 1991
• Federal excise tax doubled on beer
• 2000
• 20th Anniversary of companies listing on NYSE
• Total global volume 121.3 million barrels
• 2001
• Bud light became the 1 selling beer in the U.S.
• 2002
• Anheuser Busch 150th Anniversary

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Who we are Today

• Anheuser-Busch Companies business segments
  consist of domestic beer, international beer,
  packaging, entertainment and other.

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Who We Are Today

• The domestic beer segment consists of the
  Company's United States beer manufacturing and
  wholesale sales operations.
• ABI has 12 deliberately placed domestic breweries
  to maintain an effective nationwide distribution.
• Besides its St. Louis headquarters,
  Anheuser-Busch Inc. operates breweries in
  Baldwinsville, N.Y. Cartersville, Ga. Columbus,
  Ohio Fort Collins, Colo. Houston Jacksonville,
  Fla. Los Angeles Fairfield, Calif. Merrimack,
  N.H. Newark, N.J. and Williamsburg, Va.
• ABI sells approximately 2.5 times the volume of
  its closest domestic competitor

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Who We Are Today

• The international beer segment consists of export
  sales and overseas beer production and marketing
  operations, administration of contract and
  license brewing arrangements and equity
  investments.
• In 2002 global sales reached 8 million barrels
• ABI has established business with China, Japan,
  Brazil, India, Italy, France, Switzerland, and
  Spain since 1993
• They have expanded their international market so
  much because of all the changes i.e.. growing
  prosperity in Latin America, and nations shifting
  their preference from traditional wine drinking
  towards beer

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Who We are Today

• The packaging segment is composed of the
  Company's aluminum beverage can and lid
  manufacturing, aluminum recycling, label printing
  and glass manufacturing operations.
• Anheuser Busch is the worlds largest recycler of
  aluminum beverage containers

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Who We are Today

• The firms packaging operations are handled
  through the following subsidiaries
• Metal Container corporation
• Manufactures cans and lids for ABI
• Anheuser-Busch Recycling Center
• Recycles aluminum cans at the plant located in
  CA.
• Is the world largest recycler of aluminum cans,
  also help to reduce production cost

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Who We are Today

• Precision Printing and Packaging
• Produces more than 25 million labels for ABI and
  other companies at its location in Tennessee.
• Provides 80 of Anheuser Buschs labels
• Eagle Packaging Inc.
• Supplies all ABI liner material.
• Longhorn Glass Corporation
• Produces over 60 of the glass bottles that are
  used in the Huston brewery.

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Who We are Today

• The entertainment segment consists of its theme
  park operations, and real estate operations.
• Busch Entertainment Corporation (BEC) operates
  Busch gardens in three cities, Sea World in three
  cities, along with Adventure Island, Water
  Country USA, Sesame Place, and Discovery Cove.

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Who we are Today

• Anheuser Busch subsidiary Busch Properties Inc.
  (BPI) owns and operates The Kingsmill Resort and
  Conference Center in Virginia.

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Competitors

• The Miller Brewing Company
• 2nd largest brewery in the US is the
• With sales in over 80 countries
• Offers over 50 brands of beer

• The Adolph Coors Brewing Company
• 3rd largest brewery in the country
• Among Coors product Coors Light is the 4th
  largest selling beer in the nation

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Vision Statement

• through all of our products, services and
  relationships, we will add to lifes enjoyment

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Current Mission Statement

• Anheuser-Buschs mission is to ensure the
  following three goals are met
• Be the Worlds beer company
• Enrich and entertain a global audience
• Deliver superior returns to our shareholders

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Proposed Mission Statement

• Anheuser-Busch Companies, Inc. is a global
  company (3) that is committed to being the leader
  in both domestic and international beer markets,
  enriching and entertaining a global audience, and
  delivering superior returns to our shareholders
  with strategic real estate investments and
  packaging operations (2,7). Through
  technologically improved (4) products and
  services (4) Anheuser strives to achieve
  sustainable growth and profits for all
  stakeholders (5,9). We emphasize responsible
  consumption, preservation and protection of the
  environment, and exceeding customer expectations
  in all our operations (6,8).

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External Audit

• Opportunities
• Governmental restrictions are much lower in the
  countries that Anheuser-Busch is expanding to
• There has been a noticeable shift in consumer
  preferences toward beer in traditional
  wine-drinking countries.
• An expected increase in the domestic number of
  beer drinkers over 21 should contribute an
  additional 1 annual gain in beer sales for the
  next few years
• Demand for American brews in Asia, Latin America,
  and Europe is growing
• Quickly growing populations in developing
  international markets
• Americans have experienced annual increases in
  disposable income since 2000.

• Threats
• The domestic beer marketplace is highly regulated
  
• There have been sharp increases in federal excise
  taxes on alcoholic beverages
• International breweries and microbreweries
  expanding into the USA
• Domestic population only increases at an annual
  rate of about one percent. (limited growth
  potential for domestic beer and entertainment
  operations)
• Changes in peoples disposable income may have
  unfavorable effects

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EFE Matrix
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EFE Matrix
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Competitive Profile Matrix
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IFE Matrix
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Financial Ratio Analysis
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SWOT Matrix
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Space Matrix
Conservative
Aggressive
Competitive
Defensive
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BCG Matrix
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IE Matrix
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Grand Strategy Matrix
RAPID MARKET GROWTH
Quadrant II
Quadrant I
WEAK COMPETITIVE POSITION
STRONG COMPETITIVE POSITION
Strategies 1. Concentric diversification 2.
Horizontal diversification 3. Conglomerate
diversification 4. Joint venture
Anheuser-Busch
Quadrant III
Quadrant IV
SLOW MARKET GROWTH
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Net Worth Analysis

• SE Additional paid in capital retained
  earnings
• 3.052B 1.025B
  12.544B
  16.62B
• 12/31/02 Net Income x 5
• 1.934B x 5 9.67B
• Share Price (1/1/02) / EPS (1/1/02) x avg. net
  income (3 years)
• 45.21 / 1.91 x 1.73B
  
  4.09B
• Number of shares outstanding x share price
• 866M x 48.40
  
  4.19B
• Method average
  
  8.64B

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Strategic Summary
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Possible Strategies

• Increase presence in Asian, eastern European, and
  Latin American markets
• Unload less profitable theme parks and possibly
  expand the more profitable parks
• Continue to dominate market share with extensive
  advertising
• Increase education on responsible consumption to
  maintain good public image

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QSPM
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QSPM
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Decisions

• Primary
• Increase presence and awareness in Asian, eastern
  European, and Latin American markets
• Possibilities
• Continue to dominate market share with extensive
  advertising
• Increase education on responsible consumption to
  maintain good public image
• Unload less profitable theme parks and possibly
  expand the more profitable parks

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Implementation

• Invest 182 million over three years in Tsingtao
  Brewery Company, Ltd. Of China. This investment
  will increase Anheuser-Buschs equity interest to
  27 of Tsingtao.
• Invest if needed 165 million in Compania
  Cervecerias Unidas S.A. (CCU), the largest
  brewery in Chile. This investment would increase
  Anheuser-Buschs equity interest in CCU from 20
  to 30, and would make Anheuser-Busch products
  more available in the Latin American markets.

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Anheuser-Busch in the Media