ENGLISH ABSTRACT: The research report entailed an investigation into the impact of the historical evolution ofSABMiller's corporate strategy on its global expansion, particularly into emerging markets.To this end, the demands of a rapidly changing global world on strategy and the relevanceand growing importance of emerging markets to organisations were explored. This entailedamongst others an examination of the considerations when expanding into emergingmarkets, their characteristics and challenges posed.It was found that in the modern business world, which is characterised by speed,uncertainty and turbulence, strategy implementation and evaluation are as important asstrategy formulation. It is vital that an organisation is flexible enough to change its strategiccourse if necessary and is able to set stretch objectives in order to become more inventiveand exhibit more urgency in improving its performance. Today's dynamic environmentrequires a revitalised approach to strategic thinking and organisations may have to developnew strategic capabilities and cultivate strategic resilience in order to successfully navigatethe challenges they face.Increased turbulence and uncertainty are not only characteristics of the global businessenvironment, but in many cases these circumstances are exacerbated in emergingmarkets. Emerging markets may very well require of organisations to be even moreinnovative and expand their strategic capabilities, but it was also shown that these marketsare becoming increasingly important to organisations.The reasons for a shift in perspectives on emerging markets are varied, including thatthese markets are no longer regarded as posing an unacceptably high risk, that they offerlarge markets with high population growth figures and that they often record much highereconomic growth figures than mature and saturated markets in developed countries.Data confirms that the economic output of emerging markets as a percentage of globaloutput is steadily increasing, their share of world export is growing and they are major oilconsumers. The fast growth of these markets, combined with the potential offered by theirsize, have led to forecasts that a key group of emerging markets will become the drivers oforganisational growth in the foreseeable future.An overview of the factors to be taken into consideration when expanding into emergingmarkets as well as the implications of expansion shows that organisations are required tobe creative and re-assess their own strengths and weaknesses in order to expand theirstrategic capabilities to be in line with the proposed expansion.Based on a literature review and an examination of case studies of the experiences oforganisations which have expanded into emerging markets, a number of findings weremade regarding important aspects to concentrate on, best practices and mistakes to avoidwhen entering emerging markets. This model for success was applied to SABMiller in orderto extract lessons learnt from the company's expansion into emerging markets.An analysis of SABMiller's history, its global expansion and its strategy helped provide apicture of how the company evolved and how it thinks and operates. It was found that bythe end of the 1980s the company had developed a number of core competencies andstrategic capabilities in South Africa that were geared towards expansion in emergingmarkets.These capabilities included that it understood conditions in emerging markets and was ableto deliver high quality and low cost products under particular conditions. Its managers hada "can do"-attitude and the ability to deal with diverse cultures. A number of findings weremade on the basis of the analysis of interviews conducted with senior managers atSAB Miller that can be used as general lessons for expansion into emerging markets.These can be grouped into the four themes also used to model the recommendations forsuccess in emerging markets drawn from literature and case studies.Firstly, from an operational point of view, SABMiller developed a number of best practicesfor operational excellence that were implemented during its expansion. These practicesdid, however, not become codified or prescriptive to the extent that they restrict localmanagers and could not be adapted to local circumstances. The best practices were ratherused to create an environment which encouraged a quest for the achievement ofexcellence in collaboration with local expertise. The company gave its managers support interms of expertise, but also allowed them freedom of action and allowed them to translatebest practices into the correct application for a particular context. SABMiller was hungry foropportunities, willing to make mistakes and learn lessons and its business model wasflexible enough to allow it to operate under emerging market conditions that presentedobstacles to many Western organisations.Secondly, in terms of finances and resources, the company found that even though theremight be less information or data available about local markets, it was able to analyse theinformation with its own tools and based on its own experiences, which made it morevaluable. SABMilier also did not apply a generalised approach to emerging markets, butrecognised the potential of smaller markets. It was willing to apply custom-madeapproaches to local markets and was able to craft fit for purpose-solutions based on anunderstanding that the underlying economic fundamentals underlying emerging marketsare different to those in Western markets. It applied financial rigour and built a reputationas an ethical operator focussed on growing sustainable businesses, yet its managers werestill comfortable with making gut-feel decisions because they had a good understanding ofcommercial relationships and economic fundamentals.Thirdly, as far as management lessons were concerned, SABMiller developed a nimbleand efficient operating model that gave its leaders the necessary flexibility to make faststrategic moves. The company went looking for opportunities in emerging markets, ratherthan having a business model that required a market which had to be big enough to sustaina Western way of working. In addition to this, its multi-dimensional approach to operatingand setting targets enabled it to seize opportunities where others couldn't, as it was willingto act as local operators, be joint-venture partners or even minority stakeholders.Its view of the beer business as a local business and its practice of executing everything itdid in a locally relevant way is a thread that runs through the company's entire approach,regardless of which market it operates in.Fourthly, its leadership and people can be highlighted as one of the most important factorsin SABMiller's successful expansion into emerging markets. The company's top leadershipdisplayed exceptional intellectual and emotional intelligence and an absolute commitmentto its expansion. The corporate culture, which emphasises personal responsibility,decentralisation, empowerment and a commitment to fair and sustainable business, can beregarded as critical to the company's success. In emerging markets, partnerships with localoperators were built on shared learning and experiences, humility and friendship. Thesenior managers at SABMiller deployed in these markets instilled trust and credibility andwere able to navigate difficult circumstances with sensitivity and diplomacy. SABMiller'semployees also displayed a number of traits referred to as the South African DNA. Theseinclude resourcefulness, tenacity, a pioneering spirit, the inability to see problems, anability to look for ingenious solutions and a flair for working with diverse people. As thecompany had recruited against these traits, it had an abundance of creative, inventive andvery determined employees in its arsenal when it started to expand, and the skills of itspeople gave SABMiller one of its most enduring advantages.Based on the research findings, a number of recommendations are made for the furtherdevelopment of organisational tools and methods, as well as further study andinvestigation. These include that processes be developed to help organisations re-align orexpand their strategic capabilities to be in line with an expansion into emerging marketsand that the alignment of strategy with emerging markets be studied further. It is alsorecommended that more research be done to explore the conditions in emerging marketsin order to broaden the field of knowledge on experiences in emerging markets. Thecharacteristics and abilities that are necessary for an organisation to remain locally relevantshould be investigated further. Finally, the link between the emerging market roots of anorganisation and its actions upon expanding should be studied more extensively in order toextract and quantify lessons and best practices.
