Thesis (MBA)--University of Stellenbosch, 2009. / ENGLISH ABSTRACT: The research report entailed an investigation into the impact of the historical evolution of SABMiller'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 relevance and growing importance of emerging markets to organisations were explored. This entailed amongst others an examination of the considerations when expanding into emerging markets, 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 as strategy formulation. It is vital that an organisation is flexible enough to change its strategic course if necessary and is able to set stretch objectives in order to become more inventive and exhibit more urgency in improving its performance. Today's dynamic environment requires a revitalised approach to strategic thinking and organisations may have to develop new strategic capabilities and cultivate strategic resilience in order to successfully navigate the challenges they face. Increased turbulence and uncertainty are not only characteristics of the global business environment, but in many cases these circumstances are exacerbated in emerging markets. Emerging markets may very well require of organisations to be even more innovative and expand their strategic capabilities, but it was also shown that these markets are becoming increasingly important to organisations. The reasons for a shift in perspectives on emerging markets are varied, including that these markets are no longer regarded as posing an unacceptably high risk, that they offer large markets with high population growth figures and that they often record much higher economic growth figures than mature and saturated markets in developed countries. Data confirms that the economic output of emerging markets as a percentage of global output is steadily increasing, their share of world export is growing and they are major oil consumers. The fast growth of these markets, combined with the potential offered by their size, have led to forecasts that a key group of emerging markets will become the drivers of organisational growth in the foreseeable future. An overview of the factors to be taken into consideration when expanding into emerging markets as well as the implications of expansion shows that organisations are required to be creative and re-assess their own strengths and weaknesses in order to expand their strategic capabilities to be in line with the proposed expansion. Based on a literature review and an examination of case studies of the experiences of organisations which have expanded into emerging markets, a number of findings were made regarding important aspects to concentrate on, best practices and mistakes to avoid when entering emerging markets. This model for success was applied to SABMiller in order to 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 a picture of how the company evolved and how it thinks and operates. It was found that by the end of the 1980s the company had developed a number of core competencies and strategic capabilities in South Africa that were geared towards expansion in emerging markets. These capabilities included that it understood conditions in emerging markets and was able to deliver high quality and low cost products under particular conditions. Its managers had a "can do"-attitude and the ability to deal with diverse cultures. A number of findings were made on the basis of the analysis of interviews conducted with senior managers at SAB 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 for success in emerging markets drawn from literature and case studies. Firstly, from an operational point of view, SABMiller developed a number of best practices for operational excellence that were implemented during its expansion. These practices did, however, not become codified or prescriptive to the extent that they restrict local managers and could not be adapted to local circumstances. The best practices were rather used to create an environment which encouraged a quest for the achievement of excellence in collaboration with local expertise. The company gave its managers support in terms of expertise, but also allowed them freedom of action and allowed them to translate best practices into the correct application for a particular context. SABMiller was hungry for opportunities, willing to make mistakes and learn lessons and its business model was flexible enough to allow it to operate under emerging market conditions that presented obstacles to many Western organisations. Secondly, in terms of finances and resources, the company found that even though there might be less information or data available about local markets, it was able to analyse the information with its own tools and based on its own experiences, which made it more valuable. SABMilier also did not apply a generalised approach to emerging markets, but recognised the potential of smaller markets. It was willing to apply custom-made approaches to local markets and was able to craft fit for purpose-solutions based on an understanding that the underlying economic fundamentals underlying emerging markets are different to those in Western markets. It applied financial rigour and built a reputation as an ethical operator focussed on growing sustainable businesses, yet its managers were still comfortable with making gut-feel decisions because they had a good understanding of commercial relationships and economic fundamentals. Thirdly, as far as management lessons were concerned, SABMiller developed a nimble and efficient operating model that gave its leaders the necessary flexibility to make fast strategic moves. The company went looking for opportunities in emerging markets, rather than having a business model that required a market which had to be big enough to sustain a Western way of working. In addition to this, its multi-dimensional approach to operating and setting targets enabled it to seize opportunities where others couldn't, as it was willing to 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 it did 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 factors in SABMiller's successful expansion into emerging markets. The company's top leadership displayed exceptional intellectual and emotional intelligence and an absolute commitment to its expansion. The corporate culture, which emphasises personal responsibility, decentralisation, empowerment and a commitment to fair and sustainable business, can be regarded as critical to the company's success. In emerging markets, partnerships with local operators were built on shared learning and experiences, humility and friendship. The senior managers at SABMiller deployed in these markets instilled trust and credibility and were able to navigate difficult circumstances with sensitivity and diplomacy. SABMiller's employees also displayed a number of traits referred to as the South African DNA. These include resourcefulness, tenacity, a pioneering spirit, the inability to see problems, an ability to look for ingenious solutions and a flair for working with diverse people. As the company had recruited against these traits, it had an abundance of creative, inventive and very determined employees in its arsenal when it started to expand, and the skills of its people gave SABMiller one of its most enduring advantages. Based on the research findings, a number of recommendations are made for the further development of organisational tools and methods, as well as further study and investigation. These include that processes be developed to help organisations re-align or expand their strategic capabilities to be in line with an expansion into emerging markets and that the alignment of strategy with emerging markets be studied further. It is also recommended that more research be done to explore the conditions in emerging markets in order to broaden the field of knowledge on experiences in emerging markets. The characteristics and abilities that are necessary for an organisation to remain locally relevant should be investigated further. Finally, the link between the emerging market roots of an organisation and its actions upon expanding should be studied more extensively in order to extract and quantify lessons and best practices. / AFRIKAANSE OPSOMMING: Die navorsingsverslag het 'n ondersoek behels na die impak van die historiese evolusie van SABMilier se korporatiewe strategie op die maatskappy se globale uitbreiding, spesifiek in ontluikende markte. Met die doel in gedagte is die vereistes wat 'n snel veranderende globale wereld aan strategie stel en die relevansie en toenemende belangrikheid van ontluikende markte vir organisasies bestudeer. Dit het onder andere 'n studie van die faktore wat in ag geneem moet word wanneer uitgebrei word na ontluikende markte, hul karaktereienskappe en die uitdagings in die markte ingesluit. Daar is bevind dat die implementering van strategie in die moderne sakewereld, wat gekenmerk word deur spoed, onsekerheid en ontstuimigheid, net so belangrik is soos die formulering van strategie. Dit is noodsaaklik dat 'n organisasie soepel genoeg is om, indien nodig, sy strategiese koers te verander. Die organisasie moet ook in staat wees om grensverskuiwende doelwitte te stel sodat hy meer innoverend kan word en sy prestasie met meer dringendheid verbeter. Die hedendaagse dinamiese omgewing vereis 'n hersiene benadering tot strategiese denke en dit mag nodig wees vir organisasies om nuwe strategiese vaardighede en strategiese veerkragtigheid te ontwikkel om hulle in staat te stel om uitdagings te bowe te kom. Meer ontstuimigheid en onsekerheid is nie net kenmerkend van die globale sakeomgewing nie, maar is ook in baie gevalle in 'n erger graad in ontluikende markte teenwoordig. Dit mag vir organisasies nodig wees om in ontluikende markte selfs meer innoverend te wees en hulle strategiese vaardighede uit te brei, maar selfs te midde van die uitdagings word ontluikende markte vir organisasies al hoe meer belangrik. Daar is 'n verskeidenheid redes vir die verandering in persepsies oor ontluikende markte, insluitend dat die markte nie meer beskou word as markte wat onaanvaarbare hoe risiko's inhou nie. Verder bied ontluikende lande groot markte met snelgroeiende bevolkingsyfers en baie vinniger ekonomiese groei as die volwasse en versadigde ekonomiee in ontwikkelde lande. Data bevestig verder dat die ekonomiese uitset van ontluikende markte as 'n persentasie van globale uitset besig is om te styg, dat hulle aandeel van wereldwye uitvoer toeneem en dat hulle groot verbruikers van olie is. Die vinnige groei in die markte, gesien saam met die potensiaal opgesluit in hul grootte, het gelei tot vooruitskattings dat 'n sleutelgroep ontluikende lande in die afsienbare toekoms die enjins van organisatoriese groei gaan word. 'n Oorsig van die faktore wat in ag geneem moet word wanneer uitgebrei word na ontluikende markte en die implikasies van uitbreiding dui daarop dat organisasies kreatief te werk sal moet gaan en hul eie sterkpunte en swakhede sal moet heroorweeg om te sorg dat hulle strategiese vermoens in pas is met die beoogde uitbreiding. Op grond van 'n literatuurstudie en 'n ontleding van gevallestudies is 'n aantal bevindings gemaak aangaande belangrike aspekte waarop gefokus moet word, beste praktyke en foute wat vermy moet word wanneer uitgebrei word na ontluikende markte. Die model vir sukses is op SABMiller toegepas met die oog daarop om lesse te kan leer uit die maatskappy se uitbreiding. 'n Ontleding van SABMiller se geskiedenis, die maatskappy se globale uitbreiding en sy strategie het bygedra daartoe om 'n prentjie te skets van hoe die maatskappy ontwikkel het, hoe hy dink en hoe hy te werk gaan. Daar is bevind dat die maatskappy teen die einde van die 1980s in Suid-Afrika 'n aantal strategiese vermoens en sleutelbevoegdhede ontwikkel het wat hom goed geposisioneer het vir uitbreiding na ontluikende markte. Die vermoens het ingesluit dat die maatskappy omstandighede in ontluikende markte goed verstaan het en in staat was om onder die besondere omstandighede produkte van hoe kwaliteit en teen 'n lae koste te lewer. Die maatskappy se bestuurders het 'n houding gehad dat alles moontlik is en kon met diverse kulture saamwerk. 'n Aantal bevindings wat gebruik kan word as algemene lesse vir uitbreiding na ontluikende markte is gemaak op grond van 'n ontleding van onderhoude wat gevoer is met senior bestuurders van SABMiller. Die bevindings kan in vier temas gegroepeer word wat ooreenstem met die model vir sukses wat ontwikkel is op grond van die literatuurstudie en ontleding van gevallestudies. Eerstens, uit 'n operasionele oogpunt gesien, het SABMiller 'n aantal beste praktyke vir operasionele uitnemendheid ontwikkel wat toegepas is in die uitbreidingsproses. Die praktyke is egter nie tot so 'n mate gekodifiseer of voorskriftelik gemaak dat dit plaaslike bestuurders aan bande gele het nie. Die beste praktyke is gebruik om 'n omgewing te skep wat die behaling van uitnemendheid in samehang met plaaslike kenners aangemoedig het. Die maatskappy het sy bestuurders die nodige ondersteuning in terme van kennis gegee, maar hulle ook die vryheid gegee om beste praktyke op die mees toepaslike manier vir die plaaslike omstandighede toe te pas. SABMiller was honger vir geleenthede en bereid om foute te maak, en die maatskappy se sakemodel was soepel genoeg dat hy kon funksioneer onder omstandighede in ontluikende markte wat vir baie Westerse organisasies 'n struikelblok was. Tweedens, in terme van finansies en hulpbronne, het die maatskappy gevind dat daar wel minder inligting beskikbaar was oor plaaslike markte, maar hy kon sy eie vaardighede en kennis gebruik om die inligting te ontleed, wat dit meer waardevol gemaak het. SABMiller het ook nie 'n veralgemenende benadering tot ontluikende markte gehad nie, en hy kon die potensiaal in kleiner markte raaksien. Die maatskappy was bereid om doelgemaakte benaderings tot plaaslike markte te gebruik en spesifieke oplossings vir bepaalde omstandighede te ontwikkel. Die oplossings was gegrond op 'n begrip dat die onderliggende ekonomiese beginsels in ontluikende markte verskil van die in Westerse markte. Derdens, wat lesse ten opsigte van bestuursvaardighede aanbetref, het SABMiller 'n rats, snelvoetige en doeltreffende bedryfsmodel ontwikkel wat die nodige ruimte geskep het vir sy leiers om vinnige strategiese skuiwe te kan maak. Die maatskappy het vir geleenthede in ontluikende markte gaan soek, in teenstelling met Westerse organisasies wat net hul sake in markte kon bedryf wat groot genoeg was om hulle Westerse werkswyse te ondersteun. Verder het die maatskappy 'n meerdimensionele werkswyse en benadering tot die stel van doelwitte, wat beteken dat hy geleenthede kon aangryp waar ander dit nie kon doen nie. Dit is onder andere moontlik gemaak omdat hy bereid was om as 'n plaaslike operateur, gesamentlike ondernemingsvennoot of selfs minderheidsaandeelhouer te werk. Vierdens kan sy leierskap en mense uitgelig word as een van die mees belangrike faktore wat bygedra het tot SABMilier se suksesvolle uitbreiding na ontluikende markte. Die maatskappy se top-bestuurslui het uitsonderlike inlellektuele en emosionele intelligensie aan die dag gele en was absoluut verbind tot die uitbreiding. Die korporatiewe kultuur, wat klem lê op persoonlike verantwoordelikheid, bemagtiging en 'n toewyding tot regverdige en volhoubare sakepraktyke, kan beskou word as 'n sleutelfaktor in die maatskappy se sukses. In ontluikende markte is vennootskappe gegrond op gedeelde ervaring en lesse wat geleer is, nederigheid en vriendskap. Die senior bestuurders wat SABMilier na ontluikende markte gestuur het was geloofwaardig en het vertroue ingeboesem, en hulle kon moeilike omstandighede met die nodige sensitiwiteit en diplomasie hanteer. SABMiller se werknemers het ook 'n aantal eienskappe aan die dag gele wat beskryf word as 'n Suid-Afrikaanse DNS. Die eienskappe het ingesluit vindingrykheid, deursettingsvermoe, 'n ontdekkingsgees, die onvermoe om probleme te sien, die vermoe om vernuftige oplossings te vind en 'n besondere aanleg om met uiteenlopende mense te werk. Die maatskappy het ook werknemers met die soort profiele gewerf, en het hy het dus ten tye van sy uitbreiding 'n arsenaal kreatiewe, innoverende en uiters vasbeslote werknemers gehad as een van sy mees blywende voordele. Op grond van die bevindings in die verslag word 'n aantal aanbevelings gemaak ten opsigte van die ontwikkeling van hulpbronne vir maatskappye en areas wat verder ondersoek en bestudeer kan word. Dit sluit in dat prosesse ontwikkel word om organisasies te help om hul strategiese vaardighede aan te pas by uitbreiding na ontluikende markte en dat die rig van strategie op ontluikende markte verder ondersoek word. Dit word ook aanbeveel dat verdere navorsing gedoen word oor die omstandighede in ontluikende markte om die kennisveld oor organisasies se ervarings in ontluikende markte uit te brei. In die laaste instansie moet die eienskappe en vaardighede wat organisasies nodig het om plaaslik relevant te bly, verder bestudeer word. Die verband tussen die historiese wortels van 'n organisasie in 'n ontluikende mark en die organisasie se optrede wanneer hy uitbrei moet ook verder ondersoek word om lesse en beste praktyke te formuleer.