Should Anheuser-Busch respond aggressively to the product proliferation that’s occurred in this industry? Should it lower its prices significantly to win back share from Miller?
This is a three-part discussion questions pertaining to the attached Anheuser-Busch Case. Please Detailed Questions
The Anheuser-Busch Case: Part 1
Brand Capital: advertising; consistency of expenditures, message
* How much does A-B spend annually on advertising? Isn’t it less than rivals on a per-barrel basis? How can less spending lead to a brand advantage?
* How long has the Budweiser brand been around? Have they been investing over this entire period?
Product Profile: Bud Dry with 2.5% market share in one year, but Bud Dry cut into Budweiser traditionally, a single brand
Manufacturing Capacity: 12 plants; $300 m apiece; incremental investment.
The Anheuser-Busch Case: Part 2
What has been Miller’s strategy since its acquisition by Philip Morris in 1971? Has Miller also been a steady moderate performer?
* How did Miller’s strategy change with the Philip Morris acquisition?
* Was the success of Lite something that Anheuser-Busch should keep in mind as it assesses the threat from this competitor? How damaging was Lite to A-B’s position?
* How has Miller’s success affected Anheuser-Busch’s market share?
* What are Philip Morris’ goals for this business? Is the company targeting moderate profitability? Has Miller achieved significant profitability?
You may want to look at the following in relation to Miller: Transfer of skills from Philip Morris, new product based on demographic shifts, extensive advertising and distribution support.
The Anheuser-Busch Case: Part 3
Do microbreweries and brewpubs promise to change the structure of the U .S. brewing industry? Why was there product proliferation and price discounting around 1990?
* Should Anheuser-Busch respond aggressively to the product proliferation that’s occurred in this industry? Should it lower its prices significantly to win back share from Miller?
* What’s the most aggressive option available to Anheuser-Busch? Is it likely to knock Miller out of play? Would it hurt A-B’s profitability? Could A-B easily retrench to the old model if it were unsuccessful with a more aggressive approach?
* What’s the worst-case scenario if A-B takes a less aggressive approach? Is A-B likely to lose share rapidly? Has this product proliferation cost A-B a lot more than Miller so far?
* What should A-B do? Should it take the most aggressive approach?