Page 6 - AB INBEV 2018 Case Study 2

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A. Revenue and profit statistics:
Revenue (1) Profit (2)
Target Actual Target Actual
(US$ m) (US$ m) (US$ m) (US$ m)
Company overall 200 240 30 32
Dengzhou Dengzhou City Depot shares same borders to the North of Mengzhi and 16 15 2.4 2.3
holds 8% of China’s city population.
Langfang Langfang City Depot shares same borders to the South of Mengzhi and 14 18 2.1 2.4
holds 12% of China’s city population.
Mengzhi Mengzhi City Depot is situated in same city of AB InBev’s largest brewery 12 14 1.8 2.2
(the brewery went operational 15 months ago). The city holds 5% of
China’s city population.
Rongcheng Rongcheng City Depot is situated in same city where China Resources’s 18 22 2.7 2.8
largest brewery is located and holds 25% of China’s city population.
Note: To calculate each city depot’s points, it is essential that actual profit as a percentage of actual revenues must exceed the profit (%).

B. Customer care and service delivery statistics:
Actual
Measure (% of total) Target Dengzhou Langfang Mengzhi Rongcheng
% % % % %
1. Late delivery of goods (drinks) 2 1.9 2.1 1.8 2.4
2. Misdirected delivery of goods (drinks) 4 4.2 3.9 3.3 5.1
3. Delayed response to (supermarket) complaints 1 0.7 0.9 0.8 1.2
4. Delays due to delivery truck breakdown 1 1.1 1.4 0.3 2
Measure (% of revenue)
5. Lost items (collected returns being misplaced) 1 0.6 0.9 0.8 1.9
6. Damaged items (breakages) 2 1.5 2.4 1.5 1.8

C. Credit control and administrative efficiency statistics:
Actual
Target Dengzhou Langfang Mengzi Rongcheng
% % % % %
7. Average debtor weeks 2 1.9 2.1 1.8 2.4
8. Debtors in excess of 60 days (% of total) 4 4.2 3.9 3.3 5.1
9. Invoice queries (% of total) 1 0.7 0.9 0.8 1.2
10. Credit notes (% of revenue) 1 1.1 1.4 0.3 2
Note: City depots operate all year round.

Innovation Strategy
On the ’B2B and Downstream Supply Chain Strategy in Southern Africa’ issue, the Board had decided to

adopt strategy 4: introducing new technologies to reduce the level of cost-generating activities. The strategy
had evolved into a business case for the creation of a global innovation unit within AB InBev (called Zx
Ventures) under the leadership of Pedro Earp, Chief Disruptive Growth Officer. Launched 6 months ago,
its mandate is to develop new products and businesses that address emerging consumer needs by
operating multiple business units of varying adjacency to the AB InBev core -being beer. The progress of
the unit to date is best captured by International Business Review (Appendix 3, p.13).

Zx Ventures is seeking to streamline AB InBev to better serve its many small as well as large customers
(including major retailers: Walmart, Tesco, Shoprite, Pick n’ Pay and Makro). "We decided to move to one
The CFO Case Study Competition 2018 (Grand Finale Pack)
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