Page 4 - AB INBEV 2018 Model Answer 2

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is made worse by uncompetitive remuneration structures operated by SABMiller, resulting in loss of
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critical skills. This is ranked 3 because it mainly affects our Africa (or Nigeria) strategy, whilst issues
1 and 2 above directly impact our overall (global) strategy. We recommend you implement a new

performance-based remuneration strategy for Nigeria!

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4 Priority: Competitor Activity (In China)
Heineken’s gains at our expense in Nigeria seems to have emboldened them to also challenge us in
China. Having acquired 40% of China Resources, the leading brand in that country, they have finally
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corrected their major obstacle to growth -lack of distribution capacity. This is 4 priority because, unlike
in issues 1, 2 and 3 above, it does not directly impact our Africa and SABMiller integration strategy,
which is our main priority at this time. We recommend a detailed operational audit of our current
distribution system should be conducted -especially in the China Resources strongholds!

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5 Priority: Innovation Strategy
We have a unique opportunity to boost sales by implementing an e-commerce strategy. The real issue
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is whether it is best to proceed by implementing our own e-commerce platform, or use 3 party
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platforms such as Amazon and Alibaba; or maybe not even try this! This is the 5 priority because it
is discretionary strategy; although with global impact (beyond Africa where our priority is at this time),
its implementation may unsettle our global customers, as it is tantamount to venturing into direct

retailing, the dangers of which we had warned you in our initial report. We recommend you proceed
with own e-commerce platform, but take steps to incentivize supermarkets to come along!

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A single ethical dilemma, embedded in the 1 issue, has been discussed separately in 4.

Developed by The CharterQuest Institute for 'The CFO Case Study Competition 2018'
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