Following the IRL pressures framework, compare and contrast AB InBev's strategy, structure, and performance with that of one or more other firms operating in a similar industry (That is, beer). Comment on the similarities/differences in their foreign market strategy, structure and performance. Which strategy and structure would you recommend for each firm and why?

AB InBev vs Heineken AB InBev Strategy AB InBev uses a global strategy because the global integration or cost pressures are high and the local responsiveness pressures are low. The marketing approach of the company is standardized with global inputs and the company coordinates competitive moves globally. Globally the company owns more than 500 iconic brands. The knowledge creation is done in both headquarters and local subsidiaries and shared for local or global use via headquarters. Structure The structure of AB InBev is a Centralized Hub. The key decisions and responsibilities are centralized. The key assets of the company are also centralized. Tight control is exercised by the headquarters and the subsidiaries are coordinated and controlled by the headquarters. The control at the level of subsidiaries is weak but the linkages between headquarters and subsidiaries are strong. Large-scale production is done in the best and most efficient locations anywhere in the world. Performance AB InBev is the largest beer company in the world and the gross annual sales of the company are $54.30 billion in 2021 which is a 15.83% increase in revenue from 2020. The company relies on mergers and acquisitions heavily to eliminate its competition. The current share price is 46.46 euros. The price-earnings ratio of the company is 16.07 as of October 10, 2022. The current ratio as of June 30 2022 is 0.67. The debt-equity ratio as of June 30 2022 is 0.99. The return on equity as of June 30 2022 is 9.39% (AB InBev, 2021). Heineken Strategy Heineken uses a transnational strategy because the global integration or cost pressures are high and the local responsiveness pressures are also high. The company is selling its products across various countries globally but makes differentiation in terms of the promotion of its products while the formulation of Heineken products remains the same. The knowledge creation is done in both headquarters and subsidiaries and shared HQ to the subsidiary, subsidiary to HQ, and subsidiary to subsidiary. Structure The structure followed by Heineken is an integrated network as the key assets, responsibilities, and decisions are distributed. The subsidiary roles and responsibilities are also differentiated. Both centralization and decentralization are used for decision-making. There is a complex control and coordination mechanism and knowledge transfer among the subsidiaries. Performance Heineken is the second largest beer company in the world with annual revenue of $25.95 billion in 2021 and it showed a 15.27% increase from 2020. The current share price is 88.10 euros. The price-earnings ratio of the company is 13.08 as of October 5, 2022. The current ratio as of December 31 2021 is 0.79. The debt-equity ratio as of December 31 2022 is 0.69. The return on equity as of September 26 2022 is 13.42% (Heineken, 2021). Similarities and Differences One similarity is that both companies make full use of opportunities for mergers and acquisitions for expansion and elimination of competition. The second similarity is that both companies have very successful operations globally. The similarities in the strategy are in terms of market participation, competitive moves, and to some extent marketing approach. In terms of structure, in both companies, the headquarters and subsidiary linkages are very strong. As far as performance is concerned, both companies have been quite successful in establishing themselves as top brands in the world. The main differences in structure are in terms of control exercised, key assets, responsibilities, and decisions. There is also knowledge transfer in Heineken which is missing in AB InBev. As far as strategy is concerned, there are major differences in the location of activities and knowledge creation and sharing. Recommended Strategy A transnational strategy is recommended for most beer companies because the tastes and preferences of people from different countries are different. The brand needs to be introduced to the local people using campaigns and products they related so that the company can grab the market share and retain it as well. In this way, the USP of the company is also retained. According to me, a transnational strategy is more effective because the world can be viewed as one homogeneous market where local preferences and differences are smoothed out. Due to the local preferences of people, this strategy helps in attracting the local audience as they can connect with the company and the products. The variations between the markets in the different regions of the world need to be acknowledged for more customer retention and acquisition. Global strategy, on the other hand, views the entire world as a large market, and this strategy might work in different industries but is not as effective as transnational because in the beer industry the tastes and preferences vary and customization will prove to be effective here. References AB InBev. (2021). https://www.macrotrends.Net/. https://www.macrotrends.net/stocks/charts/BUD/anheuser-busch/roe Heineken. (2021). https://www.macrotrends.Net/. https://www.macrotrends.net/stocks/charts/HEINY/heineken/roa.

Following the IRL pressures framework, compare and contrast AB InBev's strategy, structure, and performance with that of one or more other firms operating in a similar industry (That is, beer). Comment

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