Company Data Analysis and decision
The Business Model Canvas
| Key Partners · Nigeria Breweries relies significantly on financial institutions such as banks to help in managing their financial assets and operations. More specifically, the partnerships with the banks are meant to help them in obtaining their products from both local sources and international imports. · The company also has numerous other third partners who help in implementing servicing operations for the company. Such parties include distributors, sales agents, and other stakeholders, ranging from the government to other private and public institutions. · Farmers also play a vital role in the company’s partnership since they provide the brewery with the required raw material for manufacturing the underlying commodity. | Key Activities
| Value Proposition · Nigerian Breweries’ main value proposition is seen through the export businesses that it is involved in as well as its partnership with global companies such as Heineken. · The company has also established itself as a major soft-drink manufacturer and retailer throughout the country and therefore relies on its dominance to market itself. | Customer Relationships · By virtue of the fact that it is involved in the manufacture, marketing, and selling of alcoholic products, the company has been keen on ensuring that only individuals who meet the minimum age criteria are allowed to use their products. · The company’s website has also been designed to filter users whose age is above the legal drinking age in Nigeria. | Customer Segments · DELETE GRAY TEXT & WRITE HERE | |
| Key Resources · Ancillary businesses are a major resource for the company. The company has invested heavily in the manufacture of products such as cans, bottles, cartons, and other packs. · The human resource at the organization is another significant primary resource. Human labor helps the company in implementing its normal operations. · Distribution centers, as well as malting plants, are also significant resources for the company. These resources provide the company with a means of manufacturing, storing, and selling their products to the vast Nigerian market base. | Channels · The company has a well-established distribution system that makes it possible for the products to be distributed appropriately throughout the country. · This is made possible through the two distribution centers operational in the country. | ||||
| Cost Structure · As of December 2019, the company had an operating income of 2178 USD. Also, the company’s total gross profit at this interval was found to be 360,190 USD. This value corresponded to the total revenue of 886,426USD filed under the same period. · Throughout the 2019 fiscal year, their cost structures varied significantly for the company. Nevertheless, a general incremental trend could be observed towards the last quarter of the fiscal year 2019, whose results were filed in February 2020. | Revenue Streams · The company obtains its revenue from multiple sources. The primary source of revenue, however, is sales of alcohol. In 2018, over a million liters of alcohol were produced by the company indicating that alcohol is the major source of revenue for the company. · The contribution of other sources such as the ancillary activities, as well as the sale of other non-alcoholic drinks, also play a crucial role in the company’s revenue. | ||||
Recommendations to the CEO
To improve the sales of the company, the CEO of Nigerian Breweries can start by implementing some of the significant concepts of the Blue Ocean Strategy. Blue Ocean Strategy refers to a set of techniques applied in marketing where business investments focus on venturing into aspects that have not been explored in their respective industries. This implies that when setting up a marketing strategy, such investments focus on product and service diversification to avoid the existing competition (Kim & Mauborgne, 2005). Its opposite is the Red Ocean strategy. In 2015, Nigerian Breweries experienced a significant drop in company revenue that was mostly attributed to the decline in preference to the company’s products. This is despite the broad customer base associated with the high Nigerian population. Therefore, to increase the company’s performance, the management may embrace diversification to offer new services and products to their clients. By venturing into new avenues in the general industry, the company will be able to not only overcome the local competition but also ensure that it sustains a quality client base that will be able to maintain the organization’s product and service production.
Another primary recommendation that can be made to the company’s executive management is to put more emphasis on mergers and acquisitions in the local market. From the business canvas above, it can be seen that the company is involved in various activities that supply it with a continuous stream of revenue. However, such activities rely heavily on other third-party players in the industry. For instance, when focusing on the export businesses that the company is involved in, it is evident that other outside companies such as financial institutions play a crucial role in determining the success of the operations (Editorial, 2019). Also, the ancillary activities are undertaken by the organization also call for external partners based on the fact that the company will need to adequately market its products in a manner that will enable it to overcome the existing competition in the market. Mergers will allow the company to assimilate smaller companies offering similar services within the country, subsequently resulting in increased popularity of the company. Similarly, the alliances may also help in reducing the costs of operations of the company since new sources of revenue will be introduced to supplement the company’s original revenue source.
Finally, the company should also consider putting more emphasis on the manufacture, marketing, and selling of other products apart from alcoholic drinks. As of 2018, the company still retained its top position as the leading alcohol retailer in Nigeria (“Empirical Study on the Effect of Corporate Eco-Efficiency on the Profitability of Nigerian Breweries Plc,” 2019). Nevertheless, the company also experienced a significant decline in the overall profitability of its activities during the same year. A projection of the company’s performance, therefore, shows the likelihood of the company being overthrown as the leading breweries company should continue relying on alcohol sales as a significant driver of the revenue. Organizations such as Guinness Nigeria have shown remarkable efforts in attempting to match the performance of Nigerian Breweries. They should, therefore, be considered to be critical competitors and a threat to the dominance of Nigerian Breweries limited.
Schematic showing the declining profitability of Nigerian Breweries on the left and the major competitors of the company on the right.. Don't use plagiarised sources.Get your custom essay just from $11/page
An extract from PitchBook showing the company’s operating expenses for the fiscal year ended December 2019.
References
Editorial, R. (2019). Nigerian Breweries Plc. Retrieved from https://www.reuters.com/companies/NB.LG
Empirical Study on the Effect of Corporate Eco-Efficiency on the Profitability of Nigerian Breweries Plc. (2019). European Journal of Business and Management. doi:10.7176/ejbm/11-20-01
Home. (2020). Retrieved from https://nbplc.com/ourcompany.html
Kim, W. C., & Mauborgne, R. (2005). Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant. Brighton,