Essay About Success Of The Company And Value Of The Company

Value Based Management
Corporate performance ManagementValue Based ManagementAB InbevSubmitted by Kartik LilaniIPM2012056VALUE BASED MANAGEMENTValue based management is a comprehensive system that engages, motivate and reward the people throughout the organisation who create shareholder value (in some cases it can be stakeholder value). Shareholder value is ultimate goal of every organisation which measures the success of the company. A VBM system encompasses, coordinates and focuses the efforts of the entire workforce that creates value for the shareholders and for themselves. It defines the system upon which the whole organisation can be built, managed and valued. The management involves determining the long term and short term perspectives of the business and striking a balance between them for future functioning. The value of the company is often determined by the financial tool like discounted cash flow analysis, equity spread and economic value added. These tools are used to assess the value creation of the new strategies adopted by the businesses. Thus, the value is created when the returns of these strategic investments exceed the cost of that capital invested.Value Based Management aims to provide consistency for:Corporate MissionCorporate StrategyCorporate GovernanceCorporate CultureCorporate CommunicationOrganisation of the CompanyDecision ProcessReward ProcessesABOUT THE COMPANYAnheuser-Busch InBev SA/NV (abbreviated as AB InBev) is a Belgian-Brazilian multinational beverage and brewing company headquartered in Leuven, Belgium. It is the worlds largest brewer and has a 25 percent global market share.AB InBev was formed through successive mergers of three international brewing groups: Interbrew from Belgium, AmBev from Brazil, and Anheuser-Busch from the United States. It has 16 brands that individually generate more than US$ 1 billion annually in revenue, out of a portfolio of more than 200 brands.This portfolio includes brands Budweiser, Corona and Stella Artois, Becks, Hoegaarden and Leffe and local brands such as Bud Light, Skol, Brahma, Antarctica, Quilmes, Victoria, Modelo Especial, Michelob Ultra, Harbin, Sedrin, Klinskoye, Sibirskaya Korona, Chernigivske and Jupiler.Total revenue for all 200 AB InBev brands in 2015 was over 43.6 billion USD. The company employs over 155,000 people in 25 countries and has a global presence in the beer market.The present aim of the company is briefly mentioned below:Increased Sales and Higher Market ShareGrow Asian Markets15% Cost ReductionBetter Distribution ChannelsVBM ANALYSISBusiness ProcessChange in BehaviourImpactSales & DistributionShifted from Contract based distribution channels to Self Owned and Leased distribution ChannelsIncreased distribution centres in Growing markets Sales and Distribution channels formedLower cost for Higher RevenueProductionIncrease in the batch size production by introduction of new techniquesSmaller Cycle Time processes initiatedIncreased training for EmployeesLower cost of Production Human Resource DevelopmentBranding & MarketingProducts marketing expenses increased in Asian marketsTie-ups with Vendors for Increased PromotionsPromotion Events around the WorldIncreased EBITDA margin by 38.6%Increased presence in Asian MarketsDecision ProcessIncorporated sustainable development managementChanged the company policy from sales oriented decision making to EVA oriented decision making Increased Sales and Shareholder valueIncrease in stock price and dividendsInventory ManagementLow Inventory distribution system is adoptedLow Inventory cost Low distribution costs and increase in PATReward ProcessPerformance Based management process in placeRewards based on performance measuresYearly Benefits for EmployeesBetter working conditionsHigher employee retention ratesAnalysisAB Inbev is a very dynamic, market oriented beer corporation with one of the highest market shares in the world. The company is still growing and has a very large market opportunity in Asia. The company adopted the Value Based Management Process after the merger of Anheuser Busch and Inbev. The company is efficient in using VBM Processes for its various markets and enables a better analysis and valuation of its processes. The company has a very strict use of the system and enables the company to develop further. The process though needs a little development with its techniques to ensure higher returns on their processes and need to sync the Corporate Mission, Strategy, Governance, Culture, Communication, Organisation and its Decision and Reward process to enable a better production unit and more aggressive goals.