In January 1994, Danie Niemandt, general manager for South African Breweries operations in Tanzania, must determine how his company should respond to the entry of a new competitor in its market--East African Breweries. South African Breweries has executed a successful turnaround of the brewery operations in Tanzania. East African Breweries is backed by Guinness plc, one of the world's largest beer brewers, and Guinness has committed itself to investing the resources necessary to build a leading presence in the Tanzanian market. The challenge facing South African Breweries in Tanzania illustrates the challenge the company faces in many of its international markets. The company has built its international strategy around its operational expertise, but must now adjust to the entrance of well-funded global beer competitors in several of its international markets. Intended for use in a course on international business and strategy.