Anheuser Busch and Coors Brewing Company

6250 Words25 Pages
Strategic Analysis of

Anheuser-Busch Companies and Coors Brewing Company

Tuesday, October 18, 2011

Contents
Introduction 3
Industry Analysis 3 Barriers to Entry: 3 Competitive Rivalry: 4 Power of Suppliers: 5 Power of Buyers: 5 Substitutes: 6 Summary of Five Forces: 6
Strategy Analysis 7 Anheuser-Busch 7 Operational Excellence 7 Customer Intimacy: 9 Evaluation of Anheuser-Busch’s Strategy: 10 Coors Brewing Company: 11 Operational Excellence: Through Strategic Alliances 11 Brand Management: Differentiation and Expansion 14 Evaluation of Coors’ Strategy 16
Event Response Analysis 17 Demand Contraction: Anheuser-Busch and Coors Brewing Company 17 Rise in Demand: Anheuser-Busch
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Power of Buyers

In the United States, most states require three separate components in the supply chain: producers, distributors, and retailers. This three-tiered system insulates distributors, as beer producers are not permitted to sell beer directly to retailers or consumers.[5] The regulations in place augment the power of buyers. Furthermore, distributors’ purchase volume as a percent of the focal industry’s output is high. Conversely, the relative power of distributors is dependent on how reliant their revenues are on beer sales. Overall, due to the relatively larger number of distributors compared to beer manufacturers, the dominant position of the three largest brewers, as well as the brand loyalty created by the manufacturers through brand differentiation, the power of buyers is moderate.

Substitutes

The threat of substitutes is high for the beer industry, and specifically for this strategic group. According to the trade group Beverage Industry, alcohol beverage consumption per capita has risen since 2000 at around one percent per year, which suggests that consumers on average are not substituting non-alcoholic beverages for the alcohol they currently consume[6]. Since 1994, consumption per capita has increased for the three major substitutes – premium beers, wine, and spirits.[7] Although beer holds a majority

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