Coors: Balanced Scorecard Essay

* She is considering the cash flow paid to all the equity or debt holders. So she cannot use the equity cost of capital.

Boston Beer Company (BBC) has enjoyed much success with their craft beers with Samuel Adams as their main focus. Being the leader of this segment, overtopping five of their competitors combined (Exhibit 1), the company now must decide how to take advantage of the light beer market. Boston Lightship, their current light beer, had been a small contributor in BBC’s product line. Currently, it is facing dwindling sales with product volumes down from 12 000 cases per month to 3000 cases per month.

The balanced scorecard does not focus solely on achieving financial objectives but also highlights the non-financial objectives .It balances the use of financial and non-financial performance measures to evaluate short-run and long-run performance in a single report . And this is problems faced by Norwalk Division managers. They complained about the continual pressure to meet short-term financial objectives in business that required extensive investments in risky projects to yield long-run returns. Furthermore, the Division-business strategy mentioned in Exhibit 1is not clearly and detailed enough for the whole company ,which is quite simple style and without a clear “quantitative data” as an objective ,it is difficult to communicate to employees and achieve the goals setup by headquarters.

“The balanced scorecard should translate a business unit’s mission and strategy into tangible objectives and measures. The measures represent a balance between external measures for shareholders and customers and internal measures of critical business processes, innovation and learning and growth. The measures are balance between outcome measures, the results of past efforts, and the measures that drive future performance. And the scorecard is balanced between objective, easily quantified outcome measures and subjective, somewhat judgmental, performance…”

Throughout most of its history, the Coors Brewing Company (Coors) has been a regionalized brewer within the United States, specializing in high-quality beer through by virtue of its source water selection, stringent production standards, and cold filtered brewing approach. As the company expanded its distribution to new markets within the U.S. in attempt to gain market share, it made a strategic decision to maintain a majority of its brewing operations at its primary production facility in Golden, Colorado. This decision was based upon the desire to preserve its core production strengths through close family control. However, as the company desires to expand its market presence beyond the

Estimates of fixed costs are reasonably straightforward and are given in the case (p.280), a total of $250,000 ($160,000+$90,000).

Molson Coors is a thriving international brewing company that has nine Signature Brew drinks and 123 Special Brew drinks that ranges from non-alcoholic to alcoholic (Molson Coors Brewing Company, 2016b). They have multiple markets around the world which contributes to the success of the company in the brewing industry. This report analyzes Molson Coors’ internal and external environments which determines their position in the brewing industry. It also discusses strategies the company uses in order to be successful in their industry. Molson Coors shares the industry with its main competitors but has its own uniqueness that makes its business stand out. Molson Coors is a successful business that presents opportunities for economic growth.

* Compute the value with leverage, VL, by discounting the free cash flows of the investment using the WACC.

The balanced scorecard is a strategic planning and management system that was developed by Dr. Robert S. Kaplan and Dr. David P. Norton in the early 1990's. Their goal was to provide organizations with a clear understanding of what to measure in order to improve performance and results (Balanced Scorecard Institute 2014). The balanced scorecard is a framework that allows an organization to measure performance and compare it to the organization’s strategic objectives and goals (Kinney and Raiborn 2013, 10).

The Adolph Coors Case Study proved the dedication and self-reliance Coors brings to the beer industry. Having overcome great adversity by surviving the prohibition years, Coors durability and sustainability are also complimentary points on the structure of the company. Coors is a family owned company that had humble beginnings in Colorado and within 100 years grew into a multimillion-dollar company. Coors’ controlled manufacturing process is a sign of their individuality in the beer industry, this was not an unknown fact, however, as they were receiving orders to ship Coors beer all across the nation as of 1972. The case study allowed an internal and external point of view, which was highly beneficial to properly analyze their upcoming problem within the company.

Volume decreased for the first time in over twenty years in 1975 by four percent, during that same time Coors started to push out further in an attempt to become a national brand. 1985 marked a major year for the company as it set records in volume sold and revenues from the brewing division. Between 1975 and 1985 there were major changes in the company that eventually led to the company possibly opening its second brewing facility in history in Virginia. Through these years there were many new strategies implemented to foster this growth. In this paper I will diagnose key decisions, analyze potential solutions and show the actions needed to achieve the suggested changes.

EVA stands for economic value added. EVA is a value based financial performance measure based

Research In Motion Limited (RIM) was founded in 1984 and is headquartered in Waterloo, Ontario, Canada but has multinational operations with offices in North America, Asia-Pacific and Europe.

Molson Coors ability to create loyal customers contributes to the company being one of the worlds largest brewery companies bringing in $5.6 billion a year in sales. The company employs 11,000 employees with 10 breweries in 3 different countries. Although the company only produces 40 brands of beer, two of them, Coors and Coors Light, were appointed top beer brands form the national customer loyalty study for three consecutive years. SABMiller, who acquired the Miller Brewing Company in 2002, produces over 200 beer brands and brews in over 60 countries. The company decided to specialize in premium brands of beer and were compensated in 2006 with a 19% increase in revenue. The company prides its self on emphasizng the fewer carbohydrates and better taste its line of beers has compared to its competitors. The company proves this with winning the Miller Light Taste Challeng, a point-of-sale taste test. Another competitor of Anheuser-Busch is Heineken NV. Heineken produces 170 beer brands and owns 115 breweries in 65 different countries with 65,648 employees. The company specializes in lagers, speciality beers, light beers, alcoholic-free beers, and soft drinks. Although competition with these companies is combative, Anheuser-Busch (ABI) continues to be the leader in brewery with higher revenues and net income. The company employs over 30,183 in 27 breweries compared to the industries average of 480

After subtracting all economic costs from operating profits after taxes EVA reveals the true economic surplus available for further investment. Traditional cash flow analysis can easily disregard companies with negative cash flows because main purpose of traditional cash value metric is to control cash generation. In contrast, the main purpose of EVA is to optimize resource allocation. At difference to accounting measures, EVA highlights the gap in performance, and hence, aligns the interests of managers and shareholders. The link between shareholders value and economic profit of the company becomes more transparent. At difference to traditional accounting measures of corporate profit, EVA fully accounts for the company¡¦s overall capital costs. It includes both, the direct cost of debt capital and the indirect cost of equity capital. The cost of capital is the minimum return required to pay shareholder¡¦s equity . EVA can therefore determine whether or not the business is creating value but it can also indicate how much value is created at different business levels.