Corona Beer Case Study Essay

In the current environment, the biggest challenge for Grupo Modelo is to sustain its growth and maximize the return to shareholders by following business expansion strategy in order to retain market leadership position in both domestic (Mexican) and International market especially in United States. Hence, the company could consider various options to overcome this challenge: Expand

Even though their shipping costs were twice the industry’s, average shipping costs would have been much more had they attempted to enter other states. Besides, Coors made up for the inefficiency with the scale of their plant, the largest in the nation. The location lent itself well to Coors’ ability to differentiate its product. For example Coors was brewed using “pure Rocky Mountain spring water.” Coors had a great opportunity to serve an underserved geographical market. Seven of 24 million barrels sold in the region had to be imported from production facilities outside of the region, and Coors’ Colorado facility was more central to the area than the three other closest facilities in Missouri, Texas, and Wisconsin. Coors had the second lowest production cost per barrel in the industry, in spite of their claim of the most expensive raw material costs. Their cost advantage stemmed from the industry’s highest capacity utilization, economies of scale through the country’s largest brewery, single product focus, and the industry’s fastest packaging lines. Matching their low production cost was the lowest advertising cost relative to the industry. The mystique that had been built up about Coors and their differentiating, all-natural appeal allowed them to get away with lower advertising costs than average for the industry. Coors differentiated their product, both in the

Started in the year 1925 by Guntar Prangel Mountain Man Brewing Company (MMBC) was a well-entrenched company in the East Central US by 1960. Consecutively the company grew as a legacy brewery, gathering a very strong brand loyalty and positioning. Known for the authenticity, quality and taste the company grew out to be a market leader in the currently matured business. However, off late the company has been witnessing a drop in sales for their core beer product the “Mountain Man Leger” in contrary to the growing beer sales in the US.

| Weaknesses * Many consumers consider the taste to “watered down”. * Challenge of expanding internationally due to the stigma of an American beer.

In 1925, the Mountain Man Brewing Company created a new taste of beer. The company specializes in producing Mountain Man Lager that is a family owned recipe that has a unique bitter award-winning taste. Mountain Man Brewing Company holds a strong brand name in the premium beer segment of the beer industry. MMBC Lager Beer has won several awards and has high brand recognition in the region that it operates. Since 1960, MMBC has distributed lager beer primarily in the Midwest distributing products in Illinois, Indiana, Michigan, Ohio, and West Virginia. MMBC Lager is a strong hoppy beer that is preferred by customers in the working class that are between 55 and 60 years. Over 70% of MMBC sales are generated out of liquor stores. Mountain Man Brewing Company Lager is MMBC only product. In 2005, MMBC Lager sold 520,000 barrels and generated $50 million in revenue. By identifying the facts of the Mountain Man Brewing Company’s case and the problems and why they exists it will be possible to determine solutions for MMBC 's situation to define the direction the company will need to take to ensure future success.

It had increased its market share to about 50% in each of its regional markets and remained highly profitable. Deltex was also one of the few Pepsi bottlers in Mexico whose share had risen since the 1960s.

b) Large national brands that maintained economies of scale in brewing, transportation and marketing put tremendous pressure on the smaller, regional brewers like Mountain Man.

You are the investment banker assigned with the task of setting the IPO price for Boston Beer Company (BBC). Prepare a research report to support your recommendation. As you prepare this report, you may find that you would like to have more field information than what the case offers you. However, the case contains critical information that gives you a reasonable basis to compute its valuation. In addition use the following information for 1995.1 Sales ($ millions) Redhook Pete’s BBC 25.89 59.17 151.31 EPS .75 .25 .40 Book value/share 7.70 4.33 3.00 Price 27.00 24.75 ?

Based on data found, there is a high amount of competition in the Mexican spirit market. In Mexico, Costco sells American-made whisky including: Jack Daniels and Johnnie Walker (Costco Mexico, n.d.). Walmart sells American-made bourbon including: Bulleit and Jim Beam (Walmart, n.d.). Furthermore, tequila is the leading alcoholic beverage consumed with Casa Pedro Domecq Mexico SA de CV leading the market in 2014 with 13% of total market sales. The distribution channel used is producer to retailer to consumer (Spirits in Mexico, n.d.). Without local connections and proper marketing, SOA will have a hard time building a customer following.

Anheuser-Busch is a company that concerns itself with the manufacture, marketing as well as distribution of alcoholic beverages. Anheuser-Busch according to the company website, "is a wholly-owned subsidiary of Anheuser-Busch InBev" (Anheuser-Busch 2011). I chose Anheuser-Busch for this discussion based on its relative size and market share. Currently, the entity is considered one of United State's largest brewing companies. Hence it is likely that given its relative size and the huge chunk of the market it controls, Anheuser-Busch would have to contend with quite a number of economic issues. Indeed, the continued success of Anheuser-Busch in the highly competitive alcoholic beverages marketplace largely depends on how it handles these issues.

“Foreign trade, then, . . . [is] highly beneficial to a country, as it increases the amount and variety

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.

iii. Import beer companies: These companies include Beck’s(Germany), Heineken (Holland) and Corona (Mexico). They control about 12% of the region’s market. However, these companies are seen to operate at disadvantage due to higher shipping costs, weaker distribution networks and an inability to control product freshness

In May of 2016, The European Commission signed off on Anheuser- Busch InBev’s more than $100 billion merger with SABMiller after the companies agreed to sell SABMiller’s premium brands in Europe and some other European operations (Bray). The merging of SABMiller and AB Inbev create the worlds largest beer company accounting for approximately 30% of beer industry sales (Bray). Margrethe Vestager, the commissioner in charge of European competition policy defended the decision to allow the merger to go through by stating “Today’s decision will ensure that competition is not weakened in these markets and that E.U. consumers are not worse off….Europeans buy around 125 billion euros of beer every year, so even a relatively small price increase could cause considerable harm to consumers” (Bray).

Grupo Damm’s current situation is the third largest beer company in Spain. It is a large player in a market dominated by two other beer