Corona Beer Case Study Essay

3581 Words15 Pages
EXECUTIVE SUMMARY
Introduction: Corona Beer, produced in Mexico by Grupo Modelo since 1922, entered the United States beer market in 1979, and by 2007, was the number one imported beer in the United States (with 1.9% market share of the global beer industry) having recently taken that position from Heineken, a rival (with 1.6% market share of the global beer industry). Corona used a broad differentiation strategy with a “fun in the sun” marketing image. It also achieved strategic success by using a distinctive glass bottle and providing a light-tasting beer that attracted a broader market.
Problem identification: The global beer industry was experiencing increasing competition due to the new and potential mergers and acquisitions of
…show more content…
Its unique glass bottle for distinctiveness, multiple brand selections, international operations, and unobtrusive taste were also parts of its strategy.
PROBLEM STATEMENT
A long-term strategic management issue for GM is the increasing global competition due to the mergers and acquisitions of its competitors. The partnership of Heineken and FEMSA (Mexico’s second largest beer company in terms of market share) was formed for the sole purpose to dethrone Corona as the best-selling import beer in the United States. To make matters worse, there were also rumours of large mergers and acquisitions of mid-tier brewers in order to better compete and expand globally. In addition, with the introduction of NAFTA, Canadian and U.S. competitors were slowly beginning to penetrate the Mexican market, which had the potential to chip away at the majority market share GM enjoyed.
In the short-term, GM was slowly losing local market share to FEMSA, who continued to experience steady growth, handled its own distribution channels, had immunity to the unstable peso, and had the top six best-rated beers brewed in Mexico according to RateBeer.com.
GM needed to find a way to protect its long sustained success in the domestic market, and build as a global player, which had everything to do with its strategy in developing foreign markets. Given the volatility of the Mexican economy, GM needed to seek international markets
Get Access