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Adolph Coors in the Brewing Industry

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1 Adolph Coors in the Brewing Industry

2 Internal Fit A strategy should fit internally
Activities of the firm should link in a complementary way with one another This requires a cross-functional perspective An activity map is an important tool to assess the internal fit of a company’s strategy

3 An Activity Map Procurement Manufacturing Marketing Distribution Other
Plant One Regional Scale Product Distribution One Intermediate Location Price Distribution Backward Controls Integration Cans Other inputs High Limited Capacity Advertising Utilization Other Product All- Unique Process • Attributes Equity Asset-Intensive • Rocky Mount. Finance Long Image Unpasteurized Family Control Confronta- tional Manag.

4 External Fit A strategy must also fit externally
A company’s strategy needs to make sense in the “terrain” in which they are operating Comparative financial statement analysis is a key tool for this type of assessment Identify the key drivers of change in making comparisons

5 Coors’ Strategy 1970s: Product Advantage vs Competitive Advantage
Scale and Centralization Missed opportunities Static view of rivals and opportunities 1980s: Constrained by Earlier Choices Reactive strategy Little adaptation

6 Operating Performance Comparison, Coors vs. Anheuser Busch

7 Coors Update 1985 — Miller introduces Genuine Draft August 1
1986 — Agreement with Asahi Breweries in Tokyo—to brew and distribute Coors in Japan 1987 — Shenandoah packaging facility opened 1987 — Agreement with AFL-CIO ends 10-year boycott against Coors 1988 — Record volume moves Coors from #5 in the industry to #4 1989 — Introduced Keystone (a popular beer that cannibalized Coors’ premium sales)

8 Coors Update 1990 — Coors rises to #3 among US brewers
1991 — Entered 50th state (Indiana) and began exporting to Puerto Rico, Guam and Cayman Islands 1992 — Spun off nonbrewing assets including diversified technology business 1993 — New president and COO hires from Frito-Lay; first non-Coors family member to be president 1994 — Purchased brewery in Spain 1996 — Anheuser Busch has captured 48% of US beer sales

9 Coors Performance Post 1985
(end 2003) Coors + 52% (end 1995)

10 Coors Performance Post 1985 relative to Anheuser Busch

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