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Adolph Coors in the Brewing Industry Take-aways. Internal Fit n A strategy should fit internally u Activities of the firm should link in a complementary.

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Presentation on theme: "Adolph Coors in the Brewing Industry Take-aways. Internal Fit n A strategy should fit internally u Activities of the firm should link in a complementary."— Presentation transcript:

1 Adolph Coors in the Brewing Industry Take-aways

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

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

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

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

6 Operating Performance Comparison, Coors vs. Anheuser Busch

7 Coors Update 1985 — Miller introduces Genuine Draft August — 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 # — Introduced Keystone (a popular beer that cannibalized Coors’ premium sales)

8 Coors Update 1990 — Coors rises to #3 among US brewers 1991 — Entered 50 th 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 Coors + 52% (end 1995) Coors + 334% (end 2003) S&P %

10 Coors Performance Post 1985 relative to Anheuser Busch


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