1. ALCOHOLES DE CENTROAMERICA S.A.
Analysis for Applied Business Strategy
June 24, 2001
Bernadette Lonzanida Mina Vaughn
Diego Piedra Keith Yackeyonny
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2. ALCOHOLES DE CENTROAMERICA S.A.
ALDECA
Alcoholes de Centro America S.A.
Grupo Coban
LICORERA DE BOACO
1/16/2019
ALCOHOLES DE CENTROAMERICA S.A.

3. ALCOHOLES DE CENTROAMERICA S.A.
Liquor Industry
Product: Aguardiente
Companies:
Honduras-8, Nicaragua-1,Guatemala-1
Sales/Profits:Declining-due to market shift
Operations: Continent-wide: CentralAmerica
Stage of product life: Mature
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ALCOHOLES DE CENTROAMERICA S.A.

4. ALCOHOLES DE CENTROAMERICA S.A.
Five Forces Model
Intensity of Rivalry: High
Suppliers: High
Buyers: High
New entrants: Low to Moderate
Substitutes: Low
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ALCOHOLES DE CENTROAMERICA S.A.

5. Five Forces Attractiveness
The AGUARDIANTE market in Centro America is attractive:
Well established firms
Firms with supply of raw materials
Firms with continent-wide reach
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ALCOHOLES DE CENTROAMERICA S.A.

6. ALCOHOLES DE CENTROAMERICA S.A.
Opportunities
High population growth
Improve market with smaller bottles
Unrelated diversification
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ALCOHOLES DE CENTROAMERICA S.A.

7. ALCOHOLES DE CENTROAMERICA S.A.
Threats
Grupo Coban’s expansion to Honduras
Shortage of supply of molasses
Political instability
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ALCOHOLES DE CENTROAMERICA S.A.

8. ALCOHOLES DE CENTROAMERICA S.A.
Organization
Honduras biggest Aguardiente company
Founded in 1967 by Emin Barjum
Products: Aguardiente, vodka and wine, cosmetics
Employs 90 people
Mission: To produce quality and affordable liquor
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ALCOHOLES DE CENTROAMERICA S.A.

9. ALCOHOLES DE CENTROAMERICA S.A.
Company Strategies
Past: Multi-brand
Corporate: Diversified to cosmetics
Generic
Low-cost leadership
Focus strategy
Alternative
Prospect: Merger
Defend: Maintain, increase market share
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ALCOHOLES DE CENTROAMERICA S.A.

10. Sales – Profits (in millions of Dollars)
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ALCOHOLES DE CENTROAMERICA S.A.

11. ALCOHOLES DE CENTROAMERICA S.A.
Finances 1990 to 1994 (RATIOS)
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ALCOHOLES DE CENTROAMERICA S.A.

12. ALCOHOLES DE CENTROAMERICA S.A.
Finances – 1990 to 1994 (RATIOS)
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ALCOHOLES DE CENTROAMERICA S.A.

13. ALCOHOLES DE CENTROAMERICA S.A.
Company Strengths
Superior process technology
Adequate labor supply
Diversified – cosmetics line
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ALCOHOLES DE CENTROAMERICA S.A.

14. ALCOHOLES DE CENTROAMERICA S.A.
Company Weaknesses
Limited distribution channels
Marketing difficulties
Inadequate molasses supply
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ALCOHOLES DE CENTROAMERICA S.A.

15. ALCOHOLES DE CENTROAMERICA S.A.
Recommendation No.1
Prospect - Vertical integration of manufacturing plastic containers instead of using glass bottles
Justification: Lower cost, speed up manufacturing process, available in different sizes
Implementation: Purchase of new machinery, train labor force
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ALCOHOLES DE CENTROAMERICA S.A.

16. ALCOHOLES DE CENTROAMERICA S.A.
Recommendation No.2
Defend – Better market initiatives
Justification: Population growth, continent- wide expansion
Implementation: Target younger people, aggressive and effective advertising
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ALCOHOLES DE CENTROAMERICA S.A.

17. ALCOHOLES DE CENTROAMERICA S.A.
Recommendation No.3
Prospect – Defend: Merger with Licorera de Boaco
Justification: Control over raw materials, increase in production and market, cost reduction, ward off competitors, chance of diversification
Implementation: draft merger and consolidation agreements, sign contract
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ALCOHOLES DE CENTROAMERICA S.A.

18. ALCOHOLES DE CENTROAMERICA S.A.
Summary
ALDECA needs to join forces with Licorera de Boaco to:
Guarantee market survival
To compete with Grupo Coban
To improve process technology
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ALCOHOLES DE CENTROAMERICA S.A.

19. ALCOHOLES DE CENTROAMERICA S.A.
ALDECA
Alcoholes de Centro America S.A.
Grupo Coban
LICORERA DE BOACO
1/16/2019
ALCOHOLES DE CENTROAMERICA S.A.