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Adolph Coors

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... ice beer, dry beer, red beer, Production Expansion Opening of a new packaging plant in Virginia The Water Mystique Expanding nationally actually hurt Coors ... – PowerPoint PPT presentation

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Title: Adolph Coors


1
Adolph Coors
  • Team Pirates
  • Spring 2008

2
(No Transcript)
3
Competitive Advantage in 1970s
Suppliers and buyers have weak positions - Good
wholesalers and retailers relations -
Vertical integration
High entry barriers - Economies of scale -
Differentiation and Customer relations
Few threats from substitute products - Few
categories - Differentiation
  • Moderate rivalry
  • Competitors
  • - High growing industry

4
What went wrong ?
  • Operating Performance
  • Slow growth

5
Major Brewers Operating Income (per Barrel)
  AB Miller Heilman Coors
Barrels Sold 36.6 Millions 24.2 Millions 6.2 Millions 12.8 Millions
         
Revenue 46.01 45.87 34.84 41.56
COGS 36.61 N/A 24.52 28.98
Advertising 1.99 2.48 2.10 1.09
Other SGA 2.79 N/A 4.35 2.97
Total Operating Cost 41.39 N/A 30.97 33.04
         
Operating Income 4.62 4.38 4.03 8.52
For 1977
  AB Miller Heilman Coors
Barrel Sold 68 Millions 37.1 Millions 16.2 Millions 14.7 Millions
         
Revenue 43.32 39.11 29.73 41.10
COGS 29.02 N/A 21.33 27.70
Advertising 3.88 4.53 3.56 6.28
Other SGA 4.04 N/A 2.56 3.58
Total Operating Cost 36.95 N/A 27.45 37.56
         
Operating Income 6.37 2.06 2.28 3.55
For 1985 in s of 1977
  • Low Revenue
  • Operating Cost too high
  • Production Cost
  • Transportation Cost
  • Advertizing Cost

6
Slow growth compare to Competitor
  • Method of production
  • Only one facility
  • Not able to produce in advance
  • Exposition on U.S Territory
  • Diversity of products available

7
Factors to Coors Stagnation
  • Unfocused strategy
  • From one brand to the fall
  • The cult of Coors
  • The Water Mystique
  • Coors image problem
  • AFL-CIO Strike and boycott
  • Coors and the minorities
  • Coors family views

8
Coors Banquet
  • One brewery
  • Only distributed in the West (11 states)
  • Product Differentiation Strategy
  • Only in draft
  • Uniqueness of ingredients Rocky Mountain
    Springwater

9
Coors Mystique
  • Burt Reynolds in the movie Smokey and the
    Bandit
  • Gerald Ford and Henry Kissinger
  • The In n Out effect

10
Coors Expansion
  • Geographic Expansion
  • Roll out in the fifty states
  • Product Expansion
  • Killian, Greystone, and Shulers
  • Line Expansion
  • Light beer, ice beer, dry beer, red beer,
  • Production Expansion
  • Opening of a new packaging plant in Virginia

11
The Water Mystique
  • The original Coors can
  • Expanding nationally actually hurt Coors image.
  • Cross-brewing
  • Too much availability led to Coors commonness

12
AFL-CIO Boycott
  • Lasted from 1977 to 1987
  • Market share dropped in California from 40 to
    10.
  • AFL-CIO represents 13 million workers
  • Union representative reached out to minorities
    organizations, universities, stadiums, and
    entertainment parks.
  • Wanted to show that Adolph Coors is antilabor,
    and therefore antipeople
  • N.E.A and N.O.W joined the boycott with more than
    5 million people.

13
Unfounded accusations
  • Anti gay, anti minorities, anti woman employment
    practices
  • Not eco-friendly
  • Comments taken out of context viewed as racists
  • Coors family contribution to conservative
    political group

14
Boycott Coors
15
Recommendations
Diversification
Multipoint competition
Synergy
  • More value
  • Risk reduction
  • Create a new market
  • Miller Coors vs. Anheuser Busch
  • Create a stronger brand

16
Focus Strategy
Focus more on consumer needs
Wholesalers
Buyers
  • Change production method
  • Freshness Policy
  • More accessible
  • On-premise
  • Off-premise

17
Focus Strategy
  • Create new advertising campaigns
  • Focus on other segments of beer
  • Regionalize in terms of marketing and sales
    activities
  • Create a low cost strategy
  • Create more facilities

18
Coors Current strategy
  • Engaged in a 3-part strategy in 2004
  • (1) "Drive growth on Coors Light and Coors
    Original via a full line of support, including
    over 20 television spots, promotions, radio, out
    of home and print.
  • (2) "Support Keystone Light, Killian's, Zima,
    Blue Moon and Mexicali with local programming.
  • (3) "Respond aggressively to low-carb
    opportunities."
  • Merged with Molson in 2005
  • Merged with SABMiller in 2007

19
Coors Current strategy
  • Direct competitor to Anheuser-Busch after the
    merger with SABMiller.
  • Expansion in developing market, such as Asia and
    Africa
  • Goes up against the heavy marketing strategy of
    Anheuser-Busch, which spends twice the
    advertising expense of Coors, 2.5 billion and
    50.6 of the market share.

20
Thank you!
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