Title: Adolph Coors
1Adolph Coors
2(No Transcript)
3Competitive 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
4What went wrong ?
- Operating Performance
- Slow growth
5Major Brewers Operating Income (per Barrel)
 AB Miller Heilman Coors
Barrels Sold 36.6 Millions 24.2 Millions 6.2 Millions 12.8 Millions
    Â
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
    Â
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
    Â
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
    Â
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
6Slow 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
7Factors 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
8Coors Banquet
- One brewery
- Only distributed in the West (11 states)
- Product Differentiation Strategy
- Only in draft
- Uniqueness of ingredients Rocky Mountain
Springwater
9Coors Mystique
- Burt Reynolds in the movie Smokey and the
Bandit - Gerald Ford and Henry Kissinger
- The In n Out effect
10Coors 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
11The Water Mystique
- Expanding nationally actually hurt Coors image.
- Cross-brewing
- Too much availability led to Coors commonness
-
12AFL-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.
13Unfounded 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
14Boycott Coors
15Recommendations
Diversification
Multipoint competition
Synergy
- More value
- Risk reduction
- Create a new market
- Miller Coors vs. Anheuser Busch
- Create a stronger brand
16Focus Strategy
Focus more on consumer needs
Wholesalers
Buyers
- Change production method
- Freshness Policy
- More accessible
- On-premise
- Off-premise
17Focus 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
18Coors 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
19Coors 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.
20Thank you!