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Team 3 Mason Mitchell Randy Greinert Sarah Yelverton Alec Cooper. Industry and Competitive Situation Analysis: BEER INDUSTRY. The Beginning. 3, 000 B.C. -mainly starches and sugars Modern day Iraq 2 Flavors Malt dried over open flame Hydrometer Invention Better quality malt

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Team 3 mason mitchell randy greinert sarah yelverton alec cooper

Team 3

Mason Mitchell

Randy Greinert

Sarah Yelverton

Alec Cooper

Industry and Competitive Situation Analysis:BEER INDUSTRY


The beginning
The Beginning

  • 3, 000 B.C. -mainly starches and sugars

  • Modern day Iraq

  • 2 Flavors

  • Malt dried over open flame

  • Hydrometer Invention

  • Better quality malt

  • Colonists/Corn


Coors
Coors

  • 1880

  • Adolf Coors

  • Golden, Co

  • Prohibition

  • “Silver Bullet”-Bill Coors



Product life cycle
Product Life Cycle

  • Intro- uncertainty

  • Growth- intense competition and climb

  • Mature- stagnant

  • Decline

  • Blue Moon, Bud Light Lime- growth stage (helped super premium segment advance 27.3%)


Imports on the decline
Imports on the Decline

  • Corona Extra and Heineken biggest imports

  • Corona Extra down 4.6%

  • Heineken down 5.5%

  • Both account for over half of imports in United States

  • Our spin: Bud Light Lime has stolen customers due to growth stage


Modelo
Modelo

  • Mexican beers dominate import category (4 of top 6)

  • S&P relates this growth to rise in Mexican population, especially in CA.

  • Will continue to grow


Microbrew
MicroBrew

  • Also Called Craft Beer

  • Make limited amount of beer out of small breweries

  • MicroBrew category has grown consecutively for 25 years

  • Grew 5% in 2008

  • Limited edition seasonal beers and differentiation attribute to their success

  • Samuel Adams of Boston Beer Company is category leader


Market dominaton
Market Dominaton

  • Rule of three and four: 78% of US beer market owned by MillerCoors and Anheuser-Busch


Us sales 2008
US sales 2008

  • Anheuser-Busch- 48.6% market share

  • MillerCoors owned 29.4% of the volume


Top 20 beer brands us
Top 20 Beer Brands US

  • 1) Bud Light

  • 2) Budweiser

  • 3) Coors Light

  • 4) Miller Light

  • 5) Natural Light

  • Only recognizable beer that was non big two was Pabst Blue Ribbon at 18


Light beer
Light Beer

  • 51.8% share of beer consumption

  • Increase of 2.2% in 2008

  • Bud Light is now the leading brand in the world


S p on millercoors
S&P on MillerCoors

  • Sold 64.5 million barrels of beer in 2008

  • Up 0.4% from 2007

  • Sold 64.3 million barrels in 2007

  • Up 4.8% from 2006

  • Own and operate 8 US breweries


Consolidating global beer market
Consolidating Global Beer Market

  • US beer companies are trying to establish presence in potentially lucrative markets in Asia, Eastern Europe, and Latin America.

  • Doing this through exports, joint ventures with local brewers and distributors, and purchases of equity interests in local brewers.

  • In 2005, world’s top ten brewers accounted for 61% of international sales volume.


Molson coors global
Molson Coors global

  • Acquired Carling from Bass Brewers, which made them a player in the United Kingdom.

  • Also export products to Australia, Japan, and Caribbean Islands


Increasing target market
Increasing Target Market

  • Age range 21-24 increased in population for the first time in two decades


Advertising
Advertising

  • $975 million dollars spent in 2007

  • Molson Coors spent $151 million dollars

  • SAB-Miller spent $175 million dollars

  • Anheuser-Busch spent $378 million dollars

  • Mainly target men with commercials on television during sporting events


Competition
Competition

  • Not only from other beers, but wine and spirits

  • With spirits you can create a variety of flavors with mixers

  • Expanded spirit marketing

  • Health-Conscious people shifting to wine and spirits in moderation

  • People are more time efficient than ever


Company analysis

Overview of the Company:

2005 Molson and Coors merged to

form Molson Coors

Fifth largest brewer in the world

Molson Coors has the 2nd highest sales within the industry behind Anheuser-Busch

Company Analysis


Performance Indicators:

  • Following the merger in 2005 Net Income and operating revenues for Molson Coors increased until 2007

  • From 2007 to 2008 the company experienced a decrease in net income and operating revenues as a result of a change in economic conditions and the joint venture with Modelo which was not consolidated yet on the financial statements

    Net Income Operating Revenues


  • The companies current ratio has increased from .08 to 1.1 which shows the firm is becoming more liquid

  • The return on assets ratio has increased in recent years showing Molson Coors increase in efficiency in generating income from invested capital

  • Molson Coors earnings per share have varied over recent years due to the 2005 merger and the current recession


SWOT which shows the firm is becoming more liquid

  • Strengths:

  • Strong industry position

  • Portfolio of strong brands

  • Strong financial performance

  • Weaknesses:

  • Dependence on few products

  • Reliance on third party service providers


  • Opportunities: which shows the firm is becoming more liquid

    - Strategic Agreements

  • Growing Hispanic population in the US

  • Growing beer consumption in Asia

  • Threats:

  • Government regulations

  • Changing consumer preferences

  • Industry consolidation


Strategy
Strategy which shows the firm is becoming more liquid

  • Performance improvement strategy to build and strengthen capabilities

  • Reduce general and administrative expenses by business process outsourcing

  • Standardize business processes in finance, IT services, and HR

  • Strong brand recognition to obtain a competitive position

  • Increase in advertising and marketing expenditures


Industry change which shows the firm is becoming more liquid

Rise of wine, spirits, and craft beer

34% wine

40%beer

22% spirits

In 1995 beer was 46% now 40%

People are becoming more health

conscious

Increase in Mergers and acquisitions


Strong and weak companies
Strong and Weak Companies which shows the firm is becoming more liquid

  • Anheuser-Bush

  • Molson Coors

  • Pats Blue Ribbon

    • Decreasing market share 2007 5.9% 2008 2.7%

    • Beer ranked 18 out of 20 top beers


Competitive moves
Competitive Moves which shows the firm is becoming more liquid

  • Mergers and Acquisitions

    • Pats Blue Ribbon

    • Boston Beer Company

  • Add craft brewers to product mix

    • 312

    • ESB


Completive success
Completive success which shows the firm is becoming more liquid

  • Advertising

  • Product differentiation

  • Synergy and cost reduction


Industry attractiveness
Industry attractiveness which shows the firm is becoming more liquid

  • $99.3 billion industry

  • Industry growing during recession

  • Over 21 population is growing


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