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Adolph Coors. Team Pirates Spring 2008. Five Forces of Competition. Competitive Advantage in 1970s. Suppliers and buyers have weak positions - Good wholesalers and retailers relations - Vertical integration . High entry barriers - Economies of scale

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adolph coors

Adolph Coors

Team Pirates

Spring 2008

competitive advantage in 1970s

Five Forces of

Competition

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
what went wrong
What went wrong ?
  • Operating Performance
  • Slow growth
slide5

Major Brewers’ Operating Income (per Barrel)

For 1977

For 1985 in $’s of 1977

  • Low Revenue
  • Operating Cost too high
    • Production Cost
    • Transportation Cost
    • Advertizing Cost
slow growth compare to competitor
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
factors to coors stagnation
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
coors banquet
Coors Banquet
  • One brewery
  • Only distributed in the West (11 states)
  • Product Differentiation Strategy
    • Only in draft
    • Uniqueness of ingredients “Rocky Mountain Springwater”
coors mystique
Coors’ Mystique
  • Burt Reynolds in the movie “Smokey and the Bandit”
  • Gerald Ford and Henry Kissinger
  • The In n’ Out effect
coors expansion
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
the water mystique
The Water Mystique

The original Coors’ can

  • Expanding nationally actually hurt Coors’ image.
  • Cross-brewing
  • Too much availability led to Coors’ commonness
afl cio boycott
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.
unfounded accusations
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
recommendations
Recommendations

Diversification

Multipoint competition

Synergy

  • Create a new market
  • Miller & Coors vs. Anheuser Busch
  • Create a stronger brand
  • More value
  • Risk reduction
focus strategy
Focus Strategy

Focus more on consumer needs

Wholesalers

Buyers

  • Change production method
  • “Freshness Policy”
  • More accessible
  • On-premise
  • Off-premise
focus strategy1
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
coors current strategy
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
coors current strategy1
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.