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Molson Coors Brewing Company Strategic Analysis 2009. Jarryd Phillips, Jermaine West, Spencer Jacoby, Othniel Hyliger , Steven Pelletier. Overview. Strategic Assessment SWOT Matrix Space Matrix Grand Strategy Matrix BCG Matrix IE Matrix Matrix Analysis QSPM

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slide1

Molson Coors Brewing Company

Strategic Analysis 2009

Jarryd Phillips, Jermaine West, Spencer Jacoby, OthnielHyliger, Steven Pelletier

overview
Overview

Strategic Assessment

SWOT Matrix

Space Matrix

Grand Strategy Matrix

BCG Matrix

IE Matrix

Matrix Analysis

QSPM

Recommendations

Craft Beer Analysis

Objectives

Strategic Implementation

Projected Income Statement

Projected Balance Sheet

Projected Financial Ratios

Evaluation

Balanced Scorecard

Sources

Questions

History

How Molson Coors came to be

Current Vision & Mission Statements

Proposed Vision & Mission Statements

External Assessment

Positioning Map

CPM Matrix

Opportunities & Threats

EFE Matrix

International Presence

Internal Assessment

Organizational Chart

2009 Income Statement

2009 Balance Sheet

Current Financial Ratios

Financial Trends

Strength & Weaknesses

IFE Matrix

history
History

1786- John Molson opens a brewery in Montreal, Canada.

Adolph Coors opens the Golden Brewery in Golden, Colorado.

1916- Prohibition is enacted in the US. Coors keeps the brewery open by making malted milk, near beer and porcelain products.

1959- Coors introduces aluminum cans and cold filter brewing.

how molson coors came to be
How Molson Coors Came to be

William Worthington- 1744

Bass Brewers- 1926

William Bass-1777

Coors Brewers Ltd-2002

Adolf Coors-1873

Molson Coors-2005

Thomas Carling- 1840

Molson Brewers Canada-1989

John Molson-1786

current vision statement
Current Vision Statement

Our ambition is to be a top global brewer. We have four strategic goals to help us get there: a net profit goal, increasing returns from our strategic brands, engagement of our employees, and recognition for world-class corporate responsibility.

current mission statement
Current Mission Statement

At Molson Coors, corporate responsibility is core to our overall business strategy. We cannot meet our profit target without managing sustainability risks and opportunities. We grow our brands responsibly, and responsibility performance is key to engaging our employees. We come from many different backgrounds, so our values help to unite us. They guide our decisions and our actions through excelling, passion, integrity and respect, creativity, and quality.

proposed vision statement
Proposed Vision Statement

At Molson Coors, our goal is to provide consumers with products they most prefer; and at the same time be the leading producer of malt liquor products in the world.

proposed mission statement
Proposed Mission Statement

At Molson Coors, we desire to produce the best products and services for consumers in the world market (1, 2, and 3). In the process, our employees and managers will utilize the newest technology and innovation to ensure profits for shareholders and growth for the company (4, 5). Our breweries and production processes will operate with a concern for employee livelihood sustainability, environmental protection, and community commitment (8, 9). We will continue to provide our value chain with the best value possible (7). Our philosophy towards innovation and product sustainability displays a commitment to our company and will ensure progress in the industry for the short and long term (6).

1. Customers

2. Products or services

3. Markets

4. Technology.

5. Concern for survival, growth, and profitability

6. Philosophy

7. Self-concept

8. Concern for public image

9. Concern for employees

positioning map
Positioning Map

Global Sales (High)

Volume Produced(low)

Volume Produced(High)

Global Sales (Low)

opportunities
Opportunities
  • Producing liquor or soda can also diversify risk, as sales of beer fluctuate.
  • The Asian beer market provides ample business expansion possibilities, because they are a large consumer of the product and their populations are growing.
  • Creating more strategic alliances with other companies reduces risk as they move into foreign operations
  • Provide more environmentally friendly packaging, improve pollution prevention goals.
  • Continue expanding joint ventures internationally.
  • They can produce a line of Organic Beer, Gluten free beer, or move into the higher priced market of beers.
threats
Threats
  • Top competitors include: Anheuser-Busch & Heineken.
  • Any significant increase in raw materials prices will negatively affect their margins.
  • Any significant decrease in the ability to obtain their raw materials will also affect their margins.
  • Perceptions that beer is not as healthy as other alcoholic beverages like wine.
  • Economic recession in the US increases the sales of beer at first, but as the recession continues over a longer period of time, it may cause sales to decrease.
strengths
Strengths
  • Molson-Coors benefits from their large market share in the beer industry in North America.
  • Molson Coors is an innovative company, first by surviving prohibition in the US, when their product was deemed illegal; they began to bottle water to keep the company going. When prohibition was repealed, they returned to bottling alcoholic products and developed the first aluminum can.
  • Strong Financial position.
  • Alliances with NFL and NASCAR.
  • Successful joint ventures.
  • Reasonable prices- can sell to a larger majority, although not considered cheap for everyone.
  • Growth in Foreign markets.
  • Molson Coors has a strong brand portfolio representing nearly all types of beers which should help them diversify risk against changes in consumer preferences.
weaknesses
Weaknesses
  • Lower market share in the U.K
  • They rely on only a few popular brand names, which expose the company to vulnerability when sales and economic regions fluctuate.
  • Labor practices in Europe.
  • They have dependencies on raw materials such as aluminum, barley, hops and wheat, and the price for these have increased greatly since 2008.
  • Perceptions in the states are that it is a middle class beer, which makes it harder to sell to the people with disposable income
  • They rely considerably on a small number of suppliers to obtain their packaging.
  • Molson-Coors relies on 70% of its U.S. sales from Coors Light.
swot matrix
SWOT Matrix
    • Strengths
  • Molson-Coors benefits from their large market share in the beer industry in North America.
  • Molson Coors is an innovative company, first by surviving prohibition in the US, when their product was deemed illegal; they began to bottle water to keep the company going.
  • Strong Financial Position
  • Alliances with NFL and NASCAR
  • Successful joint ventures
  • Growth in foreign markets
  • Strong brand image
    • Weaknesses
  • Lower market share in the U.K
  • They rely on only a few popular brand names, which expose the company to vulnerability when sales and economic regions fluctuate.
  • They have dependencies on raw materials.
  • Don’t appeal to class of people with a lower- disposable income.
  • They rely considerably on a small number of suppliers to obtain their packaging.
  • Molson-Coors relies on 70% of its U.S. sales from Coors Light.
    • Opportunities
  • Producing liquor or soda can also diversify risk, as sales of beer fluctuate.
  • The Asian beer market provides ample business expansion possibilities, because they are a large consumer of the product and their populations are growing.
  • Creating more strategic alliances with other companies reduces risk as they move into foreign operations
  • Provide more environmentally friendly packaging, improve pollution prevention goals.
  • Continue expanding joint ventures internationally.
  • They can produce a line of Organic Beer, Gluten free beer, or move into the higher priced market of beers.

SO Strategies

S1, O3:Expand into Asian and European market which also encourage them to diversify their products. Create alliances with companies in other countries.

S1, O2, O6 : Purchase Farms to reduce cost of raw materials and use these farms to create a new line of organic beer.

S4, S5, O4: Not only use NASCAR and NFL as sports to sponsor, many more sports out there a bigger than NASCAR- branch out

WO Strategies

W1, O1, O4, :Low market share in some countries is an opportunity to expand. Should strengthen the brand image of weaker product lines in order to prevent relying on certain products to boost their sales.

W2, W3, O2: Start utilizing personal resources (farms) rather than invest too heavily in suppliers.

swot matrix cont
SWOT Matrix cont.

Threats

Top competitors include: Anheuser- Busch & Heineken

Any significant increase in raw materials prices will negatively affect their margins.

Any significant decrease in the ability to obtain their raw materials will also affect their margins.

Perceptions that beer is not as healthy as other alcoholic beverages like wine.

Economic recession in the US increases the sales of beer at first, but as the recession continues over a longer period of time, it may cause sales to decrease

    • Strengths
  • Molson-Coors benefits from their large market share in the beer industry in North America.
  • Molson Coors is an innovative company, first by surviving prohibition in the US, when their product was deemed illegal; they began to bottle water to keep the company going.
  • Strong Financial Position
  • Alliances with NFL and NASCAR
  • Successful joint ventures
  • Growth in foreign markets
  • Strong brand image
    • Weaknesses
  • Lower market share in the U.K
  • They rely on only a few popular brand names, which expose the company to vulnerability when sales and economic regions fluctuate.
  • They have dependencies on raw materials.
  • Don’t appeal to class of people with a lower- disposable income.
  • They rely considerably on a small number of suppliers to obtain their packaging.
  • Molson-Coors relies on 70% of its U.S. sales from Coors Light.
  • ST Strategies
  • S1, S4, O1: Use market share and alliances in North America to promote company. NASCAR and NFL are only big in the US, not other markets, so have to be smart in how they promote and market their products, but can use those sports to their advantage!
  • S5,S6, O5: Expanding into other markets along with diversification of their brand, will help reduce the risk of sales in challenging financial times in the US.
  • S1, S7, O4: Use company`s strong financial position, along with strong market share percentage and alliances to create a stronger/ potentially healthier brand image.
  • WT Strategies
  • W1, T5: Molson`s low market share in other markets will suffer as a result of a recession. Expand into foreign markets!
  • W3, W5, O3: Dependency on suppliers, will be influenced even more if there are any changes in raw material prices or during recession periods.
grand strategy matrix
Grand Strategy Matrix

-Market Development

-Market Penetration

-Product Development

-Forward Integration

-Backward Integration

-Horizontal Integration

-Related Diversification

recommendations
Recommendations
  • Invest to develop and start-up a Molson Coors Craft/Organic beer line that will result in a revenue increase of 10%
  • Increase advertisement and R&D to coincide with new beer line
  • Utilize Green initiatives for the new line
  • Possible expansion in farming industries to reduce the cost of raw materials
  • Expansion of product brands to avoid relying on certain products to boost sales

Total Cost $50,000,000

slide36

Craft Beer Analysis

  • They managed to be successful, amidst economic conditions that adversely affected the beer industry.
  • Craft brewer retail dollar value in 2009 was an estimated $6.86 billion, up from $6.32 billion in 2008.
  • 1,585 breweries operated for some or all of 2009, the highest total since before Prohibition
  • recorded a 10.3 percent increase in sales by dollars and a 7.2 percent increase of sales by volume in 2009
  • Craft breweries also gained a little more market share to 6.9 percent in dollar sales and 4.3 percent in volume
objectives
Objectives
  • To be the number one global beer producer
  • Market growth in Asian and other international markets
  • Innovation investments
  • Drive value and volume in premium low calorie light products
  • Strong net revenue management
  • Continue to be socially responsible
  • Continued joint ventures and alliances
  • Brand portfolio development
  • Optimize price/volume balance – lower COGS
  • Increase dividends to shareholders
sources
Sources
  • Business Sources Complete
  • Business and Company Resource center
  • http://www.scribd.com/doc/48852989/Report-on-Craft-Beer-Industry
  • http://billybrew.com/craft-beer-101
  • http://www.scribd.com/doc/48852989/Report-on-Craft-Beer-Industry
  • http://www.craftbeer.com/pages/beerology/why-craft-beer/show?title=why-do-you-love-craft-beer
  • http://www.dailycamera.com/ci_14642832
  • http://beerpulse.com/2010/03/craft-beer-sales-up-7-2-in-2009-and-projecting-ahead-to-2010/
  • http://www.testosteronepit.com/home/2012/3/28/the-beer-war-on-american-soil.html
  • http://molsoncoors.com/en/Index.aspx
  • http://www.thebeerfathers.com/top-us-beer-brand-stats-2009-update/
  • http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=TAP:US
  • http://ycharts.com/companies/TAPA/eps#series=type:company,id:TAPA,calc:eps,,id:TAP,type:company,calc:eps&zoom=&startDate=12/31/2008&endDate=12/31/2009&format=real&recessions=false
  • www.yahoofinance.com
  • http://investing.money.msn.com/investments/financial-statements?symbol=tap
  • http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCMQFjAA&url=http%3A%2F%2Fphx.corporate-ir.net%2FExternal.File%3Fitem%3DUGFyZW50SUQ9MzQ4ODh8Q2hpbGRJRD0tMXxUeXBlPTM%3D%26t%3D1&ei=29eST7fXNsfz6QGe2ficBA&usg=AFQjCNHSn8blXTvd2F7aESbu7Vp56c3kKw&sig2=rEpO5LXJ4U0CdZGiWvPSdA
  • http://uk.reuters.com/article/2010/02/08/uk-beer-idUKTRE6173IZ20100208
  • http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCMQFjAA&url=http%3A%2F%2Fphx.corporate-ir.net%2FExternal.File%3Fitem%3DUGFyZW50SUQ9MzQ4ODh8Q2hpbGRJRD0tMXxUeXBlPTM%3D%26t%3D1&ei=29eST7fXNsfz6QGe2ficBA&usg=AFQjCNHSn8blXTvd2F7aESbu7Vp56c3kKw&sig2=rEpO5LXJ4U0CdZGiWvPSdA