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Adolph Coors in the Brewing Industry

Adolph Coors in the Brewing Industry. Take-aways. Internal Fit. A strategy should fit internally Activities of the firm should link in a complementary way with one another This requires a cross-functional perspective

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Adolph Coors in the Brewing Industry

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  1. Adolph Coors in the Brewing Industry Take-aways

  2. Internal Fit • A strategy should fit internally • Activities of the firm should link in a complementary way with one another • This requires a cross-functional perspective • An activity map is an important tool to assess the internal fit of a company’s strategy

  3. An Activity Map Procurement Manufacturing Marketing Distribution Plant One Regional Scale Product Distribution Intermediate One Distribution Location Price Controls Backward Integration Cans · Other inputs · High Limited Capacity Advertising Utilization Other Product All- • Attributes Equity Unique Process • Rocky Mount. Finance Asset-Intensive • Image Long • Unpasteurized • Family Control Confronta- tional Manag.

  4. External Fit • A strategy must also fit externally • A company’s strategy needs to make sense in the “terrain” in which they are operating • Comparative financial statement analysis is a key tool for this type of assessment • Identify the key drivers of change in making comparisons

  5. Coors’ Strategy • 1970s: Product Advantage vs Competitive Advantage • Scale and Centralization • Missed opportunities • Static view of rivals and opportunities • 1980s: Constrained by Earlier Choices • Reactive strategy • Little adaptation

  6. Coors Update 1985 — Miller introduces Genuine Draft August 1 1986 — Agreement with Asahi Breweries in Tokyo—to brew and distribute Coors in Japan 1987 — Shenandoah packaging facility opened 1987 — Agreement with AFL-CIO ends 10-year boycott against Coors 1988 — Record volume moves Coors from #5 in the industry to #4 1989 — Introduced Keystone (a popular beer that cannibalized Coors’ premium sales)

  7. Coors Update 1990 — Coors rises to #3 among US brewers 1991 — Entered 50th state (Indiana) and began exporting to Puerto Rico, Guam and Cayman Islands 1992 — Spun off nonbrewing assets including diversified technology business 1993 — New president and COO hires from Frito-Lay; first non-Coors family member to be president 1994 — Purchased brewery in Spain 1996 — Anheuser Busch has captured 48% of US beer sales

  8. Coors Performance Post 1985 S&P 500 + 581% Coors + 334% (end 2003) Coors + 52% (end 1995)

  9. Coors Performance Post 1985 relative to Anheuser Busch

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