We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

See Pricing

What's Your Topic?

Hire a Professional Writer Now

The input space is limited by 250 symbols

What's Your Deadline?

Choose 3 Hours or More.
Back
2/4 steps

How Many Pages?

Back
3/4 steps

Sign Up and See Pricing

"You must agree to out terms of services and privacy policy"
Back
Get Offer

Anheuser Busch and Coors Brewing Company

Hire a Professional Writer Now

The input space is limited by 250 symbols

Deadline:2 days left
"You must agree to out terms of services and privacy policy"
Write my paper

Strategic Analysis of Anheuser-Busch Companies and Coors Brewing Company Tuesday, October 18, 2011 Contents Introduction3 Industry Analysis3 Barriers to Entry:3 Competitive Rivalry:4 Power of Suppliers:5 Power of Buyers:5 Substitutes:6 Summary of Five Forces:6 Strategy Analysis7 Anheuser-Busch7 Operational Excellence7 Customer Intimacy:9 Evaluation of Anheuser-Busch’s Strategy:10 Coors Brewing Company:11 Operational Excellence: Through Strategic Alliances11 Brand Management: Differentiation and Expansion14 Evaluation of Coors’ Strategy16 Event Response Analysis17

Demand Contraction: Anheuser-Busch and Coors Brewing Company17 Rise in Demand: Anheuser-Busch and Coors Brewing Company18 Conclusion19 Appendix21 Works Cited24 Introduction The two companies that will be the focus of this paper are Anheuser-Busch Companies and Coors Brewing Company (Coors).

Don't use plagiarized sources. Get Your Custom Essay on
Anheuser Busch and Coors Brewing Company
Just from $13,9/Page
Get custom paper

As of 2009, these two companies held 50. 4 percent and 10. 8 percent of the U. S. beer market, respectively[1]. The compound annual growth rate of the market value of the U. S. beer industry between 2005 and 2009 was 0. 4 percent, reaching $77. 6 billion in 2009, while the market volume grew at an even lower 0. percent reaching a volume of 24 billion liters. [2] Until 2002, the three major players within the industry, Anheuser-Busch, Coors and Miller Brewing Company, were domestically owned and together earned 75 percent of the industry revenues.

This paper focuses on the U. S. beer industry and competitive strategies of two focal companies Anheuser-Busch and Coors, prior to 2009, before global giant InBev acquired Anheuser-Busch. Despite the dominant position of Anheuser-Busch, the different strategies pursued by these two organizations will draw different reactions from each firm, should a significant event impact them.

This report highlights the differences in those reactions by (1) presenting an overall view of the industry (2) analyzing and contrasting each firm’s strategies and competencies and (3) evaluating their reactions to hypothetical events. Industry Analysis Barriers to Entry The barriers to entry for the beer industry are moderate to high, with the strategic group of large brewing companies being high and microbreweries being moderate. There are four primary factors for high barriers to entry into the strategic group of our focus: economies of scale and scope, brand loyalty, government regulation, and channel preemption of distributors.

The minimum efficient scale of production increased from 8 million barrels of beer per year in 1970 to 23 million barrels per year in 2000, demonstrating the high capital outlay required to begin production at that scale. [3] The firms in this strategic group also benefit from scope economies, as this gives them an ability to spread fixed costs over a variety of products, which are ultimately marketed to create brand loyalty – a challenge for new entrants in an industry where product differentiation is high. Beer companies spent roughly $975 million on advertising in the United States in 2007. 4] Third, the beer industry is subject to both federal and state level regulations and in this particular strategic group, the challenge stems from the need to adhere to different state regulations related to production, distribution, labeling, advertising, trade and pricing practices, credit, container characteristics, and alcoholic content. Finally, large-scale brewers have established distribution channels, which create a significant mobility barrier for new entrants and those in different strategic groups (see Figure 1). Competitive Rivalry The competitive rivalry with the beer industry is moderate.

The oligopolistic structure of the industry where 80 percent of market volume is produced by three companies decreases the threat of a price war (see Figure 3). In addition, the consolidated nature of the industry, as well as the high degree of product differentiation (whether real or perceived), lessens the competitive rivalry between firms. On the other hand, diminishing consumer demand, evidenced by declining beer sales (see Figure 2), and high fixed costs that lead to high minimum efficient scale production, increase the intensity of rivalry within the industry.

Furthermore, the capital expenditures associated with brewing beer on a large scale make the exit from the industry difficult, thereby increasing the intensity of rivalry. Taking all of these forces into consideration, the intensity of the rivalry within the beer industry can be considered moderate. While this analysis focuses on mass-market producers, it is worth noting that the craft beer market is highly fragmented and subject to a different level of competitive rivalry between firms. Power of Suppliers The power of suppliers within the beer industry is low.

The inputs for beer producers are malted grain, hops, water, and packaging (bottles, cans, or barrels). Given the scale of dominant multinational players, the threat of forward integration from the suppliers’ side is weak or non-existent. The commodity-based packaging products are typically undifferentiated and sell in efficient market. The independent hop and barley growers are numerous and have limited alternative markets besides the brewers. For instance, barley can be sold for animal feed and malted barley for distillation in the production of spirits, but breweries account for a high percentage of the overall output.

In addition, the switching costs for beer producers among various suppliers are low. Therefore, the overall bargaining power of the suppliers is weak despite the need for high quality and non-substitutable nature of the ingredients in beer production. Power of Buyers In the United States, most states require three separate components in the supply chain: producers, distributors, and retailers. This three-tiered system insulates distributors, as beer producers are not permitted to sell beer directly to retailers or consumers. 5] The regulations in place augment the power of buyers. Furthermore, distributors’ purchase volume as a percent of the focal industry’s output is high. Conversely, the relative power of distributors is dependent on how reliant their revenues are on beer sales. Overall, due to the relatively larger number of distributors compared to beer manufacturers, the dominant position of the three largest brewers, as well as the brand loyalty created by the manufacturers through brand differentiation, the power of buyers is moderate.

Substitutes The threat of substitutes is high for the beer industry, and specifically for this strategic group. According to the trade group Beverage Industry, alcohol beverage consumption per capita has risen since 2000 at around one percent per year, which suggests that consumers on average are not substituting non-alcoholic beverages for the alcohol they currently consume[6]. Since 1994, consumption per capita has increased for the three major substitutes – premium beers, wine, and spirits. 7] Although beer holds a majority market share compared to wine or spirits, a recent Gallup poll showed that 35 percent of American consumers named wine as the drink of choice, while 36 percent preferred beer – an indication that the gap is closing[8]. In addition, the net profit margin of 15. 9 percent for wine and distillery compared to 10. 5 percent for beer brewing shows that the return on investment is higher for wine and distillers[9]. Finally, the switching costs for the consumers are non-existent, thereby increasing the threat of substitute goods for the beer industry.

Summary of Five Forces Based on Porter’s five forces analysis, it can be inferred that the beer industry is moderately attractive. The factors that lead to the attractiveness are the high barriers to entry (especially into this strategic group), moderate competitive rivalry, and low supplier power. In addition, there are complementary industries to the beer industry, such as entertainment venues and national sports leagues. Increased demand for these events where beer consumption is high influences our focal industry, particularly in regards to the focal industry’s marketing efforts.

However, the force of complementors does not significantly change the attractiveness of the US beer industry. The life-cycle of the industry is mature, which is characterized by slow growth rate and declining profit margins, thereby giving rise to increased competition. Due to the mature stage of the industry and a high threat of substitutes, the industry can only be considered moderately attractive (see Figure 5). Strategy Analysis Given the competitive structure of the industry and low switching costs for consumers between competing beer brands, the major players in the beer industry compete on price and brand differentiation.

Both Anheuser-Busch and Coors realize economies of scale and scope through production, so the source of competitive advantage for these companies stems from their ability to pursue effective functional and business-level strategies to cut costs (thereby offering competitive prices) and building brand loyalty through effective perceived differentiation. Anheuser-Busch Anheuser-Busch’s focus on vertical integration, relationships with distributors, and investment in data-driven logistics system has provided it with a superior fit that makes its operational capability a sustainable competitive advantage.

Operational Excellence Operational excellence is a necessary strategy to become an effective broad differentiator. Anheuser-Busch’s processes for end-to-end product supply undergird its operational efficiency in two primary ways. First, vertical integration allows Anheuser-Busch to control the quality and quantity of its inputs (through integration), eliminating potential for excess inventories or waste, which leads to reduced costs. For instance, aluminum and barley comprise approximately 30 percent of the cost of goods sold for brewers[10].

Through various subsidiaries, Anheuser-Busch owns eight barley elevators, two hops farms, two malt plants, two rice mills, and three seed facilities. [11] In addition, 45 percent of Anheuser-Busch’s domestic beer cans and 55 percent of its domestic lids are produced by subsidiaries. [12] Second, Anheuser-Busch’s exclusive relationships with distributors allow it to control product movement better than competitors, and the level of co-operation between the two parties further reduces distribution-related costs for Anheuser-Busch.

Over 60 percent of the company’s distributors exclusively sell Anheuser-Busch products – a position achieved through brand power and a system of incentives that reward exclusivity and penalize non-compliance. [13] With 12 brewing plants spread throughout the country and this level of control over distributors, Anheuser-Busch creates operational efficiencies. [14] To illustrate this, Anheuser-Busch’s return on assets (eight percent) was double that of Coors’ (four percent) as of 2007.

In addition, Anheuser-Busch invested in a central database system that allows better forecasting of inventory, transportation and other logistical needs, thereby reducing its costs. According to Harry Schuhmacher, editor of Beer Business Daily, Anheuser-Busch is better than anyone else in the industry at managing logistics. He commented, “It’s not just collecting data…Anheuser is the smartest in figuring out how to use it. ” The company uses the “BudNet” database to collect market data from all of its distributors in a consistent format. [15]

Finally, in line with its operational excellence strategy, Anheuser-Busch embarked on a multitude of cost-cutting strategies and developed incentive-based compensation programs, pushing forth an organizational culture of waste reduction that rewards efficiency – a slight departure from a culture that historically relied on customer intimacy and effective brand differentiation as a means to boost profitability. Customer Intimacy Developing products based on consumers’ needs and preferences and differentiating the product to build brand loyalty has been at the core of Anheuser-Busch’s strategy to gain market share.

While operational excellence as a strategy is more of a recent phenomenon, customer intimacy has been the value discipline that Anheuser-Busch followed as a strategy for over two decades. Anheuser-Busch focuses on customer intimacy by investing in systems that allow it to understand customer needs better, nurturing relationships with customers through effective brand differentiation, and focusing on certain core products. Anheuser-Busch understands customer needs through its centralized information system that collects and integrates data from various sources. 16] The system connects distributors, retailers, and other business partners to gather data on sales, products, customers and competition, keeping the company abreast of the trends in order to develop products based on consumer preferences. Anheuser-Busch builds relationships with customers through perceived brand differentiation. The firm created an empire of amusement parks and sporting venues to distribute its products, further increasing brand recognition.

Through its marketing team, the Busch Media Group, a subsidiary of Anheuser-Busch, the company has appealed to its customers in a wide variety of commercials (targeting a wide range of consumers) using humor, sex appeal, and recognizable symbols and slogans. These marketing techniques induce a level of intimacy between the consumers and the Anheuser-Busch brand, thereby boosting brand loyalty. In order to build a more intimate relationship with customers, Anheuser-Busch pursued a conservative strategy by focusing on its core brands when competitors released a host of new brands of beer during the 1990s.

Bill Weintraub, the Senior Vice-President of Adolph Coors, noted, “I think they’ve (Anheuser-Busch) understood that supporting their core brands is a smarter way to build brands over the long term”, in the May 5, 1997 issue of Brandweek. Finally, to support this strategy, Anheuser-Busch made decisions to operate 12 breweries and pursue exclusive deals with distributors, thereby becoming capable of delivering its products shortly after production to the distributors (and ultimately the retailers). This ensured a level of responsiveness to its immediate customers, distributors and retailers, that other competitors could not match.

Evaluation of Anheuser-Busch’s Strategy Anheuser-Busch moved from being a differentiator to a broad differentiator once it successfully adopted the operational excellence strategy (see Figure 4). This occurred as the industry moved from growth stage to mature, which forced brewers to adopt both customer intimacy and operational excellence strategies. The inimitability of these strategies stems from the challenges an imitator would face when aligning the contradictory trade-offs that exist within the operational excellence and customer intimacy strategies.

While a competitor could imitate these strategies individually, the combination would be hard to manage as it involves a shift in the organizational culture. A customer intimacy strategy is expensive and the organizational structure emphasizes flexibility in nurturing the creative minds to fulfill the needs of the customers, while the operational excellence strategy emphasizes centralized decision-making and lean processes, both of which can arguably be counter-productive for a company built on the customer intimacy strategy.

Anheuser-Busch’s ability to balance both of these strategies provides the company with a sustainable competitive advantage. Coors Brewing Company Of the mass-market brewers operating in the United States, Coors is the newest entrant. Founded in 1873 by Adolph Coors, the company was a regional brewer until 1975, offering only one product in 11 Midwestern states. [17] Since the national rollout and Initial Public Offering in 1975, Coors has increased sales and net income significantly. From 2000 to 2007, sales jumped from $863 million to $2. billion and net income from $110 million to $497 million, a compound annual rate of 14. 6 percent and 24. 1 percent, respectively. Coors achieved these results through its ability to forge and sustain effective strategic partnerships. Operational Excellence: Through Strategic Alliances Coors has been at the forefront of the consolidation movement in the beer industry, developing alliances in several areas of the value chain. Arguably the most successful partnership to date has been with Molson in Canada.

While the joint venture did not occur officially until 2001, the two companies have collaborated on marketing and distribution initiatives since 1985[18]. The relationship between Coors and Molson continued to build after the joint venture, and in 2005 Coors merged with Molson to create Molson Coors, resulting in the world’s fifth-largest brewer by volume. Until the merger, Coors’ Golden, Colorado plant – the largest in the world – brewed more than 90 percent and packaged 63 percent of its products sold in the U. S. , materially higher than that of competitors. 19] Although Coors achieved economies of scale from the massive volume from the Golden, Colorado facility, its costs per barrel were higher than competitors due to higher transportation costs and their need for satellite redistribution centers. As of 2005, Molson operated five breweries in Canada located across the nation. Access to these breweries decreased shipping distances and lowered Coors’ sensitivity to fuel increases and natural disasters. In total, Coors realized over $50 million in merger-related synergies in each of the first three years following the merger.

Just as important, the merger represented a union of similar cultures. Although Coors had experienced rapid growth since the mid 1970s, it had retained its family-like culture and centralized base of operations in Colorado. Molson functioned in a similar way. Even after the merger, Coors maintained its family-based management style and centrally-planned operations after the merger. The complementary resources and similar cultures of the two firms created a successful combination. Coors’ strategic alliances are not limited to brewers. As of 2005, 61 percent of Coors’ U. S. roducts were packaged in aluminum cans, and 28 percent in glass bottles. [20] For both of these inputs, Coors is contractually obligated to purchase nearly all of its can and bottle needs from two companies in which it holds a 50 percent stake. In addition, Coors purchases almost 100 percent of its paperboard and label packaging from one supplier. [21] This packaging is unique to Coors and is not produced by any other supplier. Because Coors buys most of this supplier’s output, it enjoys meaningful buyer power in packaging material, thereby ensuring predictable costs and a tight operating budget.

Finally, Coors entered into a 42 percent/58 percent joint venture with SABMiller, the second largest brewer in the United States behind Anheuser-Busch, in 2008. The two companies combined their U. S. operations (“MillerCoors”), becoming collaborators in the United States, but competitors elsewhere. At the time of the joint venture, Coors and SABMiller shared over 60 percent of the same distributors. The shared distributor network gave Coors increased power in negotiating prices and product placement.

In addition, Coors gained access to new distributors, opening the possibility for better supply chain effectiveness by leveraging existing distributors. Similar to the merger with Molson, Coors gained access to geographically diverse production facilities through the MillerCoors joint venture. As a result of reduced shipping distances, economies of scale in more brewing locations, and consolidation of marketing services, Coors estimated that MillerCoors will yield $500 million in annual savings by the third year of combined operations. 22] The scale economies in advertising are particularly important because Coors spends proportionally more in promotions than Anheuser-Busch. In the advertising-heavy beer industry, controlling advertising costs is critical to operational effectiveness. Brand Management: Differentiation and Expansion In addition to lowering costs through operational effectiveness, Coors has built its strategy on product differentiation and expanding its product line. Coors differentiates its products based on unique, high quality ingredients and distinctive packaging.

Coors’ geographic location in the Rocky Mountains is a valuable and inimitable resource because of exclusive water rights. Indeed, the Rocky Mountain spring water is why Coors brews the majority of its beer at the Golden, Colorado plant. Coors uses this distinctive advantage in marketing its products to customers. For decades, Coors has used some variation of “cold” and “refreshment” themes in marketing campaigns relating to the Rocky Mountains. In this way, Coors achieves fit between production ingredients and branding activities.

Regarding established brands, Coors has focused its marketing strengths towards creating perceived product differentiation. Although in blind taste tests consumers cannot distinguish Coors Light from Miller Light from Bud Light, Coors has done a good job of positioning its main product as “Rocky Mountain cold refreshment. ” Furthermore, another campaign extended this image based on selling “THE” cold beer. Coors Light cans and bottles now have cold-activated mountains, which turn from blue to light blue at lower temperatures, as well as cold-activated strips to show whether the beer is cold or extremely cold. 23] This is in addition to the legacy “Silver Bullet” aluminum can reference. With packaging innovations and consistent marketing slogans revolving around exclusive resources, Coors has distinguished itself from competitors by reiterating its Rocky Mountain heritage and cold refreshment. One example of a new product success, which originated within Coors, is Blue Moon. Coors was a first-mover among its strategic group to introduce a Belgian-style wheat beer into the U. S. market in 1995. 24] Blue Moon started with regional success in the American northwest and grew to a national seller for Coors via word of mouth marketing, which was counter-intuitive to the industry standard of spending millions of dollars in advertising at product launch. In fact, the company made a point not to spend advertising dollars on television spots or advertising spreads. Instead, it deliberately focused marketing toward education of distributors. For example, Coors encouraged its distributors in Indianapolis to place Blue Moon in grocery stores near oranges, a complementary product for Belgian-style wheat beers.

In one aspect this is defensive channel preemption, in that other distributors have a harder time getting their brews next to produce isles. [25] Blue Moon as a brand was very successful, recording three straight years of double-digit growth from 2004 to 2006. Anheuser-Busch later launched its Belgian-style wheat beer, Spring Heat Spiced Wheat, which was a commercial failure. Operational effectiveness is not the only reason Coors pursued strategic alliances. Coors also targeted partnerships to expand its product line. Via the strategic alliance with Molson, Coors expanded its portfolio of beers to 40, giving them economies of scope.

This product expansion was important because Coors was previously heavily reliant on its Coors Light beer, which represented more than 70 percent of Coors’ U. S. sales in 2003. [26] On the heels of the joint venture with Molson, Coors acquired the Carling business segment of Bass Brewers, which it subsequently renamed Coors Brewers Limited, in February 2002. The acquisition gave the company the rights to Carling beer, Britain’s best-selling beer. [27] Finally, the MillerCoors joint venture gave the company access to an even more robust portfolio of beers, including Leinenkugel’s and Miller High Life.

Portfolio expansion through strategic alliances gave Coors instantaneous access to established brands without the risks and costs associated with research and development, product education, and marketing. Also, Coors had a product in every category and price point as a result of strategic alliances, allowing it to compete directly with Anheuser-Busch. Evaluation of Coors’ Strategy Clearly, Coors has been successful with its strategy, demonstrated by greatly improved top and bottom line metrics. To illustrate, Coors’ operating margin more than doubled from 5. 9 percent to 12. percent from 2000 to 2007, and net income rose 353 percent cumulatively. With the declining growth rate of the U. S. beer industry, it can be argued that Coors turned to strategic alliances out of necessity, for it did not and still does not have the level of resources as Anheuser-Busch. Nonetheless, Coors’ family tradition and close-knit culture has proven to be an asset in building successful strategic alliances. Through alliances, Coors has increased its operational efficiency, obtaining scale economies in scale, scope, and advertising, and efficiency in managing distributor networks.

Although Porter argues that operational effectiveness is not a standalone strategy, Coors, as well as Anheuser-Busch, has been successful in this approach. In addition, Coors expanded its product line to include a beer in every category except stout, while maintaining its unique labeling and one-of-a-kind Rocky Mountain aura. In effect, Coors has become a broad differentiator. It has lowered its cost structure over time while differentiating its product portfolio. However, one area in which Coors historically had not been able to develop beneficial partnerships is with distributors.

Coors deals with over 500 independent distributors, and it does not have much ability to influence product placement or selling techniques because each distributor sells competing products. Since Coors does not have exclusivity, it is possible that its distributors will give competitors’ products higher priority, thereby lowering sales. This is a competitive disadvantage compared to Anheuser-Busch. Event Response Analysis There are two scenarios that confront the beer industry. First, the industry is faced with a potential for severe drop in demand for beer due to changing preferences and health concerns.

Second, the demand for beer could increase substantially. Under the first scenario, prior strategic commitments, potential to expand into new markets and ability to stimulate demand or cross-subsidize in the short-term will all play a key role in each of the company’s ability to withstand a fall in demand for beer. Under the second scenario, each company’s ability to meet ramp up production and capitalize on the increased market potential through further brand differentiating while maintaining the profit margins will become a crucial factor.

Demand Contraction: Anheuser-Busch and Coors A substantial decline in US demand for beer would impact Anheuser-Busch negatively. However, it may be in a relatively stronger position than Coors for several reasons. First, the company has a stronger international presence through its majority stake in Grupo Modelo, the largest beer manufacturer in Mexico, as well as significant ownership of the Harbin and Tsingdao breweries. In the short-term, Anheuser-Busch could cross-subsidize its US operations while it implemented new strategies to diversify in the long term.

Second, Anheuser-Busch is more diversified than Coors and would be able to lean on its other business units while it adjusted to dropping demand. For example, the packaging division would still be able to supply cans to soft drink companies, its theme parks would still be operational, and the company could expand its spirits offerings to compensate for the decline in beer. Finally, Anheuser-Busch could utilize its capabilities in new product development to identify and create new market opportunities.

On the other hand, Coors would be pressed to quickly find alternative sources of revenue if demand falls. We foresee three possible responses for Coors. First, Coors does not have any beer substitutes in its product line, so a costly response could be to develop new products. The company has built its brand on the images of the Rocky Mountains and cold refreshments. This would possibly be a path into mountain spring water or sparkling water, and of course ciders would be a logical extension of its current product line.

A second option Coors would pursue if demand fell by 30 percent or more would be to acquire a substitute firm. One of Coors’s competencies is integration and recognition of fit between themselves and possible acquisitions. Whether this would be a winery, distillery of spirits, or a soda manufacturer, acquisition of a profitable substitute firm would insulate Coors from a drastic fall in demand. The third action Coors would pursue is to increase international product lines, and cross-subsidize North American operations in the short-term until demand turns around.

Rise in Demand: Anheuser-Busch and Coors While both companies stand to benefit from an increase in demand, Anheuser-Busch is in a better position to capitalize on the potential growth. Anheuser-Busch’s competitive advantage comes from its ability to manage the contradictory trade-offs inherent in its customer intimacy and operational excellence strategies. The move towards being a broad differentiator is supported by a shifting culture towards frugality, waste-reduction and efficient operations management.

As demand rises, Anheuser-Busch’s wide array of products and growing focus on its beer business, which is evidenced by its divesting trend, will position them to capture the increased market share. Finally, the growth will also position Anheuser-Busch to maximize the effectiveness of its customer intimacy strategy through its stronger financial position (a result of its operational excellence strategy). In the long term, Anheuser-Busch would seek international alliances in order to expand its product portfolio further, thereby capturing the increased market for beer in America.

Coors would also benefit from demand expansion for beer. Similar to Anheuser-Busch, the move towards being a broad differentiator enhances their ability to capitalize on the increased demand. The operational excellence strategy pursued by Coors through various strategic alliances will allow them to compete on the brand differentiation front. Coors would look to acquire or partner with another producer to further expand its portfolio of beers to capitalize on the demand increase. One material risk for Coors under the scenario of escalating demand is the possibility of shortages among the raw materials needed for beer production.

This is especially evident for package labeling because Coors relies on one supplier for this input. In the event that this supplier cannot keep up with the demand, in which case Coors would need to identify another supplier without consideration for its unique positioning as the provider of the coldest and freshest beers in the world. In effect, Coors’ brand differentiation could be impaired. For this reason, Coors is more at risk in this hypothetical situation than Anheuser-Busch. Conclusion

The five-forces analysis demonstrates the moderately attractive nature of the beer industry in which the two focal companies have generated significant profits and growth over the course of the last two decades. Anheuser-Busch and Coors pursued similar strategies and transformed themselves from being differentiators into broad differentiators (see figure 4). However, the means through which they pursued these strategies differed, as demonstrated in this paper. In the event of a significant surge in demand for beer, Anheuser-Busch is in a relatively better position than Coors due to their international presence and diversified business.

On the other hand, if demand increases, both Coors and Anheuser-Busch would engage in an intense “differentiating” war with the result determined by their ability to balance the operational excellence and customer intimacy strategies and maintaining their broad differentiator positioning. Appendix Figure 1: Strategic Groups Within the Beer Industry [pic] Figure 2: Annual Sales and Growth Rate of United States Beer Market, 2000-2009. [28] [pic] Figure 3: Market Concentration Within the Macro US Beer Industry, showing the four-firm concentration ratio (CR4) and the Herfindahl-Hirschman Index (HHI): 1947-2003. 29] [pic] Figure 4: Competitive Positioning in the Beer Industry [pic] Figure 5: Summary of Porter’s Five Forces |Porter’s Five Forces | |Barriers to Entry |High | |Competitive Rivalry |Moderate | |Power of Suppliers |Low | |Power of Buyers |Moderate | |Substitutes |High | |Overall |Moderate | Works Cited Adolph Coors Company. Annual Report. Colorado, US: Adolph Coors Company. 001. Adolph Coors Company. Annual Report. Colorado, US: Adolph Coors Company. 2003. Adolph Coors Company. Annual Report. Colorado, US: Adolph Coors Company. 2004. Adolph Coors Company. Annual Report. Colorado, US: Adolph Coors Company. 2005. Adolph Coors Company. Annual Report. Colorado, US: Adolph Coors Company. 2008. “Agricultural Operations. ” Anheuser-Busch. com. Anheuser-Busch Companies. Web. 1 Oct. 2011. . “Analysts’ Choice: Anheuser-Busch Companies. ” Dow Theory Forecasts. 22 April 2002. P8. “Analysts’ Choice: Anheuser-Busch Companies. ” Dow Theory Forecasts. 21 April 2004. Anheuser-Busch: Brewmaster. ” The Journal of Commerce. 29 May 2006: P30A “Anheuser-Busch Companies, Inc. Company Profile. ” Datamonitor: The Home of Business Information. 20 Oct. 2008. Web. Oct. 2011. “Anheuser-Busch Companies, Inc. Company Profile. ” Datamonitor: The Home of Business Information. 9 July 2008. Web. Oct. 2011. “Anheuser-Busch Companies, Inc. Company Profile. ” Datamonitor: The Home of Business Information. 3 Feb. 2009. Web. Oct. 2011. “Anheuser-Busch InBev Company Profile. ” Datamonitor: The Home of Business Information. 11 Aug. 2010. Web. Oct. 2011. “Beer in the United States. Datamonitor: The Home of Business Information. September 2010. Web. Sept. -Oct. 2011. Carter, Adrienne. “Time to Hit the Hard Stuff. ” BusinessWeek. 23 October 2006: P96. “Company Spotlight: Molson Coors Brewing Company. ” MarketWatch: Drinks (2006): 23-28. Web. 14 Oct. 2011. Elliott, Stuart. “Coors Uses Cold to Turn Up Heat on Rivals. ” The New York Times 27 Apr. 2009. Print. Ewing J, Weber J. “The Beer Wars Come to A Head”. BusinessWeek. (3884):68. Available from: EBSCO MegaFILE, Ipswich, MA. Web. October 3, 2011. Fine, Jon. “Coors: Beer. Cold. Good. ” BusinessWeek: 092. 10 Nov. 2008. Web. 10 Oct. 2011.

Fredrix, Emily. “Brewers Sign Deal to Join Operations Agreement Is Being Reviewed by Federal Antitrust Regulators. ” St. Louis Post – Dispatch (2007): A. 38. Web. 29 Sept. 2011. Gadiesh, Orit & James L. Gilbert. “Profit Pools: A Fresh Look at Strategy. ” Harvard Business Review. May/June 1998: P139-147. Goldhammer, Ted. The Brewers Handbook: The Complete Book to Brewing Beer. Clifton, Vir: Apex, 2008. Hallinan, Joseph T. “Craft Beers Have Big Breweries Thinking Small. ” The Wall Street Journal, 20 Nov. 2006. Web. 14 Sept. 2011. . Hill, Charles, and Gareth Jones. Strategic Management: an Integrated Approach. th ed. South-Western Cengage Learning. Print. 2010. Holloway, Andy. “Tale of Two Brews. ” Canadian Business, 5 June 2006. Vol. 79 Issue 12, p63-66. Web. 1 Oct. 2011. “Is This Bud For You, August IV? ” BusinessWeek. 11 Nov. 2002: P72-78. Jain, Subhash C. Global Competitiveness in the Beer Industry: A Case Study. University of Connecticut, Storrs, CT, 1994. Kaczanowska, Agata. IBISWorld Industry Report 31212: Breweries in the US. May 2011. Web. Sept. -Oct. 2011. Kaplan, Andrew. “Drinking in the Praise: Modelo, Hansen Named Companies of the Year. ” Beverage World July, 2006: 37. BeverageWorld. com.

Web. 14 Oct. 2011. Kelleher, Keving and Owen Thomas. “66,207,896 Bottles of Beer on the Wall. ” Business 2. 0; Jan. /Feb. 2004, Vol. 5 Issue 1. P47-49. Kwon, Esther Y. Industry Surveys: Alcoholic Beverages & Tobacco. New York, NY: Standard & Poor’s, 28 Apr. 2011. “Molson Coors Brewing Company Company Profile. ” Datamonitor: The Home of Business Information. 24 Aug. 2010. Web. Sept. -Oct. 2011. “Molson Coors Set to Rethink Positioning of Carling Brand. ” Marketing Week. 21 Oct. 2010. Print. Moreno, Katarzyna. “Cut to the Chaser. ” Forbes; 12/24/2001, Vol. 168 Issue 16. P109-110. Mullman, J. Cold Play: Coors Pushes Positioning. ” Advertising Age 78. 15 (2007): 4-5. EBSCO Publishing. Web. 30 Sept. 2011. “Packaging Operations. ” Anheuser-Busch. com. Anheuser-Busch Companies. Web. 1 Oct. 2011. Salmon, Felix. “Beer-drinking Charts of the Day. ” Analysis & Opinion | Reuters. Reuters, 20 Apr. 2011. Web. 16 Oct. 2011. . Sass, Tim R. “The Competitive Effects of Exclusive Dealing: Evidence from the US Beer Industry. ” International Journal of Industrial Organization; 2005, Volume 23. P203-225. Snell, Paul. “Anheuser-Busch Ups Savings Goal. ” Supply Management; 17 July 2008, Vol. 13 Issue 15.

P12-12. Tomlinson, Richard. “SABMiller vs. Anheuser-Busch in China. ” Fortune International (Europe); 6/4/2004, Vol. 149 Issue 10. P24. Tremblay, Victor J. , Natsuko Iwasaki, and Carol Horton Tremblay. “The Dynamics of Industry Concentration for U. S. Micro and Macro Brewers. ” Review of Industrial Organization 2005. 26 (2005): 307-24. Print. Waldman, Don E. , and Elizabeth J. Jensen. Industrial organization. Reading, (Mass. ): Addison-Wesley, 2006. ———————– [1] “Beer in the United States. ” Datamonitor: The Home of Business Information. September 2010. Web. Sept. -Oct. 2011. [2] Ibid. . 8 [3] Hill, Charles, and Gareth Jones. Strategic Management: an Integrated Approach. 9th ed. South-Western Cengage Learning. Print. 2010. [4] Goldhammer, Ted. The Brewers Handbook: The Complete Book to Brewing Beer. Clifton, Vir: Apex, 2008. [5] Kaczanowska, Agata. IBISWorld Industry Report 31212: Breweries in the US. May 2011. Web. Sept. -Oct. 2011. [6] Sudano, Brian. Is Beer Back? Beverage Industry. http://www. bevindustry. com/content. php? s=BI/2006/04&p=7 [7] Hill, Charles, and Gareth Jones. Strategic Management: an Integrated Approach. 9th ed. South-Western Cengage Learning. Print. 2010. 8] Arora, Raksha. Wine Matches Beer in U. S. Drinkers’ Preferences This Year. Gallup. http://www. gallup. com/poll/148676/wine-matches-beer-drinkers-preferences-year. aspx [9] Yahoo Finance. http://biz. yahoo. com/p/347conameu. html [10] Agricultural Marketing Center Resource. http://www. agmrc. org/media/cms/coors_6C217F1EDB6E5. pdf [11] “Agricultural Operations. ” Anheuser-Busch. com. Anheuser-Busch Companies. Web. 1 Oct. 2011. . [12] Analysts’ Choice: Anheuser-Busch Companies. ” Dow Theory Forecasts. 22 April 2002. P8. [13] “Analysts’ Choice: Anheuser-Busch Companies. ” Dow Theory Forecasts. 2 April 2002. P8. [14] “Analysts’ Choice: Anheuser-Busch Companies. ” Dow Theory Forecasts. 21 April 2004. [15] Kelleher, Keving and Owen Thomas. “66,207,896 Bottles of Beer on the Wall. ” Business 2. 0; Jan. /Feb. 2004, Vol. 5 Issue 1. P47-49. [16] Kelleher, Keving and Owen Thomas. “66,207,896 Bottles of Beer on the Wall. ” Business 2. 0; Jan. /Feb. 2004, Vol. 5 Issue 1. P47-49. [17] Jain, Subhash C. Global Competitiveness in the Beer Industry: A Case Study. University of Connecticut, Storrs, CT, 1994. http://www. fmpc. uconn. edu/publications/rr/rr28. pdf P. 9 [18] Adolph Coors Company.

Annual Report. Colorado, US: Adolph Coors Company. 2004. P. 15 [19] Adolph Coors Company. Annual Report. Colorado, US: Adolph Coors Company. 2003. P. 43 [20] Adolph Coors Company. Annual Report. Colorado, US: Adolph Coors Company. 2005. P. 23 [21] Ibid. P. 32 [22] Adolph Coors Company. Annual Report. Colorado, US: Adolph Coors Company. 2008. P. 4 [23]Elliott, Stuart. “Coors Uses Cold to Turn Up Heat on Rivals. ” The New York Times 27 Apr. 2009. Print. [24] Mullman, J. “Cold Play: Coors Pushes Positioning. ” Advertising Age 78. 15 (2007): 4-5. EBSCO Publishing. Web. 30 Sept. 2011. [25] Hallinan, Joseph T. Craft Beers Have Big Breweries Thinking Small. ” The Wall Street Journal, 20 Nov. 2006. Web. 14 Sept. 2011. . [26] Adolph Coors Company. Annual Report. Colorado, US: Adolph Coors Company. 2003. P 44. [27] Adolph Coors Company. Annual Report. Colorado, US: Adolph Coors Company. 2001. [28] “Beer in the United States. ” Datamonitor: The Home of Business Information. September 2010. Web. Sept. -Oct. 2011. [29] Tremblay, Victor J. , Natsuko Iwasaki, and Carol Horton Tremblay. “The Dynamics of Industry Concentration for U. S. Micro and Macro Brewers. ” Review of Industrial Organization 2005. 26 (2005): 307-24. Print.

Cite this Anheuser Busch and Coors Brewing Company

Anheuser Busch and Coors Brewing Company. (2019, May 02). Retrieved from https://graduateway.com/anheuser-busch-and-coors-brewing-company-2-642/

Show less
  • Use multiple resourses when assembling your essay
  • Get help form professional writers when not sure you can do it yourself
  • Use Plagiarism Checker to double check your essay
  • Do not copy and paste free to download essays
Get plagiarism free essay

Search for essay samples now

Haven't found the Essay You Want?

Get my paper now

For Only $13.90/page