Industry and Competitive Situation Analysis:BEER …kimboal.ba.ttu.edu/MGT 4380 FL 09/006/C… ·...
Transcript of Industry and Competitive Situation Analysis:BEER …kimboal.ba.ttu.edu/MGT 4380 FL 09/006/C… ·...
INDUSTRY AND COMPETITIVE SITUATION
ANALYSIS:BEER INDUSTRY
Team 3Mason MitchellRandy GreinertSarah YelvertonAlec Cooper
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
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 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 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 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 Rule of three and four: 78% of US beer
market owned by MillerCoors and Anheuser-Busch
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 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 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 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 Acquired Carling from Bass Brewers,
which made them a player in the United Kingdom.
Also export products to Australia, Japan, and Caribbean Islands
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 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
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 statementsNet Income Operating Revenues
2008 2007 2006 2005 20040.0
100.0200.0300.0400.0500.0600.0
SAMTAP
2008 2007 2006 2005 20040.0
2,000.0
4,000.0
6,000.0
8,000.0
SAMTAP
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 Strengths: - Strong industry position- Portfolio of strong brands- Strong financial performance Weaknesses:- Dependence on few products- Reliance on third party service providers
Opportunities:- Strategic Agreements- Growing Hispanic population in the US- Growing beer consumption in Asia Threats:- Government regulations- Changing consumer preferences- Industry consolidation
Strategy 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 changeRise of wine, spirits, and craft beer
34% wine40%beer22% spirits
In 1995 beer was 46% now 40%
People are becoming more healthconscious
Increase in Mergers and acquisitions
Strong and Weak Companies Anheuser-Bush Molson Coors
Pats Blue RibbonDecreasing market share 2007 5.9% 2008 2.7%Beer ranked 18 out of 20 top beers
Competitive Moves Mergers and Acquisitions
Pats Blue RibbonBoston Beer Company
Add craft brewers to product mix312ESB