Case of Molson Beer
Molson Coors
2012
Table of Contents
Executive Summary………..……………………………3
Snapshot of Molson Coors………………………………4
External Environment……..…………………………….5
Corporate Strategy………………………………………7
Internal Environment…………………………………...11
Alternatives……………………………………………..12
Appendix………………………………………………..16
Exhibit CS-1: 2011 Allocation of Gross Rev…..…16
Exhibit 1: Resource Based View RBV……………16
Exhibit CS-2 Goss Rev Annual Trend…….……...17
Exhibit 2: Molson-Coors Five Forces………….....18
Exhibit 3: Molson-Coors Value Chain……………18
Exhibit 4: Molson-Coors SWOT Analysis…….....19
2
Executive Summary
The most important strategic issue facing Molson Coors today is determining how to increase profits across all geographic regions in which the firm competes. There are a number of problems that the company faces in the domestic market and abroad. The primary market in which Molson Coors competes is the price segment. The firm’s market share of that segment has leveled off at approximately 10% of the market. The firm’s primary competitor in that market, InBev, who acquired Anheuser-Busch in 2008 for $52 billion, is the world’s largest brewer. Anheuser-Busch controls 50% domestic market share. Because of InBev’s massive size, it can dramatically outspend Molson
Coors as far as advertising and marketing. Another part of Molson Coors’s problem is that the market for mass produced malt beverages, i.e. beer, is declining. Growth in the domestic beer market is expected to come from the import and premium segments, segments in which the firm is not strong.
There are certain steps the company should take in order to properly address the strategic issue at hand. Molson Coors should increase its acquisition activity not only of import brands, but also especially of small microbreweries. These actions will allow the firm to participate in the growth segments of the industry. Another option is for the firm
2012
Table of Contents
Executive Summary………..……………………………3
Snapshot of Molson Coors………………………………4
External Environment……..…………………………….5
Corporate Strategy………………………………………7
Internal Environment…………………………………...11
Alternatives……………………………………………..12
Appendix………………………………………………..16
Exhibit CS-1: 2011 Allocation of Gross Rev…..…16
Exhibit 1: Resource Based View RBV……………16
Exhibit CS-2 Goss Rev Annual Trend…….……...17
Exhibit 2: Molson-Coors Five Forces………….....18
Exhibit 3: Molson-Coors Value Chain……………18
Exhibit 4: Molson-Coors SWOT Analysis…….....19
2
Executive Summary
The most important strategic issue facing Molson Coors today is determining how to increase profits across all geographic regions in which the firm competes. There are a number of problems that the company faces in the domestic market and abroad. The primary market in which Molson Coors competes is the price segment. The firm’s market share of that segment has leveled off at approximately 10% of the market. The firm’s primary competitor in that market, InBev, who acquired Anheuser-Busch in 2008 for $52 billion, is the world’s largest brewer. Anheuser-Busch controls 50% domestic market share. Because of InBev’s massive size, it can dramatically outspend Molson
Coors as far as advertising and marketing. Another part of Molson Coors’s problem is that the market for mass produced malt beverages, i.e. beer, is declining. Growth in the domestic beer market is expected to come from the import and premium segments, segments in which the firm is not strong.
There are certain steps the company should take in order to properly address the strategic issue at hand. Molson Coors should increase its acquisition activity not only of import brands, but also especially of small microbreweries. These actions will allow the firm to participate in the growth segments of the industry. Another option is for the firm