...CORONA BEER (MODELO) FOREIGN MARKET ENTRY AND DIVERSIFICATION Assignment #3 BUS 599 CORONA BEER (MODELO) Indentify and discuss the trends in global beer markets The consumption of beer began in the 14th century. Most breweries were local due to the tastes of certain geographical locations. In the 1990’s a tread began to form of companies acquiring smaller breweries to have a larger span of sales. This was due to the high costs of operations but having an extended stream or constant cash available for maintenance the structure of this industry supported concentration in this area. Beer consumption in developed markets continues to suffer from high unemployment, high fuel prices and constrained consumer spending. In the USA, where unemployment is particularly sever among key beer drinkers, beer volumes have fallen slightly although accompanied by consumer uptrading between industry price segments. Beer growth trends by volume% Forecast five-year compound annual growth rate (CAGR) by region – 2011 to 2015 Discuss how Modelo’s international expansion was made possible through strategic partnerships with experienced distributors in local markets. | | | | | | | | | | | | | | | | | | | | | | | Grupo Modelo first introduced Corona in Chicago through Barton Beers Ltd. Barton was one of the largest beer importers in the 25 western states and was experienced in the marketing and sales of imported beers. The second distributor that was chosen...
Words: 574 - Pages: 3
...Corona Beer: Challenges of International Expansion Corona Extra has been the world’s fourth best selling beer in terms of volume in 2005 due to its strategy in differentiation. Corona marketing campaign of “fun in the sun” and its light and citrus flavor helps products to expand its target customers far beyond its competitors. However due to merger and acquisition that occur in the industry, Corona needs to adjust itself in order to sustain its growth and improve its competitive position. Environmental Analysis PEST Analysis Political Factor: * Government regulation prohibits to import alcohol product in some country. * Tax policies on alcohol beverages may result in higher price of alcohol product in some countries. Economic Factor * Trading agreement such as NAFTA, can help firm to benefit from exports its products into the emerging market, however this might also open up the opportunities for new competitors to come into Mexico‘s beer market as well. * Instability of Mexico economic condition can affect the cost of goods sold of the products that export out of the foreign markets. Social Factor * Some countries or areas might prohibit to sell alcohol beverages. * Differentiation between global preferences. For example, beer might be popular in US and Germany, however in Italy and France, wine is more popular. Technological Factor * Technology can improve product quality and can reduce scrap or it can also improve distribution system with...
Words: 2482 - Pages: 10
...-- Corona Beer History of Corona Beer What’s in a name? Who is Grupo Modelo? What is the company’s mission and vision statement? All this and more will be answered in the literature review. According to an article titled “Mexican Beer” by Buen provecho (2010), “Corona Beer, started in Mexico in 1925 by Grupo Modelo, became a dominant brand by 1996, owning 32.7% of the Mexican beer industry. Before it became popular internationally, it had already established itself as a home-grown success. The name and label make Corona one of the most recognized beers in the United States. Corona, which means crown, was introduced to the world in 1925 at Mexico City by Grupo Modelo. It was produced in celebration of the tenth anniversary of the brewery. This is a light pale lager, at 4.6% alcohol by content. Corona has a mild flavor with very little of the hop bitterness. The color is light yellowish.” Also according to Buen provecho (2010), “Corona is one of the top five selling beers in the world. In the United States, Corona became the number one imported beer in 1997. It is the top selling import beer in Canada. Since its introduction in the US, its market share has consistently grown. It is the number one selling Mexican beer in the world and the fourth best selling beer in the world. It is available in 150 countries worldwide. All Corona beer is brewed in seven breweries in Mexico at Modelo Breweries.” According to Buen provecho (2010), “Anheuser-Busch owns 50% of Grupo Model...
Words: 2165 - Pages: 9
...STRAYER UNIVERSITY Corona Beer: Modelo Assignment 3 By: Victor Delvan Brown 02/19/2010 Professor R. Lee Viar IV BUS599 Introduction Grupo Modelo (GM) is a Mexican brewer company with more than 50% share in Mexico. The Mexican beer market was the largest producer and distributor in the beer market. The company is also an important player in the United States premium beer segment with a market share of about 6%. Three of its brands Corona Extra, Modelo Special and Corona Light are among the top ten highest selling imported beers in the US. One of the most important trends in the beer market is the volume growth which has primarily come from emerging markets. Since 2000, the compound annual growth rate (CAGR) has been 2.8% for the global beer market. However, CAGR has seen 5.1% in Asia, 3.9% in Africa and the Middle East, and a substantial 6.2% in Eastern Europe. Grupo Modelo has a distribution system covering over more than 122 countries, with its flagship brand, Corona, being the fourth largest selling brand in the world. Grupo Modelo operations...
Words: 1256 - Pages: 6
...THE CORONA PROJECT: AMERICA’S FIRST SPY SATELLITES Curtis Peebles is empowering readers with the newly declassified information on how the first American satellites were set into use for intelligence gathering. Through his book, “The Corona Project: America’s First Spy Satellites”, the author gives detailed information on the birth of the satellite program by watching the Corona project from its beginnings in the late 1940s to the declassification of the project and its exhibitions at the Smithsonian’s National Air and Space Museum. The book begins with a look into World War II and how the event of Pearl Harbor pressed the need for aerial reconnaissance. The first chapter gives the different technological challenges that had to be faced in order to achieve aerospace superiority. This chapter takes a close look into the development of the WS-117L reconnaissance satellite and how the two projects are related. The main thrust that the project received was from the launch of Sputnik I. With the Soviets now seemingly ahead, the author explains how the project was taken away from the Air Force who was failing with the WS-117L and passed the mission onto the CIA for the development of the Corona satellites. Peebles explains that the difference between the two programs is that the WS-117L promised almost real-time through radio-transmitted imagery while the Corona missions would drop the film from the nose cone for development. The engineering team faced numerous...
Words: 1182 - Pages: 5
...Case Study – Corona Beer (Modelo) Foreign Market Entry and Diversification BUS599 – Strategic Management Identify and discuss the trends in the global beer markets. Beer markets have been primarily a local industry, with only a few of the companies having international presence. “Beer was first brewed in the 14th century in Europe and developed different in every country in order to address local tastes and specific recipes” (Thompson, Strickland, & Gamble, 2010). There was an increase in industry consolidation, a development that took off in North America and Western Europe. “The consolidation began to include brewing companies in the growth markets of Eastern Europe, Asia and Latin America” (carlsberggroup.com). “The United States had the largest beer market in the world until China surpassed in 2003” (Thompson et al, 2010). In the past ten years, global consolidation has accelerated. Due to lack of transportation networks made exportation impossible and brewing remained a local industry. Other countries like Italy and France, they preferred wine over beer for consumption and then you had Germany and Ireland, who both have a few national beer brands. The trend of consolidation by national leaders started expanding in the 1990’s; “Interbrew acquired several breweries in 20 countries and expanded its sales to 110 counters, leaving local managers to control the local brands” (Thompson et al, 2010). The top 10 brewers accounted for 34% of the...
Words: 1406 - Pages: 6
...Page 1 GRUPO MODELO CASE ANALYSIS BY Page 2 Table of Contents: Financial Ratios Performance..............................................................................…………………..Pg.3 Primary Objectives and Summary............................................................................................Pg.4 Market Overview......................................................................................................................Pg.5 Key Success Factors..................................................................................................................Pgs.5-6 SWOT ANALYSIS........................................................................................................................Pg.7 Strengths...........................................................................................................Pg.7 Weaknesses.....................................................................................................Pg.7 Opportunities..................................................................................................Pg.7 Threats............................................................................................................ Pg.7 Recommendations................................................................................................................Pgs.8-9 Exhibit 1: Financial Ratios......................................................................................................Pg. 10 Exhibit...
Words: 3713 - Pages: 15
...CORONA BEER: CHALLENGES OF INTERNATIONAL EXPANSION Corona Beer, produced in Mexico by Grupo Modelo since 1922, entered the United States beer market in 1979, and by 2007, was the number one imported beer in the United States (with 1.9% market share of the global beer industry) having recently taken that position from Heineken, a rival (with 1.6% market share of the global beer industry). Corona used a broad differentiation strategy with a “fun in the sun” marketing image. It also achieved strategic success by using a distinctive glass bottle and providing a light-tasting beer that attracted a broader market. Problem identification: The global beer industry was experiencing increasing competition due to the new and potential mergers and acquisitions of its competitors. One example was the partnership between Heineken and FEMSA, which was formed in an attempt to dethrone Corona as best-selling imported beer in the United States. In addition, with the introduction of NAFTA, Canadian and U.S. competitors were slowly beginning to penetrate the Mexican market, while FEMSA continued to experience steady growth and increase its local market share. Analysis: Financial analysis indicated that costs were increasing for Grupo Modelo, while competitive analysis indicated that Anheuser-Busch spent $192M on U.S. marketing in 1985 compared to a mere $5.1M spent by Grupo Modelo. This emphasizes the financial weakness of Corona and Grupo Modelo, yet underscores what the brand was...
Words: 548 - Pages: 3
...CHAPTER 8—THE SUN-OUR STAR Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. Granulation is caused by |a. |sunspots. | |b. |rising gas below the photosphere. | |c. |shock waves in the corona. | |d. |the solar wind flowing away from the corona. | |e. |the heating in the chromosphere. | ____ 2. In some regions of the corona, the magnetic field does not loop back to the sun, and the gas escapes unimpeded. These regions are called _______________ and are believed to be the source of the solar wind. |a. |prominences | |b. |flares | |c. |granules | |d. |auroras ...
Words: 1628 - Pages: 7
...Identify and discuss the trends in the global beer markets. There are many trends in the global beer markets that effect how companies do business. One trend is that each country has different local taste and specific recipes to achieve their beer. China now has the largest beer market, surpassing the United States in 2003. The United States has six times a higher consumption of beer than China. The top three breweries of beer controlled almost 80 percent of the U.S. market. Vertical integration and economies of scales were the main drives to operating margins. “The fact that Anheuser-Bush could capture 75 percent of the industry’s total operating profits emphasized the volume effect in the industry” (Thompson, Strickland, & Gamble, 2010, p. C-251). Mexico was one of the world’s largest beer markets. Even though brewing has historically been a local industry, the last couple of decades have been increasing consolidation within the industry. The consolidation began to include breweries in the growth markets of Eastern Europe, Asia, and Latin America. The top 10 breweries account for 59% of the market in 2008. Beer consumption varies across the world. “In mature Western European markets volumes are broadly stable or declining modestly” (“Trends,”2008, p.14). In less mature markets in Asia and Eastern Europe are growing, and some at a rapid rate. Volume drivers have primarily been driven by growing disposable income, improvements in the quality of beer, marketing...
Words: 1637 - Pages: 7
...Grupo Modelo (GM) is a Mexican brewer company with a 57% share in Mexico. The Mexican beer market is the world's eighth largest beer market. The company is also an important player in the United States premium beer segment with a market share of about 6%. Three of its brands ? Corona Extra, Modelo Special and Corona Light ? are among the top ten highest selling imported beers in the US. Grupo Modelo has a distribution system covering more than 122 countries, with its flagship brand, Corona, being the fourth largest selling brand in the world. The major beer brands of the company are: Corona Extra, Corona Light, Modelo Especial, Pacifico, Victoria and Negra Modelo. Grupo Modelo operations comprise of mainly two areas: brewing process and sales. The brewing operations include five breweries located in Mexico with a total processing capacity of more than 50 million hectoliters per year. The group has several subsidiary / affiliate companies that provide support services to the core business of producing beer. GM has followed a strategy of vertical integration since the 60's which has resulted in this network of companies engaging in the brewing and ancillary operations. GM has an established distribution network in Mexican market, which is a key factor in maintaining market shares in the domestic beer market. The export sales of beer are coordinated through a set of representative offices around the world. It may also be mentioned that the distribution network of the company...
Words: 1565 - Pages: 7
...“Corona Beer (Modelo)” Foreign Market Entry and Diversification Richard J. Bradley Professor Brian Grizzell Strategic Management – BUS599 Strayer University February 9, 2012 Abstract This analysis outlines Corona Beer (Modelo) and its current strategy and position amongst the competition in the beer industry. The key question addressed is the ability of Corona Beer (Modelo) maintaining status as an industry leader among beer producers and distributers. The trends within the global beer market are also examined as it impacts Corona Beer (Modelo). A competitor analysis will be discussed and how Corona Beer (Modelo) will need to perform and react in the ever changing international markets. There will also be strategic challenges identified and how the company will handle them while facing various options and recommendations to address such challenges. In addition this analysis will outline and dissect trends affecting global beer markets. My analysis will examine how the international expansion of Modelo was initiated by strategic partnerships with various seasoned beer distributors. The analysis will also focus on Modelo and an effective strategy to enter foreign markets for success. The discussion will cover the varying challenges Modelo may encounter from the competition. By 2010, beer sales dropped some 1.5% in the United States America and slightly higher in western Europe with 2.3% (The Economist, 2011). The amount of beer consumed in blossoming...
Words: 2408 - Pages: 10
...1. What are the dominant business and economic characteristics of the global beer industry? * Market Size and Growth Rate * The size of the global beer industry approximated $385.5 in 2005 and $376.7 in 2004. This is a growth rate of 2.3% during the year 2005. * This is a mature industry with slowing growth, but it will continue to grow at a small rate. * Number of Rivals * During its early development and rapid growth stage, there were many rivals and the industry was very fragmented. * The lack of a transportation network made exportation impossible for centuries and brewing was a local, then a national domain. * Mergers and acquisitions are beginning to increase in frequency and the industry is experiencing a period of consolidation. * A determining factor of beer is that it has different national tastes based on different countries. Specialty beer-makers can find niche markets to sustain themselves without economies of scale. * Scope of Competitive Rivalry * The largest producers compete on global levels with strategic alliances set up to distribute the beer in other countries. * Most companies started out on a local or regional level, and then changed the company’s focus to incorporate a multinational or global perspective. * While many companies have exported products, most companies still use the production capabilities in their native country. * Having a presence in foreign country...
Words: 4322 - Pages: 18
...ABSTRACT: A solar tsunami is a rare astronomical phenomenon, caused by the magnetic explosion in the sun. The sun has spurted a huge cloud towards the earth which is full of electronic ions. The planet was hit by a “Solar Tsunami” racing 93 million miles across the space. Scientists have warned that the earth could be hit by a wave of violent space storm(Coronal Mass Ejection) after a massive explosion on the sun. This huge explosion could shut down the global communication and the satellites might get destroyed. “These eruptions occur when immense magnetic structures in the solar atmosphere lose their stability and can no longer be held down by the Sun’s huge gravitational pull. Just like a coiled spring suddenly being released, they erupt into space.” This means we have a very good chance of seeing major and prolonged effects, such as the northern lights at low latitudes.” The solar explosion that causes the tsunami has been observed by many satellites along with the Solar Dynamic Observatory, NASA. The blasts will reach to a maximum level in 2020 it is estimated. Along with this blast there was another blast of cold air circumference of the sun’s northern pole. A huge cloud has been thrown in to the space with these related developments. This paper focuses on the global changes caused by the future solar activity and also presented pre actions for safe guarding our lives. Key Words: Coronal mass Ejection, Solar storms, Magneto Hydro Dynamic Waves, Solar electric...
Words: 2035 - Pages: 9
...Merging: Creating economies of scale but allowing for an anti-competitive market Anheuser-Busch InBev Buys Rest of Grupo Modelo, Maker of Corona Beer In an effort to take full control of the maker of Corona Extra beer, Anheuser-Busch InBev agreed to buy the remaining share of Grupo Modelo, a large brewery in Mexico, which it had not already owned. If approved, the deal will finally unite the two companies who have shared a bond since 1993 and it will solidify Anheuser-Busch InBev’s position as the world’s largest brewer in the beer industry. Under the deal, Modelo will absorb several subsidiaries and will continue to be based in Mexico City and have a local board in order to preserve the Mexican brewer’s identity. With operations in 24 countries, the merger is expected to generate about $600 million in annual cost savings and give Anheuser-Busch InBev access to Mexico’s fast-expanding domestic market. As the world’s leading brewing company, Anheuser-Busch InBev produces, markets, distributes, and sells approximately 200 beer brands. The merge with Modelo will encourage growth by continuing to create economies of scale [Figure 1] in production. With Modelo based in Mexico City, InBev will gain new production facilities in a new geographic area after the merge. This will drastically cut costs, seeing that beer is an expensive product to ship relative to its value which causes transportation costs to account for the majority of the overall product cost. The merge will...
Words: 1145 - Pages: 5
