Adolph Coors

1. Adolph Coors Team Pirates Spring 2008

3. Five Forces of Competition Competitive Advantage in 1970s Suppliers and buyers have weak positions - Good wholesalers and retailers relations - Vertical integration High entry barriers - Economies of scale - Differentiation and Customer relations Few threats from substitute products - Few categories - Differentiation • Moderate rivalry • Competitors • - High growing industry

4. What went wrong ? • Operating Performance • Slow growth

5. Major Brewers’ Operating Income (per Barrel) For 1977 For 1985 in $’s of 1977 • Low Revenue • Operating Cost too high • Production Cost • Transportation Cost • Advertizing Cost

6. Slow growth compare to Competitor • Method of production • Only one facility • Not able to produce in advance • Exposition on U.S Territory • Diversity of products available

7. Factors to Coors Stagnation • Unfocused strategy • From one brand to the fall • The “cult” of Coors • The Water Mystique • Coors’ image problem • AFL-CIO Strike and boycott • Coors’ and the minorities • Coors’ family views

8. Coors Banquet • One brewery • Only distributed in the West (11 states) • Product Differentiation Strategy • Only in draft • Uniqueness of ingredients “Rocky Mountain Springwater”

9. Coors’ Mystique • Burt Reynolds in the movie “Smokey and the Bandit” • Gerald Ford and Henry Kissinger • The In n’ Out effect

10. Coors’ Expansion • Geographic Expansion • Roll out in the fifty states • Product Expansion • Killian, Greystone, and Shulers • Line Expansion • Light beer, ice beer, dry beer, red beer, … • Production Expansion • Opening of a new packaging plant in Virginia

11. The Water Mystique The original Coors’ can • Expanding nationally actually hurt Coors’ image. • Cross-brewing • Too much availability led to Coors’ commonness

12. AFL-CIO Boycott • Lasted from 1977 to 1987 • Market share dropped in California from 40% to 10%. • AFL-CIO represents 13 million workers • Union representative reached out to minorities organizations, universities, stadiums, and entertainment parks. • Wanted to show that Adolph Coors is “antilabor, and therefore antipeople” • N.E.A and N.O.W joined the boycott with more than 5 million people.

13. Unfounded accusations • Anti gay, anti minorities, anti woman employment practices • Not eco-friendly • Comments taken out of context viewed as racists • Coors’ family contribution to conservative political group

14. Boycott Coors

15. Recommendations Diversification Multipoint competition Synergy • Create a new market • Miller & Coors vs. Anheuser Busch • Create a stronger brand • More value • Risk reduction

16. Focus Strategy Focus more on consumer needs Wholesalers Buyers • Change production method • “Freshness Policy” • More accessible • On-premise • Off-premise

17. Focus Strategy • Create new advertising campaigns • Focus on other segments of beer • Regionalize in terms of marketing and sales activities • Create a low cost strategy • Create more facilities

18. Coors Current strategy • Engaged in a 3-part strategy in 2004 • (1) "Drive growth on Coors Light and Coors Original via a full line of support, including over 20 television spots, promotions, radio, out of home and print.” • (2) "Support Keystone Light, Killian's, Zima, Blue Moon and Mexicali with local programming.” • (3) "Respond aggressively to low-carb opportunities." • Merged with Molson in 2005 • Merged with SABMiller in 2007

19. Coors’ Current strategy • Direct competitor to Anheuser-Busch after the merger with SABMiller. • Expansion in developing market, such as Asia and Africa • Goes up against the heavy marketing strategy of Anheuser-Busch, which spends twice the advertising expense of Coors, $2.5 billion and 50.6% of the market share.

20. Thank you!