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Adolph Coors in the Brewing Industry

Learn from Adolph Coors' strategic journey in the brewing industry, focusing on internal and external fit, key activities, and market dynamics. Explore Coors' historical updates, challenges, and successes post-1985, including performance metrics and strategic shifts.

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Adolph Coors in the Brewing Industry

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  1. Adolph Coors in the Brewing Industry Take-aways

  2. Internal Fit • A strategy should fit internally • Activities of the firm should link in a complementary way with one another • This requires a cross-functional perspective • An activity map is an important tool to assess the internal fit of a company’s strategy

  3. An Activity Map Procurement Manufacturing Marketing Distribution Plant One Regional Scale Product Distribution Intermediate One Distribution Location Price Controls Backward Integration Cans · Other inputs · High Limited Capacity Advertising Utilization Other Product All- • Attributes Equity Unique Process • Rocky Mount. Finance Asset-Intensive • Image Long • Unpasteurized • Family Control Confronta- tional Manag.

  4. External Fit • A strategy must also fit externally • A company’s strategy needs to make sense in the “terrain” in which they are operating • Comparative financial statement analysis is a key tool for this type of assessment • Identify the key drivers of change in making comparisons

  5. Coors’ Strategy • 1970s: Product Advantage vs Competitive Advantage • Scale and Centralization • Missed opportunities • Static view of rivals and opportunities • 1980s: Constrained by Earlier Choices • Reactive strategy • Little adaptation

  6. Coors Update 1985 — Miller introduces Genuine Draft August 1 1986 — Agreement with Asahi Breweries in Tokyo—to brew and distribute Coors in Japan 1987 — Shenandoah packaging facility opened 1987 — Agreement with AFL-CIO ends 10-year boycott against Coors 1988 — Record volume moves Coors from #5 in the industry to #4 1989 — Introduced Keystone (a popular beer that cannibalized Coors’ premium sales)

  7. Coors Update 1990 — Coors rises to #3 among US brewers 1991 — Entered 50th state (Indiana) and began exporting to Puerto Rico, Guam and Cayman Islands 1992 — Spun off nonbrewing assets including diversified technology business 1993 — New president and COO hires from Frito-Lay; first non-Coors family member to be president 1994 — Purchased brewery in Spain 1996 — Anheuser Busch has captured 48% of US beer sales

  8. Coors Performance Post 1985 S&P 500 + 581% Coors + 334% (end 2003) Coors + 52% (end 1995)

  9. Coors Performance Post 1985 relative to Anheuser Busch

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