CORONA BEER: CASE STUDY

Corona Beer: Case Study



Corona Beer: Case Study

Question: 1

At the beginning of the century, one-third of the global beer sales were in the top ten brewers of the market. In the previous decade, four major brewers of the industry accounted for almost 50 percent of the sales volume of beers. They also led the industry accounting for around 75 percent of the global profit share. This consolidation continued with further transaction for past twelve months. As the amount of consolidations will slow down in the future, the organic growth is expected come down because of the developing markets with an increase in opportunities in the developed markets. (Birkinshaw, Morrison, Hulland, 2005)

A trend of alcoholic category has shown a dichotomy between developed and developing beer markets. With the increase in emerging markets, customers have shifted from unregulated, informal forms of beer products to attractive, safer, aspirational and branded alcohol products. There was a commercial increase in the beer production from the era of 1999-2008. The beer market also brought an increase in the total consumption of alcohol in the emerging markets, on purely alcoholic basis, by more than 800 bps from 32.8 percent to 41.2 percent during this era. In the same era, there was a temperate decline to 35.2 percent in 2008 in the developed markets.

An economic down turn was faced by the overall beer market in the year 2009. It was further intensified by the fiscal pressure of the government which led to an increase in excise of beer and other taxations to raise funds. As a result there was an increase in the consumer prices, constraining the sales of beer whilst favoring the unregulated and informal forms of beer.

As there has been an improvement in the global economy, there has also been a continuous rise in income in the developing beer markets as the level grows at the expense of high alcohol, illicit spirits. In Latin America and Asia, the rise in the consumption of alcohol is highly correlated with income and population growth.

Question: 2

For entering into a foreign market, a businessmen need to take care of few strategies and things.

He or she needs to understand the potentials of the new market.

Identify key employees of the company which can be utilized for forward thinking.

The company needs to prepare the company for diversification in different ventures in order to protect the company from economy changes.

Consolidation

Modela immediately got recognition in the beer market of United States as it came up with a non-refundable policy. Due to its unique and attractive bottle, Corona was easily able to distinguish itself from the rest of the companies. It quickly became famous in the southern east. In 1992, Modela approached for another pricing strategy in order to increase its sales. (Som, 2004) The company has come up with a different strategy every time it hit any new market. To enter in the European market it went through the consolidation strategy. Another strategy it applied was to have an agreement ...