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Bus 599 Paper

By | Jan. 2012
Page 1 of 4
Master Degree in Business Administration

Strayer University

Strategic Management

BUS 599

Assignment 3

Submitted in Partial Fulfillment of the Requirements for the MBA program

Abstract

Through this paper, one will understand the trends in the global beer market. There will also be the possibility of Modelo’s international expansion. There will also be an assessment about the next foreign market that Modelo should get involved with. A decision about the challenges that Modelo faces from their competition InBev and how Modelo should respond to this beer industry giant is presented in this paper. Last but not least, a discussion about weather or not Modelo should diversify their business is stated in this paper.

Historically, the brewing business was known as a local industry. Furthermore, only few of the brewers were known at an international level. During the past decades, there were a lot of consolidations done within the beer industry. With the past few years, the process of global beer consolidation grew even higher. By the year 2008, there were two major acquisitions made within the global brewing industry. The two acquisitions were made of Scottish and New Castle by Carlsberg and Heineken. The other acquisition was done of Anheuser-Busch by InBev. (www.carlsberggroup.com). The trend of beer over the last five years had a combined annual growth rate (CAGR) of 4.8% worldwide. (www.encyclopedia.com/doc/1G2-2843300064.html.). Within Central America and South America, the CAGR increased to 6.3%. Africa also showed growth by having CAGR that got up to 6.4%. A key note about the growth of beer was shown in Asia. (www.encyclopedia.com/doc/1G2-2843300064.html). The trends of beer for the last five years have being tilting toward consumers wanting expensive beers. Due to that, expensive beers or premium beers accumulated 17% of the beer sales globally. The premium beer market of North America as well as Western Europe sales...

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