CASE 13: From a Local Mexican Player to a Global Brand
1. The beer industry has been around for thousands of years and will without a doubt, continue to do so. In many cases, very little has changed since its beginning. You still make beer the same way it has always been made. The key to success is to figure out how to efficiently get your beer into the hands of as many people as possible. It isn’t a hard industry to get into on a small level, but it’s very hard to compete with the companies.
2. The key success factors for this industry as a whole are achieving economies of scale through different levels of vertical integration, distribution partnerships and marketing.
3. A strategic group map of the beer industry would show two massive, all consuming players covering a huge percentage of the global market, a number to mid level players like Grupo Modelo and Molson Coors, large scale “micro brews” like Sam Adams, and a large number of regional micro brews. Grupo Modelo’s position in this industry, for the moment at least, is solid. They have an internationally recognized product with solid sales and a good marketing strategy. They have basically broken the marketing of Mexican beer in half with their closes Mexican competition FEMSA. Grupo is pursuing a global position while staying relevant domestically, while FEMSA is focusing on the domestic market but also keeping itself on the international radar. Grupo Modelo’s position over Heineken is solid but with the trend towards conglomeration, Grupo needs to be focused on other areas of global competition.
4. Its strengths are its marketing and distribution methods in the United States Weaknesses- it is very vulnerable to exchange rate risk, lack of vertical integration. It has a distribution agreement in the US that is not easily matched (FEMSA tried but did not succeed) Modelo has primarily been a multicounty...