Case Report ♯ 1
Coors was very successful during the mid-70s. What was his strategy?
Coors’ success in the mid-70s was somewhat favored by the overall thrive in the beer industry in the region at that time; however, his prosperity was predominantly due to his successful strategy of differentiation from his competitors in each of the business’ segments of procurement, production, distribution and marketing. The Procurement stressed upon quality and self-reliance: Coors made its own malt, most of its labels and secondary packaging, used almost entirely self-built equipment and strived for self-sufficiency in electrification. Also, he canned more beer than the industry’s average was. The Production’s and Distribution’s emphases were similarly on quality and scale. Coors relied on “natural” fermentation, no pasteurization and sterile packaging, which was also the fastest in the industry. He was producing a single kind of beer in the largest brewery in the world, which was continuously expanding. Capacity utilization was usually in the 90%-95% range since Coors’ strategy was to make more beer only after selling the previous production. In addition to that, the company had the “freshness policy” of delivery, for which they were attacked for it geographically restricted the distribution. Coors’ profitability in the mid-70s attracted many wholesalers, most of them exclusive. As for the Marketing, the brewer did not need any at that time because the beer was marketing itself through its popularity, quality and distinctive taste. On the basis of that, it is unproblematic to conclude that this strategy was indeed a good internal fit: local self-reliant companies delivering on demand high-quality merchandise of only one kind– all external costs are virtually eliminated. Coors’ successful economic logic was one of lowering the costs through scale advantage and provision of quality product. To keep his focus on the demand-driven excellence of...
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