Case Study: Corona Beer: From a local Mexican player to a global brand
What are the dominant business and economic characteristics of the global beer industry? The global beer industry is a very large industry which has a great influence and effect of the country. This industry contribute to a high extent to the society by increasing tax dollars, purchases from suppliers, offset for agricultural produce, jobs, etc. The market growth rate of the beer industry is increasing which is illustrated by the following statistics of the top global beer brands (in millions of barrels - shipments) for the time period of 2005 to 2006:
200520062006 Market Share
Asahi Super Dry1514.81.1%
The growth of the global top brewing companies in product produced (in millions of hl) in 2000-2005 the same trend was already visible earlier on:
1Anheuser-Busch - 121InBev – 233.5
2Heineken – 74Anheuser-Busch – 152
3Ambev – 63SABMiller – 135
4Miller Brewing – 53Heineken – 107
5SAB – 43Carlsberg – 78
6Interbrew - 37Scotish&Newcastle - 52
Reference: Essec Business School, Corona Beer case study (2008) Prior to 1990 the national market consists of few major competitors, and there after the leading companies expanded abroad. By using progressive consolidation the result turned out to a small number of global players in the industry by 2004-2007. A high level of competition amongst the leading brands and a fight to gain the most market share was the reality. Another measurement which needs to be considered is the scope of competitive rivalry in order to identify the economic characteristics of any industry. For the beer industry the scope entails the global geographic area over which most of the leading brewing leaders compete. One of the key success indicators is the ability to penetrate the foreign market arena, which is a challenge to most of the competitors in the beer industry. Modern technology enables the beer companies to improve their competitiveness and ability to address market needs and utilize market opportunities better. By the use of high speed packaging lines the number of units per day increased and with computerized control, the inventory can be tracked throughout the distribution network. These inventions increased the pace of technological change in the industry. Companies invest huge amounts of money and employ highly qualified personnel in order to beat the competition in every possible way.
Key success factors for firms in the global beer industry?
To me a key success factor in the global beer industry would be the production rate and the speed in which the company can transport it and distribute it the address the needs and utilize the opportunities in the market place. Today this is achieved by assembly lines that are automated and can process ten thousands of beer bottles in an hour. Further more the global companies need to come up the recipe that satisfy the taste preference of the market, which is challenge since the history resulted in local tastes and specific recipes that the local markets are use to. Another key success factor is the marketing campaign that supports the product. Alcohol usage seems to be a combination of various senses within the human being and that person’s perception around the whole principle. If the perception of the brand contributes to the consumer’s perception of them the sales will automatically increase. The beer industry is all about marketing! Therefore a brilliant marketing campaign is essential to be successful. Another key success factor is the ability to compete in price sensitive markets which is...