In the year 1922, Cervecería Modelo S.A. was formed. With an objective in mind to prioritize Mexico City and its surrounding areas as its target consumer segment, the company opened its first brewery in 1925, three years later after the company was created. The first brand to be produced by the group was Modelo then the brand Corona came a month later (Som 2008, p. C-248). And in 1997, Carlos Fernandez was named chairman of Grupo Modelo.
Under the supervision of Carlos Fernandez as chairman, Grupo Modelo was able to expand its distribution in the American market. In 2007, the company was exporting five different kinds of beer to the U.S. namely: Corona Extra, Corona Light, Modelo Especial, Pacifico Clara, and Negra Modelo (Som 2008, pp. C-249-C-250). Ever since Grupo Modelo penetrated itself into the United States, its products were regarded to be part of the top imported beers in the country. In fact, Corona Extra, one of the group’s brands was ranked as the number one imported beer in the U.S. from 2006-2007 (Som 2008).
Based on your analysis of the global beer industry and Grupo Modelo’s situation, what problems and issues does the company’s top management need to address?
Being Mexico’s largest beer producer and distributor, Grupo Modelo aspired to increase production and capacity due to the growth of their international demand. Consequently, the company invested more than $300 million worth of major renovations in one of their brewing facilities in Zacatecas, Mexico. In 1997, Grupo Modelo became the number one selling import in the United States, exceeding that of Heineken’s. The competitors of Modelo did not go down without a fight and did not let that come to be without doing anything. Therefore, the company started facing difficulties and complications in its domestic and international markets (Som 2008, p. C-248).
Being the largest beer importer in 25 western states across the Unites States and being the most experienced in marketing and...
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