Grupo Modelo

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  • Topic: Beer, Grupo Modelo, Mexico
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  • Published : March 7, 2013
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TITLE PAGE: GRUPO MODELO AT THE BEGINNING OF THE XXI CENTURY CASE STUDY Author: Professor Miguel Angel Llano Irusta Affiliation: Full time Professor in Operations management of the Instituto Internacional San Telmo Business School; Part Time Professor in Operations management at IESE Business School; PHD on Administration by la Salle Mexico, MBA by IESE Spain, Diploma in Agribusines/Agriceutical Seminar 2002 & 2007 Harvard Business School Boston U.S.A., Industrial Engineer by Universidad Panamericana Mexico Adresss: Instituto Internacional San Telmo Seville Spain Phone 0034-954975005 Fax 0034-954958840 mllano@santelmo.org Review copy for use of the IFAMR. Not for reproduction or distribution. Date: 23/04/2007 This Case has been made thanks to Instiuto Internacional San Telmo Agribusiness Department Advisory Board, formed in November 2006 by the following companies: AECOC, AGRÍCOLA SAN MARTÍN, AGRO SEVILLA ACEITUNAS, C.C. CARREFOUR, CAJA RURAL SUR, CAMPOFRÍO ALIMENTACIÓN, S.C.A. HOJIBLANCA, COVAP, COVIRÁN S.C.A., DIAGEO ESPAÑA, FIAB, FRIMANCHA, GONZALEZ BYASS, GRUPO GALLO, HEINEKEN ESPAÑA, GRUPO YBARRA, INVERALIA, LANDALUZ, MERCADONA, OSBORNE Y CÍA, GRUPO EBRO PULEVA, RABOBANK, RENDELSUR, ROYAL SAT, BODEGAS WILLIAMS & HUMBERT.

EXECUTIVE SUMMARY
Grupo Modelo, the Mexican brewery of the famous Corona beer, was established in 1925 in Mexico. In the beginning of the 21st century it led the Mexican market in the production, distribution and sale of beer 57% market share, and Corona is the leader in the USA, and Canada importation beer segment market since 1998, and also is available in more than 150 countries where is recognized as a premium brand. The former Grupo Modelo vice-president of international sales, specifies the ambition further for the international market: "Our target has always been the total globalization of the brand” The most relevant issue on the case has to be with the strategic operation model that Grupo Modelo has, in order to be simultaneously leader in Mexico (selling great volumes of beer with low profit through a net of 550 distributors and an integrated production system) and also leader in the biggest beer market on the premium niche: USA & Canada (selling very expensive remembers in a bottle with a lemon inside of vacations, fun and sun). All the factories are located in Mexico, and every year the Benefits over Sales increase due to the reduction of the Operation Costs (every thing is done in México) and the performance in the raw material cost (with the monoproduct strategy in which Corona represents 60% of the Mexican sales and 75% of the international sales) The success of Corona in the US and Canada begun in 1980s and has become the top imported beer brand since 1998 , due to: 1) The positioning of the beer on a niche market strategy with high prices. 2) The focused to bring to consumer’s memory those beach vacations in a neighboring country. 3) The product itself: identical to the one sold and produced in Mexico. By the year 2003, more than 90% of its exports went to the US and Canada so Grupo Modelo top management decided to concentrate on tackling the non NAFTA market (specially the European market). The target was clear: 1) The goal was to repeat the success that Corona has had in the US 2) To beat Heineken (their main competitor) on their home turf. The data presented in this case constitute much of the basis for decisions that Grupo Modelo will make about the non NAFTA market in the near future.

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ABSTRACT AND KEY WORDS

ABSTRACT Grupo Modelo, the Mexican brewery of the famous Corona beer, was established in 1925 in Mexico. In the beginning of the 21st century it led the Mexican market in the production, distribution and sale of beer (57% market share with a low profit and volume strategy), and Corona is the leader in the USA, and Canada importation beer segment market since 1998, and also is available in more than 150 countries where is recognized as a premium brand. All the...
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