Based on our analysis of the South Delaware Coors Wholesale Distributorship opportunity, we recommend proceeding with the application process for the following reasons:
1. The expansion of Coors Inc. into southern Delaware fills a market void that is normally supplied by the fourth largest brewery in the United States.
2. The break-even analysis which indicates a considerable positive difference between the figures required to reach the break-even point for the South Delaware Coors Wholesale Distributorship and the figures possible based on the predicted percentage of market shares for Coors Inc. nationally.
3. The sensitivity analysis illustrates that investment in the South Delaware Coors Wholesale Distributorship would be able to be profitable under several types of negative scenarios.
Basis for Recommendation
Our recommendation to pursue the South Delaware Coors opportunity is supported by the three following reasons:
1. Coors brewing company produces a high quality produce and fills a void within the South Delaware market. The venture provides a unique opportunity to introduce this product and to expand throughout the market area. Market research indicates that Coors would be very well received within the market area and would prove to be an exciting opportunity for investment.
2. The Break Even Analysis which indicates a break-even point of 305,000 gallons, which is 5.98% of the total beer market within our two county market area, a market share which is significantly lower than Coors Inc. current national market share average of 8.8%. Achieving a market share consistent with the Coors Inc. national average would make Mr. Brownlow’s return on investment equal 38.2%
3. The Sensitivity Analysis explored the overall increase of fixed costs, the need to increase/decrease the cost of a six-pack and an increase in the interest rate. Overall fixed costs could be increased by 33.77%, the price of a six-pack of beer could be reduced to... [continues]
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(2011, 06). South Delaware Coors. StudyMode.com. Retrieved 06, 2011, from http://www.studymode.com/essays/South-Delaware-Coors-721199.html
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