South Delaware Coors, Inc

Topics: Variable cost, Consumer price index, Cost Pages: 3 (813 words) Published: November 6, 2008
Case # 4

South Delaware Coors, Inc.

10/28/2008


Problem Statement
Which research studies should Larry ask Mason and Associates to complete? Upon consideration of the research study results, is this new business venture a go?

Alternatives
Larry has several different options to choose from with respect to research studies that can be completed. As long as he stays at or under his $15,000 budget he can request that any combination of studies be completed by Mason and Associates. Larry was presented with 9 different research studies that may be of assistance to him in deciding whether or not this truly is a ‘golden’ opportunity. The second part of the problem statement requires only two alternatives: To go ahead with the business, or to make a no-go decision.

Recommendation/Discussion
It is recommended that Larry choose the following studies for Mason and Associates to complete: •Study A: National and Delaware Per Capita Beer Consumption for 1988-1992 in Gallons •Study C: Estimates of Coors’ Market Share for 1990-1995 •Study E: Beer Taxes Paid by Delaware Wholesalers for 1988 and 1989 in the Market Area •Study F: Financial Statement Summary of Wine, Liquor, and Beer Wholesalers for Fiscal Year 1988 •Study H: Retailer Study (if the retailers don’t stock the product, consumers will not get it!) •Study I: Survey of Retail and Wholesale Beer Prices

The total cost of the studies completed would come to $11,249.50. Although the price of a 6 pack of Coors’ bottles can be easily looked up, if it were still 1990, a comparison of the competitions prices could be useful, this is why Larry should purchase Study I. Studies C & E can be used to compute, then forecast beer demand in the Delaware market for 1990-1992. Study C will provide an insight into projected Coors market share for the two target counties in Delaware. It is recommended that Larry make a go decision and complete an application to distribute Coors in the 2 county...
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