Corona Beer Case Study
Case Study #3 Corona Beer: From local Mexican Player to a Global Brand
1) What are the dominant business and economic characteristics of the global beer industry?
Business Characteristics:
- Extremely competitive - Private label dominates - Few large companies producing many labels - Local government regulations
Economic Characteristics: - New markets need to be discovered - Saturation of existing markets - Foreign exchange rates
The global beer industry continues to be extremely competitive, most large companies have multiple private label brands to address different tastes and needs throughout the world. The industry continues to face large challenges from local governments who are imposing strict rules and taxes for companies looking to due business in their country. The economy has changed the global beer industry’s profitability, as exchange rates continue to fluctuate, companies are trying to figure out ways to reduce operating expenses to offset the decline in exchange rate. There is also a need to expand into new markets and understand the needs of that market to be successful. Existing markets are almost to the saturation point and slow growth will be experienced for companies who don’t look to diversify.
2) What do you see as the key success factors for firms in the global beer industry?
- Understanding of new potentional markets - Key people in positions who can be forward thinking - Dirvisictation into other ventures to protect from economy changes - Consolidation
The beer industry has to continue to identify new markets, and how it can establish itself in those markets. Some questions need to be asked before entering new markets. Is their population growth? Is there an infustructor in place to support the industry? Is their availability of raw materials? There are markets out there that have not been tapped, but this industry needs to understand them before entering. Experienced people are also important for this
1) What are the dominant business and economic characteristics of the global beer industry?
Business Characteristics:
- Extremely competitive - Private label dominates - Few large companies producing many labels - Local government regulations
Economic Characteristics: - New markets need to be discovered - Saturation of existing markets - Foreign exchange rates
The global beer industry continues to be extremely competitive, most large companies have multiple private label brands to address different tastes and needs throughout the world. The industry continues to face large challenges from local governments who are imposing strict rules and taxes for companies looking to due business in their country. The economy has changed the global beer industry’s profitability, as exchange rates continue to fluctuate, companies are trying to figure out ways to reduce operating expenses to offset the decline in exchange rate. There is also a need to expand into new markets and understand the needs of that market to be successful. Existing markets are almost to the saturation point and slow growth will be experienced for companies who don’t look to diversify.
2) What do you see as the key success factors for firms in the global beer industry?
- Understanding of new potentional markets - Key people in positions who can be forward thinking - Dirvisictation into other ventures to protect from economy changes - Consolidation
The beer industry has to continue to identify new markets, and how it can establish itself in those markets. Some questions need to be asked before entering new markets. Is their population growth? Is there an infustructor in place to support the industry? Is their availability of raw materials? There are markets out there that have not been tapped, but this industry needs to understand them before entering. Experienced people are also important for this
References: Historic Strategies: Grupo Modelo was formed on March 8, 1922 and officially opened its first brewery three years later Beginning in 2007, Grupo Modelo developed a strategic alliance with Nestlé Waters to produce and distribute Santa María, Nestlé Pureza Vital, and other Nestlé water brands in Mexico (Grupo Modelo 2007). Sales and Marketing: In Mexico, Grupo Modelo began developing point-of-sales convenience store locations in 1997 under the names Modelorama, Extra, and Extra Express similar to FEMSA’s OXXO convenience stores (Grupo Modelo 2007)