Corona Beer (Modelo)
Strayer University
Ms. Gigi Smith
Strategic Management – BUS 599
November 14th, 2010
Abstract
This case analysis presents a synopsis of Corona Beer (Modelo) current strategy and its position within the competitive beer industry. The key question being addressed is whether Modelo would be able to maintain its status as one of the market leaders in beer production and distribution as competition in the industry increases. This paper presents an analysis of the trends within the global beer market, analysis of the foreign market of Modelo, competitor analysis, and by identifying the strategic challenges being faced and various options and recommendations to address them.
Identify and discuss the trends in the global beer markets.
The trend towards premium beer consumption has slowed somewhat in the recent economic downturn. However, down-trading is limited and there are notable instances of consumers continuing to trade up, both into beer and, within the category, into premium products. The beer industry has also seen a trend towards consumers trading up to attractive, local, premium and more expensive beers. Since 1997 Corona has become the number one imported beer in the US, substituting Heineken who had held the number one spot in the beer industry since 1933. (Thompson, Strickland, & Gamble, 2010) With Corona expanding their company internationally into the United States and Canada, Grupo Modelo has already responded to the potential threats that may come because of the unpredictable Mexican economic system and their political environments. During the past five years, on a pure alcohol-equivalent basis, beer has increased its share of total alcohol consumption by more than 200 basis points (bps) to 41.1%. In 2008 the trend slowed somewhat and beer’s year-on-year share of total alcohol consumption remained flat. In emerging markets, beer has generally shown higher growth than other alcohol categories as
Ms. Gigi Smith
Strategic Management – BUS 599
November 14th, 2010
Abstract
This case analysis presents a synopsis of Corona Beer (Modelo) current strategy and its position within the competitive beer industry. The key question being addressed is whether Modelo would be able to maintain its status as one of the market leaders in beer production and distribution as competition in the industry increases. This paper presents an analysis of the trends within the global beer market, analysis of the foreign market of Modelo, competitor analysis, and by identifying the strategic challenges being faced and various options and recommendations to address them.
Identify and discuss the trends in the global beer markets.
The trend towards premium beer consumption has slowed somewhat in the recent economic downturn. However, down-trading is limited and there are notable instances of consumers continuing to trade up, both into beer and, within the category, into premium products. The beer industry has also seen a trend towards consumers trading up to attractive, local, premium and more expensive beers. Since 1997 Corona has become the number one imported beer in the US, substituting Heineken who had held the number one spot in the beer industry since 1933. (Thompson, Strickland, & Gamble, 2010) With Corona expanding their company internationally into the United States and Canada, Grupo Modelo has already responded to the potential threats that may come because of the unpredictable Mexican economic system and their political environments. During the past five years, on a pure alcohol-equivalent basis, beer has increased its share of total alcohol consumption by more than 200 basis points (bps) to 41.1%. In 2008 the trend slowed somewhat and beer’s year-on-year share of total alcohol consumption remained flat. In emerging markets, beer has generally shown higher growth than other alcohol categories as
References: Thompson, A., Strickland, A., &Gamble, J. (2010). Crafting and executing strategy (17th ed.). New York: McGraw-Hill-Irvin. http://www.corona.com/home/index.jsp Heineken to take over Mexican beer brands in U.S.". USA Today. 2004-06-21. http://www.usatoday.com/money/companies/2004-06-21-heineken-mexico_x.htm. Retrieved 2010-11-12. "Modelo 's Corona brand has been the top-selling import beer in the United States for years and is the seventh-best selling brand their overall." http://www.businessweek.com/magazine/content/05_06/b3919098_mz058.htm Grupo Modelo. (2009). Company Website. Retrieved 12 November 2010 from http:// www.gmodelo.com