...ISSN 1940-204X COORS BALANCED SCORECARD: A DECADE OF EXPERIENCE Hugh Grove University of Denver Tom Cook University of Denver Ken Richter Coors Brewing Company IntroductIon By the end of 1997, Coors had finished the implementation of a three-year Computer Integrated Logistics (CIL) project to improve its supply chain management. Coors defined its supply chain as every activity involved in moving production from the supplier’s supplier to the customer’s customer. (Since by Federal law, Coors cannot sell directly to consumers, Coors customers are its distributors whose customers are retailers whose customers are consumers.) Coors supply chain included the following processes: purchasing, research and development, engineering, brewing, conditioning, fermenting, packaging, warehouse, logistics, and transportation. This CIL project was a cross-functional initiative to reengineer the business processes by which Coors logistics or supply chain was managed. This reengineering project improved supply chain processes and applied information technology to provide timely and accurate information to those involved in supply chain management. The project objective was to increase company profitability by reducing cycle times and operating costs and increasing customer (distributor) satisfaction. The software vendor used for this project was the German company, Systems Applications & Products (SAP), 1 that provided the financial and materials planning software modules. The SAP planning...
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...Adolph Coors in the Brewing Industry – Case Study By mid-1970, Adolph Coors Company was extraordinarily successful, posting year-to-year volume gains for the last 23 years and gaining a 16% Return on Sales at its height. However, between 1975 and 1985, performance declined greatly relative to the rest of the brewing industry. In the early 1980’s, Coors faced a key decision, whether to build a second brewery on the east coast. Would an additional brewery improve its position significantly? What else could Coors have done to improve their position? Could Coors have changed their strategy in order to take advantage of the changes in the brewing industry, or were they destined to be the victim of changes in the industry that they could neither control nor remedy? Extraordinary Success into the 1970s Coors was extremely successful prior to 1977. Key to their strategy was a set of unique, co-specialized elements: geographic focus, low-cost production, a differentiated product, and market power over their distribution customers. By managing these aspects well, Coors achieved 21.2% market share in their market, with the lowest relative amount of advertising in the industry. At the same time Coors’ low cost per barrel, at $29, was second only to Heileman Brewery. In spite of their low cost, Coors’ differentiated product allowed them to charge a premium over most of their competitors, giving Coors the highest profit margins in the industry, nearly twice that of their nearest competitor...
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...The Coors Case Balanced Scorecard By the end of 1997, Coors had finished the implementation of a three-year computer-integrated logistics (CIL) project to improve its supply chain management. Coors defined its supply chain as every activity involved in moving production from the supplier’s supplier to the customer’s customer. (Since by federal law, Coors cannot sell directly to customers. Coors customers are its distributors whose customers are retailers whose customers are consumers). Coor’s supply chain included the following processes: purchasing, research and development, engineering, brewing, conditioning, fermenting, packaging, warehouse, logistics and transportation. The CIL project was a cross-functional initiative to reengineer the business processes by which Coor’s logistics or supply chain was managed. The reengineering project improved supply chain processes and applied information technology to provide timely and accurate information to those involved in supply chain management. The project objective was to increase company profitability by reducing cycle times and operating costs and increasing customer (distributor) satisfaction. The software vendor used for this project was the German Company Systems Application & Products (SAP), which provided the financial and materials planning software modules. The SAP planning software became Coors’s load configurator software, which takes distributor demand forecasts and the production schedule and...
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...South Delaware Coors, Inc | | | 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...
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...Elliott Nelson South Delaware Coors Distributor * Strategic problem * Larry wants to buy a wholesale distributor of Coors * Has gone to Manson and Associates to conduct research on the plan to decide how to proceed * Given 9 different research opportunites to gain insight on the feasibility of the project * Limited funds can’t perform all studies, pick which ones are the best * Yes or no to opening plant * Cost * Issues * Cost * Which research will be most valuable * Whether the investment is worth it Back round * Larry Brownlow * MBA student, entrepreneur, looking to invest in a smaller self owned business * Trust fund of 500,000 * Research amount available 15,000 * Decide on whether to invest in the Coors distributorship limited time * Coors * Unwilling to compromise on quality * Open 1873 golden Colorado * Operating philosophy “had work, saving money, devotion to the quality of the product, caring about the environment, and giving people something to believe in.” * Requires constant refrigeration * Considered a high quality, standard beer, light and zesty taste, similar to standard beers from Miller and Budweiser. * Management seen by some to be antiunion beliefs, insensitive to minority issues, primarily unemployment and distribution * Sales depend on the efforts of two wholesalers planned for the...
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...30 Stephen E. Barndt aul Shipman, Chief Executive Officer of Redhook Ale Brewery, knew that he needed to reevaluate his strategy and its execution. Redhook's rapid growth had ended shortly after it invested in a major increase in production capacity. Operating at about 50% of production capacity, the company suffered a net loss in 1997 that continued into 1998. Redhook brewed only specialty beer, referred to as craft beer. Craft beer is a more flavorful, fuller bodied premium beer. follows traditional old world brewing methods. and uses high-quality materials. The company started as a microbrewery but grew continually and reached national status by the end of 1996. Shipman, one of Redhook's founders, had guided the company from a small player in one city to a leading position as a national competitor and aimed at dominating the craft beer segment of the domestic beer industry. The company's three small-batch breweries. two in the Pacific Northwest and one in the Northeast, had a combined design capacity of 575.000 barrels (each containing 31 gallons) per year of Redhook branded beer to tap a growing market for craft beer. However, growth in the craft beer market attracted attention, and competition grew from other microbreweries, brewpubs, regional specialty brewers, and from large mass-market brewers. With increased competition, 1996 saw the beginning of a downturn with a reduction in sal•• ~and profitability. P I Ccmpany History Redhook was started in 1981 by Paul...
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...Hudepohl Brewing Company Bob Pohl, age 32, was appointed general manager of the Hudepohl Brewing Company following the unexpected death of the company’s president in March 1980. Since 1975, Pohl had managed Hudepohl’s marketing response to rapidly changing conditions in the brewing industry. The death of the president, a relative, left Pohl as the only member of the founder’s family active in the day-to-day activities of the business. Pohl was optimistic about the company’s future despite Hudepohl’s recent disappointing performance. Since 1978 the brewery had been operating at less than 40% of its one-million-barrel1 capacity, and in 1978 the company had experienced the largest operating loss in its history—$538,000. After adjusting for gains on Hudepohl’s securities portfolio and a tax loss carryback, net income for that fiscal year was $95,161, down from $268,611 in 1977. After only three months as general manager, however, Pohl was predicting improved earnings in the near future. A 7% gain in sales during the first four months of 1980 seemed to confirm his expectations. Pohl felt that by 1983 Hudepohl would achieve a 10% growth in sales. Background on the Company Based in Cincinnati, Ohio, Hudepohl was the twentieth largest brewery in the United States. (Financial information is presented in Exhibits 1, 2, and 3.) Ownership and Organization Hudepohl’s board of directors consisted of seven members, all descendants of founder Louis Hudepohl. Chairman John Hesselbrock...
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...Golden, Colorado, the heart of the Rockies, Coors Light is the eighth leading beer brand in the world. As Molson Coors’ largest brand, the new parent company after the 2005 merger, Coors Light has established itself as the biggest selling brand in both the US and Canada. The merger, however, left the company heavily indebted and with limited capital suffered a loss of partnering and sponsorship for major sporting events. Coors Light has worked extremely hard to maintain the positioning as ‘The Worlds Most Refreshing Beer” withstanding the susceptibility the brand faces with only a single brewing site and third party distributors. This promotion plan includes the following objectives for the upcoming year: * To attract non-users and create brand awareness among 90% of females aged 21-30 seeking a refreshing tasting light beer, * To retain the 18-24 year old male target currently held by Coors Light. * To engage the mobile community through the use of Mobile Insider, connecting the brand to consumers. The objectives should be met through various promotional activities tied closely to the company’s long-standing brand image, and mobile promotions to increase accuracy in reaching target markets. Over the next 12 months it is recommended that Coors Light continue to use the Maxim Golf Experience to maintain the current target market. The brand will increase awareness among the female target by promoting the Coors Château getaway at bars across Canada, awarding...
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...drinker’s Proof Central East Region Market Size overall Market Size MM Competes in MM share (Barrels) Profit $ 2004 38,678,720 4,718,618 2005 37,191,077 4,648,885 2006E 35,703,434 4,462,929 are getting older and decreasing their frequency of purchases • As Mountain Man’s beer drinker’s are aging the children of a Mountain Man drinker are not choosing Mountain Man beer as their primary choice 530,400 $4,887,636 520,000 $4,791,800 509,600 $4,695,964 2) Increased presence of large multi-national brands in Mountain Man’s distribution area (Case Fact) • Distributors supporting beer brands on basis of turnover and margins; dropping brands that do not contribute to bottom line • Large brands maintain economies of scale in brewing, transportation and marketing; Increased pressure 3) Distributors not willing to help build Mountain Man brand awareness • Mountain Man is not a popular customer to distributors because of small market share presents • Small shipments of under 600,000 barrels annually. Mountain Man provides a high quality beer that hard working men enjoy Loyal – Hard Working - Deserving A Mountain Man beer drinker • Blue Collar • Middle to low income men over age 45 • Purchase beer at off premise location (liquor stores) • Working man (trades) (large population of workers) • Since 1925 Oscar has had the same customers, rugged, middle age men from the coal miners union. •Brand loyalty rate of 53% Legacy – American – Gold Standard Mountain...
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...Five Force Analysis: Supplier Power The beer market’s prime suppliers are farmers. Most breweries buy their supplies on the relevant countries’ futures exchange. Hence the branch has an opportunity to diversify its risk by trading futures contracts as well as hedging other risks. Various farmers supply the hops, barley, corn and rice used to produce beer. In 2008, there were 2,053 companies that purchased these ingredients. The overall beer industry sold nearly 206 million barrels of beer in 2009. For major brewers, the volume of ingredients purchased, the large number of farmers available to purchase the ingredients from, low switching costs on the part of the brewer, and inability of the farmers to forward integrate, supplier power in considered low in regard to the major brewers. Craft brewers who purchase fewer ingredients and sometimes more specialized ingredients may cause supplier power for this segment of the industry to be somewhat higher; yet, overall, suppliers have put limited pressure on price and supplier power is LOW. There are only a few large suppliers of aluminium cans, plastic and glass bottles, which increase the supplier’s bargaining power. However, taken into consideration largest brewery companies existing we can assume that the suppliers of those goods have a incentive in taking care those as a customer and will therefore provide them with the best possible price, in order to keep them as a customer. Competitive pressure from supplier bargaining power...
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...|BA 630 | |Industry Analysis | |The Beer Industry | |Spring 2010 | [pic] Beer Industry The term beer means “…any beverage brewed from a starch (or farinaceous) grain. Because the grain is made into a malt, another term for beer is malt liquor”. (The Beer Industry) According to the North American Industry Classification System, the beer industry is found in section 312: Beverage and Tobacco Product Manufacturing. NAICS states that “Industries in the Beverage and Tobacco Product Manufacturing subsector manufacture beverages and tobacco products. The industry group, Beverage Manufacturing, includes three types of establishments: (1) those that manufacture nonalcoholic beverages; (2) those that manufacture alcoholic beverages through the fermentation process; and (3) those that produce distilled alcoholic beverages…” Although beer is within the same section as wine and distilled spirits, they do not consider them the same. Within section 312 they have five separate sections: Beer can be found under section 312120 Breweries. Within this section the term...
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...For the exclusive use of O. AL-REFAI Harvard Business School 9-388-014 Rev. June 23, 1992 Adolph Coors in the Brewing Industry "Rarely in Adolph Coors Company's 113-year history has there been a year with as many success stories as 1985." Coors's annual report for 1985 went on to cite records set by the company's Brewing Division. In a year when domestic beer consumption was flat, Coors's beer volume had jumped by 13% to a new high of 14.7 million barrels. And its revenues from beer had topped $1 billion for the first time in the company's history. The Brewing Division accounted for 84% of Coors's revenues in 1985, and over 100% of its operating income. Although Coors had diversified into several businesses, including porcelain, food products, biotechnology, oil and gas, and health systems, Chairman Bill Coors acknowledged that for the foreseeable future, the company's fortunes were tied to brewing. The strategy of the Brewing Division had changed drastically over the 1975-1985 period. The changes continued: in a decision that the company billed as "the most significant event of 1985 and perhaps our history," Coors announced plans to build its second brewery in Virginia's Shenandoah Valley. The first section of this case describes competition in the U.S. brewing industry and its structural consequences. The next two sections describe Coors's position within the industry, and the plans that it had announced for its second brewery. Competition in the U.S. Brewing Industry ...
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...COORS MOLSON MERGER FEBRUARY 28, 2010 Table of Contents EXECUTIVE SUMMARY ii SCOPE 1 INDUSTRY 1 Top 5 Brewing Companies 1 The Beer Brewing Process 1 The Brewer to Retailer Process 3 Beer Importers 3 Beer Wholesalers 3 Beer Retailers 3 COORS 4 Marketing 4 Information Technology 4 Financial 5 MOLSON INC. 5 Marketing 5 Information Technology 5 Financial 6 MOLSON COORS MERGER 6 Four Objectives of Molson Coors 6 Goals from Molson and Coors 7 Coors Goals 7 Molson’s Goals 7 Merger: Good or Bad? 7 EXECUTIVE SUMMARY This document analyzes two world renowned brewing companies, Coors and Molson, in their achievements and efforts as individual companies in order to gain an understanding of the merger between Coors and Molson. The beer brewing industry is briefly reviewed in terms of the top five brewing companies in the world along with the information and beer brewing process flows of the industry. Marketing, information technology, and financials are elaborated upon for Coors and Molson. These three key aspects of each company are compared and contrasted in order to come to a positive decision about the merger. Finally, the merger is concluded to be a great decision for the two companies. SCOPE The merger between Coors and Molson are highlighted in this document. In order to come to a decision about the merger, the companies’ top competitors are mentioned. Information flows, as well as beer processing flows, are discussed. The two companies...
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...MillerCoors vs. Anheuser-Busch Salman Boer Carly Gorka Stephanie Kalin Kenny Koelling Felipe Naranjo Nizam Qutubuddin Executive Summary The beer industry in the United States is an extremely competitive one. For years, the industry has been solely dominated by one contender, Anheuser Busch. However, large brewers have always been looking for opportunities to extend their reach in the industry and gain more market share. Miller Brewing Company and Coors Brewing Company have been historical staples of the American beer industry since the nineteenth century. These companies merged with international giants South African Breweries and Molson, respectively, in efforts to better compete in the United States brewing industry. However, they still could not manage to take a share of the Anheuser Busch Empire. SABMiller and Molson Coors saw an opportunity in forming a joint venture that would be able to successfully compete with Anheuser Busch in the beer industry, and in 2008, created a third company called MillerCoors. The creation of MillerCoors was a success. Since the creation of the company, in June 2008, MillerCoors has been very profitable and has enjoyed steady growth in their market share. They have done this by integrating innovation as a major goal in their products, providing them with a certain level of differentiation, while reducing costs through the exploitation of synergies that exist in their different processes. MillerCoors was one of the very...
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...Case Analysis: Corona Beer (Modelo) By LaTeia D. Shed Professor Carroll August 5, 2011 LaTeia D. Shed Strategic Management Professor Carroll 8/5/2011 Case Analysis: Corona Beer (Modelo) 1.Identify and discuss the trends in the global beer markets. In the 1930’s, prohibition policies were established that affected the sale of beer as well as alcohol. In 1991, Corona saw a slowdown in growth caused by doubling of federal excise tax on beer. Corona’s distributors responded to the downward trend by changing its pricing strategy so that they would absorb the tax rather than pass it on to consumers. Corona was able to expand internationally when the North American Free Trade Agreement was signed. The establishment of the North American Free Trade Agreement eliminated the barriers to trade and reduced tariffs and resulted in an upward trend in beer consumption. From 2007 to 2009, the beer industry saw a decline in the global sale of beer due to the slowdown in the economy. Beer consumption in developed markets continues to suffer from high unemployment, high fuel prices and constrained consumer spending. In the USA, where unemployment is particularly severe among key beer drinkers, beer volumes have fallen slightly although accompanied by consumer uptrading between industry price segments. Beer volumes continue to decrease in Western Europe as consumers switch to other beverages and reduce on-premise consumption (SABMiller). In 2010, the beer industry...
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