...1. What are the dominant business and economic characteristics of the global beer industry? * Market Size and Growth Rate * The size of the global beer industry approximated $385.5 in 2005 and $376.7 in 2004. This is a growth rate of 2.3% during the year 2005. * This is a mature industry with slowing growth, but it will continue to grow at a small rate. * Number of Rivals * During its early development and rapid growth stage, there were many rivals and the industry was very fragmented. * The lack of a transportation network made exportation impossible for centuries and brewing was a local, then a national domain. * Mergers and acquisitions are beginning to increase in frequency and the industry is experiencing a period of consolidation. * A determining factor of beer is that it has different national tastes based on different countries. Specialty beer-makers can find niche markets to sustain themselves without economies of scale. * Scope of Competitive Rivalry * The largest producers compete on global levels with strategic alliances set up to distribute the beer in other countries. * Most companies started out on a local or regional level, and then changed the company’s focus to incorporate a multinational or global perspective. * While many companies have exported products, most companies still use the production capabilities in their native country. * Having a presence in foreign country...
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...tipos costaban $175 y $225, respectivamente. Dada la necesidad urgente, el contrato especificaba que si el número combinado de máscaras antigas entregado cada semana era mayor que 5 000, el gobierno pagaría al fabricante un bono de $50 000 más $25 por cada unidad por encima de las 5 000. Para esto se desea una fórmula que exprese la relación matemática entre las ventas semanales en dólares al gobierno y el número de unidades surtidas de los dos tipos de máscaras antigas. [Ejemplo 10] La aplicación de las matemáticas yace en la capacidad de identificar una representación matemática relevante de un fenómeno del mundo real. Esta relación a menudo se conoce como modelo matemático. Un modelo es relevante si capta con éxito los atributos del fenómeno que son significativos para el constructor del modelo. Al igual que un modelo a escala de un avión muestra la apariencia física de un avión real, un...
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...Corona Beer: Challenges of International Expansion Corona Extra has been the world’s fourth best selling beer in terms of volume in 2005 due to its strategy in differentiation. Corona marketing campaign of “fun in the sun” and its light and citrus flavor helps products to expand its target customers far beyond its competitors. However due to merger and acquisition that occur in the industry, Corona needs to adjust itself in order to sustain its growth and improve its competitive position. Environmental Analysis PEST Analysis Political Factor: * Government regulation prohibits to import alcohol product in some country. * Tax policies on alcohol beverages may result in higher price of alcohol product in some countries. Economic Factor * Trading agreement such as NAFTA, can help firm to benefit from exports its products into the emerging market, however this might also open up the opportunities for new competitors to come into Mexico‘s beer market as well. * Instability of Mexico economic condition can affect the cost of goods sold of the products that export out of the foreign markets. Social Factor * Some countries or areas might prohibit to sell alcohol beverages. * Differentiation between global preferences. For example, beer might be popular in US and Germany, however in Italy and France, wine is more popular. Technological Factor * Technology can improve product quality and can reduce scrap or it can also improve distribution system with...
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...examines the trends in the global beer market. The paper will also examine the international expansions that were made through strategic partnerships with distributors in local markets. Foreign Market Entry and Diversification Assignment #3 Corona Beer Grupo Modelo’s corporate mission is, “To produce, distribute and sell quality beer, at a competitive price, optimizing resources and surpassing customer expectations, in order to contributeto the economic and social development of Mexico.” Corona Extra brand has become the fifth best selling beer worldwide and the number one imported beer in the United States. Corona is commonly served with a wedge of citrus fruit in the United States, Canada, Australia, and the United Kingdom. Today, Modelo products are available in more than one hundred and forty countries (http://findarticles.com/p/articles/mi_m0BEK/is_7_7/ai_55012912/). Identify and discuss the trends in the global beer markets. The world of beer is changing and evolving. The most interesting tend is happening in Germany. When most people think of beer they think of Germany. Beer production in Germany dropped 1.7% from 2009 to 2010. Beer consumption dropped 3% in Germany because many German consumers would drink coffee or tea instead of beer (Canestorp, 2011). Americans are drinking more beer and the consumption per capita remained almost six times higher in the United States than it was in China. American craft beer consumption was up by seven percent. This...
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...“Corona Beer (Modelo)” Foreign Market Entry and Diversification Richard J. Bradley Professor Brian Grizzell Strategic Management – BUS599 Strayer University February 9, 2012 Abstract This analysis outlines Corona Beer (Modelo) and its current strategy and position amongst the competition in the beer industry. The key question addressed is the ability of Corona Beer (Modelo) maintaining status as an industry leader among beer producers and distributers. The trends within the global beer market are also examined as it impacts Corona Beer (Modelo). A competitor analysis will be discussed and how Corona Beer (Modelo) will need to perform and react in the ever changing international markets. There will also be strategic challenges identified and how the company will handle them while facing various options and recommendations to address such challenges. In addition this analysis will outline and dissect trends affecting global beer markets. My analysis will examine how the international expansion of Modelo was initiated by strategic partnerships with various seasoned beer distributors. The analysis will also focus on Modelo and an effective strategy to enter foreign markets for success. The discussion will cover the varying challenges Modelo may encounter from the competition. By 2010, beer sales dropped some 1.5% in the United States America and slightly higher in western Europe with 2.3% (The Economist, 2011). The amount of beer consumed in blossoming...
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...CORONA BEER (MODELO) FOREIGN MARKET ENTRY AND DIVERSIFICATION Assignment #3 BUS 599 CORONA BEER (MODELO) Indentify and discuss the trends in global beer markets The consumption of beer began in the 14th century. Most breweries were local due to the tastes of certain geographical locations. In the 1990’s a tread began to form of companies acquiring smaller breweries to have a larger span of sales. This was due to the high costs of operations but having an extended stream or constant cash available for maintenance the structure of this industry supported concentration in this area. 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 sever among key beer drinkers, beer volumes have fallen slightly although accompanied by consumer uptrading between industry price segments. Beer growth trends by volume% Forecast five-year compound annual growth rate (CAGR) by region – 2011 to 2015 Discuss how Modelo’s international expansion was made possible through strategic partnerships with experienced distributors in local markets. | | | | | | | | | | | | | | | | | | | | | | | Grupo Modelo first introduced Corona in Chicago through Barton Beers Ltd. Barton was one of the largest beer importers in the 25 western states and was experienced in the marketing and sales of imported beers. The second distributor that was chosen...
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...INTERNATIONALIZATION STRATEGIES FOLLOWED BY THREE MEXICAN PIONEER COMPANIES GRUPO MODELO, GRUPO BIMBO and CEMEX ISSUES AND CHALLENGES José G. Vargas-Hernández, M.B.A;Ph.D. Profesor Investigador miembro del Sistema Nacional de Investigadores Departamento de Mercadotecnia y Negocios Internacionales Centro Universitario de Ciencias Económico Administrativas Universidad de Guadalajara. Periférico Norte 799 Edificio G-306 Zapopan, Jalisco C.P. 45100; México Tel y fax: +52(33) 3770 3343 Ext 5097 josevargas@cucea.udg.mx,jgvh0811@yahoo.com,jvargas2006@gmail.com Mohammad Reza Noruzi, EMBA, PhD Candidate Policy Making in Public Sector Islamic Azad University, Bonab Branch, Iran Young Researchers Club Member, IAU Bonab, Iran Tell: +98- 412-7238893-5 mr.noruzi@modares.ac.ir mr_norouzi@pnu.ac.ir mr.noruzi.pnu@gmail.com Abstract The opening of the Mexican economy and globalization bring new opportunities for Mexican companies to expand their markets and get their products around the world. The internationalization process requires a sound strategy for the consolidation in foreign markets. The aim of this study is to analyze the different internationalization strategies followed by three Mexican companies with a global presence: Grupo Modelo, Grupo Bimbo and Cemex. We conclude that the differences in their strategies arise from the characteristics of each of these companies. Keywords: Mexican companies, strategy, expansion, internationalization. 1 INTRODUCTION The landscape of this...
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...Case Analysis for Corona Beer (Modelo) BUS599 Identify and discuss the trends in the global beer markets There is a common item found at sporting events, entertainment venues, restaurants, bars, and mainly in the refrigerators of Americans. This item is beer. Of the 67% of Americans who consume alcohol 42% prefer beer (Frank Newport, 2010). Beer consumption is continuously increasing not only in the United States but also globally. There are several trends within the global beer market which accounts for the potentials seen throughout the industry. One of the main trends of the global beer industry is the growth rate. The growth rate globally over the past five years is reported at 3.5%. “The largest contributors to this growth have been China (now the world's largest beer market), Africa and Eastern Europe” (SABMiller Investors, 2011). Another trend seen in the industry is consolidation. At the beginning of the twenty first century there were ten major brewers accounting for one third of the beer sales. Today there are four top brewers which include “Anheuser-Busch InBev, SABMiller, Heineken and Carlsberg – accounting for almost 50% of beer sales volumes and up to 75% of the global profit pool” (SABMiller Investors, 2011). This is due to the increase in consolidation. Another trend in the beer industry is premiumisation. This term refers to the sales of premium beer brands. “As economies improve, the trend towards premium will resume as consumers become...
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...Grupo Modelo (GM) is a Mexican brewer company with a 57% share in Mexico. The Mexican beer market is the world's eighth largest beer market. The company is also an important player in the United States premium beer segment with a market share of about 6%. Three of its brands ? Corona Extra, Modelo Special and Corona Light ? are among the top ten highest selling imported beers in the US. Grupo Modelo has a distribution system covering more than 122 countries, with its flagship brand, Corona, being the fourth largest selling brand in the world. The major beer brands of the company are: Corona Extra, Corona Light, Modelo Especial, Pacifico, Victoria and Negra Modelo. Grupo Modelo operations comprise of mainly two areas: brewing process and sales. The brewing operations include five breweries located in Mexico with a total processing capacity of more than 50 million hectoliters per year. The group has several subsidiary / affiliate companies that provide support services to the core business of producing beer. GM has followed a strategy of vertical integration since the 60's which has resulted in this network of companies engaging in the brewing and ancillary operations. GM has an established distribution network in Mexican market, which is a key factor in maintaining market shares in the domestic beer market. The export sales of beer are coordinated through a set of representative offices around the world. It may also be mentioned that the distribution network of the company...
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...Merging: Creating economies of scale but allowing for an anti-competitive market Anheuser-Busch InBev Buys Rest of Grupo Modelo, Maker of Corona Beer In an effort to take full control of the maker of Corona Extra beer, Anheuser-Busch InBev agreed to buy the remaining share of Grupo Modelo, a large brewery in Mexico, which it had not already owned. If approved, the deal will finally unite the two companies who have shared a bond since 1993 and it will solidify Anheuser-Busch InBev’s position as the world’s largest brewer in the beer industry. Under the deal, Modelo will absorb several subsidiaries and will continue to be based in Mexico City and have a local board in order to preserve the Mexican brewer’s identity. With operations in 24 countries, the merger is expected to generate about $600 million in annual cost savings and give Anheuser-Busch InBev access to Mexico’s fast-expanding domestic market. As the world’s leading brewing company, Anheuser-Busch InBev produces, markets, distributes, and sells approximately 200 beer brands. The merge with Modelo will encourage growth by continuing to create economies of scale [Figure 1] in production. With Modelo based in Mexico City, InBev will gain new production facilities in a new geographic area after the merge. This will drastically cut costs, seeing that beer is an expensive product to ship relative to its value which causes transportation costs to account for the majority of the overall product cost. The merge will...
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...INTERNATIONAL EXPANSION Corona Beer, produced in Mexico by Grupo Modelo since 1922, entered the United States beer market in 1979, and by 2007, was the number one imported beer in the United States (with 1.9% market share of the global beer industry) having recently taken that position from Heineken, a rival (with 1.6% market share of the global beer industry). Corona used a broad differentiation strategy with a “fun in the sun” marketing image. It also achieved strategic success by using a distinctive glass bottle and providing a light-tasting beer that attracted a broader market. Problem identification: The global beer industry was experiencing increasing competition due to the new and potential mergers and acquisitions of its competitors. One example was the partnership between Heineken and FEMSA, which was formed in an attempt to dethrone Corona as best-selling imported beer in the United States. In addition, with the introduction of NAFTA, Canadian and U.S. competitors were slowly beginning to penetrate the Mexican market, while FEMSA continued to experience steady growth and increase its local market share. Analysis: Financial analysis indicated that costs were increasing for Grupo Modelo, while competitive analysis indicated that Anheuser-Busch spent $192M on U.S. marketing in 1985 compared to a mere $5.1M spent by Grupo Modelo. This emphasizes the financial weakness of Corona and Grupo Modelo, yet underscores what the brand was able to achieve with the relatively...
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...FACULTAD ECONOMÍA Y NEGOCIOS INGENIERÍA COMERCIAL PROGRAMA DE ESTUDIO A. Antecedentes Generales. - Nombre de la asignatura Código Carácter de la asignatura (obligatoria/ electiva) Pre – requisitos Co – requisitos Créditos Ubicación dentro del plan de estudio (semestre o año) : ECONOMIA III : ENE 314 : Obligatoria : Economía II – Matemáticas III : No tiene : 10 : Quinto Semestre Número de clases por semanas (incluyendo las prácticas) : 3 Horas académicas de clases por período académico Horas académicas de prácticas por período académico : 68 : 34 B. Intenciones del curso Este curso espera que el alumno comprenda los conceptos y elementos fundamentales que deben considerarse al analizar el funcionamiento global del sistema económico. Se persigue que además el estudiante aplique sus conocimientos en situaciones reales y/o ficticias, analizando las variables macroeconómicas que afectan el funcionamiento de las empresas en distintos sectores de la economía nacional y mundial. Finalmente, se espera que el estudiante perciba la importancia de conocer y comprender los contenidos trabajados, y de cómo estos conocimientos contribuyen a la formación de un licenciado en administración. Esta asignatura se ubica en el segundo ciclo de estudios denominado Licenciatura y se relaciona directamente con la asignatura Economía IV. C. Objetivos Generales del Curso A nivel conceptual: Comprender el funcionamiento e interacción de las principales variables macroeconómicas en...
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...Page 1 GRUPO MODELO CASE ANALYSIS BY Page 2 Table of Contents: Financial Ratios Performance..............................................................................…………………..Pg.3 Primary Objectives and Summary............................................................................................Pg.4 Market Overview......................................................................................................................Pg.5 Key Success Factors..................................................................................................................Pgs.5-6 SWOT ANALYSIS........................................................................................................................Pg.7 Strengths...........................................................................................................Pg.7 Weaknesses.....................................................................................................Pg.7 Opportunities..................................................................................................Pg.7 Threats............................................................................................................ Pg.7 Recommendations................................................................................................................Pgs.8-9 Exhibit 1: Financial Ratios......................................................................................................Pg. 10 Exhibit...
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...world. This fact may slowly descend away as other international brands increase their marketing budgets and spend more to gain the upper hand. Heineken’s president Michael Foley stated the truth when he said, “Beer is all marketing. People don’t drink beer, they drink marketing.” By taking a look at the overall situation that Grupo Modelo is faced with in the years ahead, there are some alternative choices that must be presented to the company if it wants to continue to grow and outperform its major competitors like FEMSA. One idea is for the expansion of Modelo’s marketing campaign by allocating more money to advertising. The majority of Corona advertisements seen on television are the famous “Fun in the sun” beach theme skits. Although simple, comical, and very effective, these commercials are the only well-known advertisements for Modelo beers in the U.S. Negra Modelo and Pacifico Clara are also produced by Grupo Modelo that actually score higher in taste than Corona Extra. These two beers could become potential revenue streams for Modelo if they were more widely promoted like Corona has been for the past decade. Creating awareness of different Modelo beers is a key element needed to disseminate their product for maximum exposure to a target market. Ways in which the company may want to consider expanding its marketing efforts would be broadcasting on public radio stations, satellite/internet radio, and...
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...Americans are drinking more beer and the consumption per capita remained almost six times higher in the United States than it is in China. There are three brewers controlling 80% of the U.S. market, Anheuser Busch with 45%, Miller Brew with 23% and Adolph Coors with 10%. There were also 300 regional craft breweries that struggled to make a profit because of vertical integration and economies of scale which were drivers of operating margins [ (Thompson, Strickland, & Gamble, 2009, pp. C-250) ] Mexico is one of the largest beer markets in the world. They have a variety of brands with lots of different taste. Even with the mix of taste, Mexico is split between two producers and few microbreweries. These companies are FEMSA and Grupo Modelo. Grupo Modelo captured 62.8 % of the Mexican market in 2007 while FEMSA captured the remaining 37.2% [ (Thompson, Strickland, & Gamble, 2009, pp. C-251) ]. As a whole, the beer industry is expected to post a third consecutive year of declining sales in the U.S. for the first time in more than 50 years. . Shipments from beer manufacturers to wholesalers, a standard industry measure, are expected to fall by as much as 2 percent in 2011, according to Beer Marketer's Insights [ (York, 2011) ]. “In June [2004], a commercial agreement was signed with Heineken [by FEMSA] to commercialize [their] beer brands in the United States. Under the terms and conditions of this agreement, Heineken USA takes responsibility for the promotion, selling and...
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