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Foreign Market Entry and Diversification

In: Business and Management

Submitted By dexterp11
Words 1155
Pages 5
Foreign market Entry and Diversification
Dr. Sarita Wesley
BUS 599- Strategic Management
November 12, 2011

Global beer market trends Over the past decade, the global beer market has undergone a lot of change. Developments and improvements in the quality and appeal of beer brands have resulted in a strong organic growth in the beer category. Brewers have responded to the declining beer consumption trends in developed markets. The decline of beer consumption in developed markets is due to high unemployment rates, high fuel prices, and reduced consumer spending. Industry consolidation has continued and the four largest brewers-Anheuser-Busch InBev, SABMiller, Heineken, and Carlsberg- produce almost half of all industry volume and generate up to 70 percent of industry profits. The beer consumption in countries like Africa, Asia, and South American continue to rise. This is primarily driven by the growth in population and incomes. Improvements in beer quality and appearance have also lead to the rise of beer consumption. Consumers have begun to shift from informal and unregulated forms of alcohol to attractively branded and safer commercial beers.
Modelo’s international expansion Grupo Modelo’s international expansion began with the United States. As Modelo continued to produce beer domestically, they entered into distribution contracts with companies that possessed local knowledge of the beer market and gave them the freedom to market the product appropriately, yet maintain an active involvement in the decision-making. Barton Beers Ltd. was Modelo’s the first strategic partnership with a local distributor. Modelo made the decision based on the fact that Barton Beers was the largest beer importer in the 25 western states and was experienced in the marketing and sales of imported, premium beers. In an effort to supply the eastern states, Modelo partnered with a…...

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