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 in the United States recovered. On the other hand, it suffered in Eastern Europe due to unemployment and decline in consumer confidence. Africa, Asia, and China have all seen an increase in beer consumption. The trend towards premium beer consumption has slowed somewhat in the recent economic downturn.
In the 1990’s, there was a trend of national leaders beginning to expand abroad.