ADOLPH COORS

Adolph Coors in the Brewing Industry



Adolph Coors in the Brewing Industry

Introduction

Throughout most of its history, the Coors Brewing Company (Coors) has been a regionalized brewer within the United States, specializing in high-quality beer through by virtue of its source water selection, stringent production standards, and cold filtered brewing approach. As the company expanded its distribution to new markets within the U.S. in attempt to gain market share, it made a strategic decision to maintain a majority of its brewing operations at its primary production facility in Golden, Colorado (Charles, 2005).

This decision was based upon the desire to preserve its core production strengths through close family control. However, as the company desires to expand its market presence beyond the U.S. boarders with a goal of becoming the 5th largest brewer by 2008, its historic approach to management and operations provides a detriment to achieving this objective. As seen by the on-going consolidation of top brewers within the beer industry, the competition is fierce as more brewers are competing within a global market with extended product lines and decreased profit margins.

Discussion and Analysis

While organic augmentation is the traditional mode of company expansion within Coors, the harsh reality is that the company must seek external-based initiatives (e.g., joint ventures, acquisitions) to gain market share within the low market growth industry. However, several opportunities exist as three core markets are witnessing increased volume consumption: Russia, China, and Latin America/South America. Several of the top breweries have already implemented joint venture and/or acquisition strategies within these regions.

Coors has not. As a result of Coors non-calculated acquisition of Carling Brewery in 2002, the company has become cash-limited as a result of incurring debt. Therefore, immediate acquisition within developing markets is not readily attainable. Because Coors cannot afford to defer market penetration, it must enter these markets immediately through a joint venture arrangement. In addition, the company must be willing to sacrifice its traditional, slow-moving family-based management style to effectively compete within the fast-moving beer market.

As part of the effort to grow the company in overseas markets and acquire new market share, Coors must seek outside perspectives and leverage new management experts that are experienced in oversees expansion and operations. While this appears to be a daunting task given the existing organizational structure's heavy reliance on Coors family control, the company must transcend from an environment that encourages a long and meticulous ...