The Case Study of Corona Beer

Table of Contents

Introduction1

Discussion1

Trends in global industry1

Modelo international expansion3

Next foreign market for Modelo4

Challenges from InBev4

Should Modelo diversify its business?5

Conclusion5

References7

The Case Study of Corona Beer

Introduction

Modelo is a Mexican company that was founded in 1925.soon after its discovery; it became the market leader of the beer industry. With the passage of time, Modelo grew and expanded itself by acquiring five breweries between 1935 and 1966.many other competitors merged together to be more competitive against Modelo but they failed. They wanted to improve their market share, but they could not surpass Modelo.

The group Modelo entered the US market, which was the largest beer consumer market in the world. The managers of Modelo decided to give corona the image of a premium beer in order to capture the market share in the US market. Initially they had to face a competitor Dutch Beer Heineken which was the most profitable beer industry in the United States. Sooner or later, Modelo managed to dominate the beer industry in United States and captured the largest part of the market share.

Modelo produces various products including corona extra, corona light, Modelo especial and Negara beers. In the year 2005, the group Modelo brands were in the list of the top eight brands in the United States. The company now also owns a sports team which is a non core business.

Discussion

Trends in global industry

Humans consume beer almost in all ceremonies and parties. It's been a while that beer is being drunk by humans all over the world. During the 14 century, beer was being brewed in homes and in small clubs. In the initial years, the beer production was decentralized and every village had its own beer industry. They had their own methods and recipes to produce beer. These methods were influenced by the taste and interest of the locals of the village.

Until the 19th century, beer was being brewed by small companies in Europe.

With the development of new transportation, beer became available to almost all the regions of the country. These opportunities and trends forced small breweries to convert it into larger players of the beer industry. In the early years of the 19th century, among the growth strategies adopted by the beer companies, mergers and acquisition are prevelant.Due to these trends; small companies started to dominate the beer industry and controlled the production and sales of beer worldwide. (Thompson, Strickland, & Gamble, 2009).

Since the last decade, the beer industry has shown remarkable growth and this trend has continued over the years. During the year 2008, the beer sales by the top 10 companies captured 65% of the total global sales which was around 40% in the beginning of the century. The trend of mergers, acquisitions and international expansion provided an opportunity to beer companies to reach to their customers globally.

Saturation in the beer industry in regions such as United States and Europe has provided entry opportunities for the foreign companies. These companies have established and expanded by not only exporting, but also through mergers ...