Industry Analysis Of The Beer Companies Commerce Essay

Industry Analysis Of The Beer Companies Commerce EssayThe U.S. beer assiduity got its start in the 1840s and 1850s with the introduction of lager beer style beers, brought by German immigrants. Before that point, beers were heavily oriented toward ale, porter, and stout and were mostly brewed at home. At about the same time, several technological advances occurred that take to the development of the U.S. beer intentness as we know it today. Mechanical refrigeration greatly aided in the production as healthy as the storage of beer. pasteurisation was also adopted during this period, which opened the way for wide-scale bottling and off-premise consumption of beer. By 1850 there were about 430 breweries in the unify States, producing about 750,000 barrels of beer annually. Commercial brewers began to grow in size and derive, and by the late nineteenth century there were almost 1,300 breweries.The beer industry is widely known for been an oligopoly. However, in our approach, we wi ll explore the possibility of analyzing microbreweries in particular from a monopolistic competition commercialise structure perspective. The beer commercialise oligopoly is composed by three big players Anheuser-Busch which holds 48 % of the commercialise sh be, Miller create from raw stuff Co., with 18% and Coors create from raw materialing Co. with 11%. Please refer to the below graph and table for information regarding the market share held by the remaining companies. (Market shares are shown establish on shipments of 205.6 one thousand million cases in 2005 and 210 in 2006)Anheuser-Busch Company is a dominate competitor. It is the largest brewing lodge in the United States, operating 12 breweries in the United States and 20 in other countries. Anheuser-Busch InBev is the largest global brewer with nearly 25% global market share and one of the worlds top five consumer products. The brewing industry as a whole is made up of several dominant multinational companies and thou sands of smaller producers, which range from regional breweries to microbreweries. The market is heavily saturated with competition.The beer industry is divided into standard lager, premium lager, specialty beer, ales, stouts, and bitters, and low/no alcoholic beverageic beverage. These three varieties are divided in smaller categories based taste, what the beer is made from, calories, strength, etc. In the MillersCoors family they sell Miller Lite, Coors Light, Blue Moon Belgian White, Coors, Fosters Henry Weinghards, Icehouse, Keystone Premium, Leinenkugels Killians Irish Red. Miller Genuine Draft, Miller High Life, Milwaukees Best, Molson Canadian, Peroni Nastro Azzurro, Pilsner Urquell, Red Dog, and that just begins to starting signal the surface. Coors and Miller light are the top selling beers. They are pale lager beers called Pilsners. Through diversification of products, mergers and reciprocal ventures with competitors to strength portfolio diversity and invite market sha re MillerCoors Brewing Company has competed fiercely against its competition and will continue to grow through striving for excellence and innovation.Smaller Competitors ( non limited too)Asahi BreweriesDiageoHeinekenKirin Brewery CompanyCarlsberycapital of Massachusetts Beer CompanyLion NathanSan Miguel CorporationII. SocioEconomicThe alcohol industry has faced many policies, regulations, laws, and rules to govern the manufacture, promotion, distribution, sale, and use of alcohol. Some include but are non limited to.The Prohibition in the United States banning the sale, manufacture, and transportation of alcohol shut down the brewing industry for 13 year between 1920 and 1933.The alcohol excise taxes that impose volume taxes on distilled spirits, win, and beer that are in addition to State alcohol taxes.Keg tagging and Registration that would hold buyers accountable.Community-based approaches to reduce risks associated with retail alcohol environments such(prenominal) as Responsib le Beverage Service.Limiting alcohol sales licenses.Limiting Alcohol Sales at public events, being able to lie with populate off.Advertising limits and regulations, underage consumers rat not be marketed to.Numerous state laws regarding the sale of alcohol (such as Indiana cannot sell alcohol on Sundays) and legal limits for driving.III. Porters Five ForcesA. Threat of New Entrants (low/medium)The Threat to New Entrants in low to medium, low because it would be knockout to achieve the success of the larger companies such as Anheuser-Busch or MillerCoors and medium because it is possible to come out as a small microbrewery although if success surround the microbrewery more than likely one of the big competitors would enter a joint venture or merge with the company. Although as illustrated in the graph below the beer industry is maturement. Many factors could cause this including the current economic recession. During tall(prenominal) economic times the sales of alcohol increas es. Due to the senior spunky rules and regulation apposed on the beer industry and the high market presence of top competitors it would be tricky for new entrants to hurt MillerCoors.Looking at the situation in a different way Coors to be successful and competitive had to merge with Molson Inc. and begin joint venture with multiple other companies the largest being Miller Inc. To be successful in this market it takes a great deal of capital for raw materials, production, advertising, and distribution. For a start-up company alone it would be difficult to raise the capital needed.B. SuppliersThe Threat of Suppliers is Medium/High. Raw materials account for a large percentage of the total be and if supplier increase prices it cuts into the profit or the company has to price its product higher and because the beer industry is so competitive that could prove to be problematic. Although it is medium to high because MillerCoors is such a large company that it gives them a backbone to be able to negotiate. The supplier though overall could have a big seismic disturbance on the final product.C. BuyersThe threat of buyers is high because people do not always have brand loyalty when it comes to beer. There is a large number of brewers and companies and without brand loyalty the buyer way buy whats cheapest, or on sales, etc. Buyers taste and preferences control the market. The beer industry has even began to make beers with only 55 calories for the beer drinkers trying to watch their weight. The amount of money put into research and development and advertising shows the power of the consumers and the need for market share.D. Substitute ProductsThe threat of substitutes is medium because although in the alcohol industry there is a lot of choices many beer drinkers like the low alcohol social drink. Many people drink beer at ball games, bars, football games, nascar events, and so on and it is more a culture. There will always be other options to what people would li ke such as water, tea, change beverages, etc. but beer is beer and not easily replaced in the culture.E. RivalryThe threat of Rivalry is high because the market is heavily saturated with completion. Many companies have corporate and began joint ventures and the market has consolidated thus creating powerhouses and it would be difficult for a company to penetrate the market while the powerhouses have such untouchable market shares not only in the United States but globally also.IV. ConclusionAs for the industry analysis I remember that the beer industry is a growing market with few major players and many microbreweries. Anheuser-Busch has a strong hold on the market share although there are areas that Coors can change upon to gain market share such as brand image and lack of marketing. The market is heavy saturated with competitors although many are small compared to Anheuser-Busch, Miller, and Coors. It would be difficult to penetrate the larger market because of the strong hol d they have on the market share especially Anheuser-Busch. Anheuser-Busch has strong brand recognition/awareness and strong marketing campaigns this is the key to their success.Part II Firm AnalysisI. Current SituationIt is drank at ball games, bars, when people are celebrating, when people are depressed, and sometimes just when people have had a dour day at work. Beer is the oldest and most widely consumed alcoholic beverage. It ranks third in most popular drinks go behind only water and tea. In 2006 more than 35 billion gallons of beer was sold with producing total global revenue of $294.5 billion. The Coors Brewing Company is the worlds fifth-largest brewing company in the world and Molson Coors Brewing Company is third largest brewing company in the U.S. Its popularity is linked to having the largest single brewery facility in the world, marketing research and sympathy of it consumers, financial structure and most importantly through strong branding. Molson Coors Brewing Compa ny strive to continually challenge and consistently reinvest in its people as passionate stewards of the brand.Molson Coors Brewing Company grew from the dreams of Adolph Coors and John Molson. Both individuals though different in many aspects shared the same common passion for brewing. Their journeys started and ended in different times and locations but together they work toward what is now known as Molson Coors Brewing Company. Separated by many years and numerous miles their dreams in 2005 overlapped with the Merger of Molson Inc. and friendly, Colorados Adolph Coors Company. Than to become a better competitor of Anheuser-Busch in 2007 SabMiller and Molson Coors Brewing Company entered into a joint venture to create MillerCoors.The Coors hi level begins in 1873 when the Golden Brewery opens, advertising bottled beer, ale, porter, cider, imported and domestic wines and seltzer water. In 1890 17,600 barrels of beer were outputted. With a growing company in 1920 the prohibition ak a The Noble Experiment took place reservation the sale, manufacture, and transportation of alcohol for consumption illegal this ended in 1933 and the Golden Brewery resumed operations. In 1953 Coors began to advertise on tele mass and in 1955 Coors produced more than 1 million barrels. In 1970 the annual sales exceeded 7 million barrels. 1975 Coors becomes a publically traded company. In 1990 annual production exceeds 19 million barrels. In 1991 Coors became available in can and bottles in Indiana and was than available in all 50 states. In 2005 Coors Brewing Company and Molson Inc. merged together to take a star role in the consolidating global brewing industry. In 2008 Molson Coors entered in to a joint venture with SABmiller to create MillerCoors in the United States.B. Strategic PostureThe thrill is not clearly stated on their website. All I could find was their community investments mission which is Our community investment mission is to promote the health and intimately be ing of individuals and communities where we do business. Our investments treat all people and resources with integrity and respect. I think on their website they have done a good job at showing people how they have become involved in protecting the environment and that they view being socially and environmentally responsible important. I believe that Coors need to have a mission, vision, and values statement to show all their employees, managers, suppliers, distributors, and even customers what they hope to accomplish and what they stand for. If a company has a electric charge to move toward they can begin taking steps forward.After more research on another site I found a vision for the company but on the companys own site I could not find it. The other site said their vision was, Molson Coors vision is to be a top-performing brewer winning through inspired employees and great brands. Were driving growth by becoming an innovative, brand-led company, delivering and re-investing prod uctivity for growth as we build a winning, value-based culture.I believe for them to get their desired results that they will have to better market themselves. This includes restructuring their website and getting their mission out. Anheuser-Busch does a great job at presenting a story that people can follow and laugh with.II. External Environment (Opportunities and Threats)Opportunities included their merger with Molson and their joint ventures to capture more of the market share. They also have a lot of potential for growth because the beer industry itself is growing. Their make believe is known and now they just have to improve on what their name signifies.Threats included substitutes products as well as other brewing companies. The high market share of Anheuser-Busch.III. Internal Environment (Strengths and Weaknesses)Strengths included innovation, and a diverse portfolio of brands and products. The company also has a long history, working capital, and experience through diffic ult times.Weaknesses include bad publicity that has occurred. No clear mission, vision, and values for the company, suppliers, distributors, and customer can read. Another weakness is the high threat of substitutes in the market.The management of Coors realized that they needed to band with other competitors to ensure that they could be a presence in the marketing. They have taken actions to improve marketing and are still working toward making the company better. Change is not a short process and it takes a lot of time for people to accept change.RecommendationsImprove on brand awareness through marketing and advertising. Coors necessitate to become a more friendly company that people can known and trust like a Disney or Pepsi. When people think beer most people automatically think Budweiser and Coors needs to work to have their name out more, sponsor events, have commercials, etc.Part III Firm to Firm (Coors vs. Class Strategic Company) AnalysisAnheuser-Busch and Coors are much l ike Pepsi and Coke. They are both highly competitive companies that continually try to innovate and create new more attractive products for their consumers. All four companies attempt to satisfy consumer needs and wants. In this situation Anheuser-Busch is the Pepsi Company because they both hold overwhelming control of the market share. Coors is like Coke as Coke only holds 27% of the market share in the United States and Coors holds somewhere in the high teens. Unlike Coors though Coke has a strong marketing strategy but has not been able to compete with Pepsi on a global level. Their Porters analysis are also very similar.Work CitedBanham, Russ. Coors a Rocky Mountain Legend. Lyme, Conn. Greenwich Pub. Group, 1998. Print.Ogle, Maureen. Ambitious Brew the Story of American Beer. Orlando Harcourt, 2006. Print.Van, Munching Philip. Beer Blast the inside Story of the Brewing Industrys Bizarre Battles for Your Money. New York Times Business, 1997. Print.